Here are your typical options when expanding a business into Spain. This section takes a practical look at the main alternatives open to a foreign investor interested in registering a business in Spain or entering the Spanish market. The alternatives follow:

Registering a Spanish Business

Incorporating a business in Spain or the formation of a branch or permanent establishment are the two main options. Spanish law provides for a variety of vehicles that can be used by foreign companies or individuals for investing in Spain. Traditionally, the corporation (Sociedad Anonima) has been the form most commonly used, although the limited liability company (Sociedad Limitada) has gained popularity in recent years.

Joint Ventures

Association with other businesses already established in Spain. Foreign investors may find a joint venture with a Spanish company to be the most appropriate form of presence in Spain, since it allows the parties to share risks and combine resources and expertise.

A joint venture can be set up under Spanish law in a number of ways :

• An Economic Interest Grouping (Agrupacin de Interés Econmico, EIG) or a European EIG (EEIG).
• A Temporary Business Association (Unin Temporal de Empresas or UTE).
• A silent partnership (contrato de cuenta en participacin) with a Spanish company.
• Joint ventures through Spanish corporations or limited liability companies.

Various forms of distribution agreements are available without establishing a centre of operations. The alternatives include:

• Signing a distribution agreement
• Operating through an agent
• Operating through commission agents
• Franchising
• Exporting

Licensing

Licensing in Spain is the permission for someone else to use your intellectual property rights: a patent, trademark, trade secret, or copyright. Different types of license include:

• Non-Exclusive License - A non-exclusive license implies that your intellectual property rights can be awarded to more than one licensee.
• Exclusive License - A little more complex because, although the license may not be exclusive to one licensee, it may be exclusive to a geographic location, a certain product, or limited area of use. For instance, you may grant a licensee exclusive use of the rights in France, yet grant another licensee its use in Germany.
• Patent License - The allowance of another party to use your patented product, design or process.
• Trademark License - Trademark licensing means permission is awarded to a licensee to sell a product or service. However, the licensor retains more control in order to ensure that quality is maintained. Quality control is in place to uphold the image of the brand / product / service / licensor, and therefore sustain customer confidence and satisfaction.

Franchising In Spain

Franchising is the licensing out of a business name, product, technique, philosophy, trademark, etc, for a percentage of the income. Instead of setting up new outlets as part of your expansion, you license your existing business blueprint out to franchisees who then set up and manage it for you.

The benefits of franchising your business in Spain include: more freedom, as the franchisee takes on major responsibilities; minimal expense; lower cost and higher profits; potential for fast growth; brand building.

Disadvantages of franchising a business in Spain: although few, rely predominantly on your franchisees. They include: poor quality franchisees; franchisees not declaring all income; poor performance.

According to the latest figures from the Asociacin Espaola de Franquiciadores (AEF), in 2009 there are 895 franchise networks in Spain, 20 more than in 2008. 166 of them are foreign and 729 Spanish. Franchising in Spain currently provides employment for more than 230,000. Madrid has the highest number of companies, 291. Catalonia follows with 241, the Valencian Community with 95 and Andalusia with 86. The sectors with the biggest turnovers are food, hotel and catering, travel agencies and fashion.