SPAIN

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Spain is the fourth largest economy in the Eurozone. It has been one of Eurozone’s most impacted country by the Covid-19 epidemic, given its large reliance on the services sector, which has been more impacted by health restrictions. Real GDP fell by 10.8% in 2020.

Important structural weaknesses persist, and in particular the low of level of investment and productivity, which are among the lowest in Europe. This hinders the growth potential of the economy and limit the number of job creation in the long run. The slump in activity and the countercyclical policies put in place to deal with the coronavirus shock has caused a sharp increase in the public deficit. The latter rose to 11% in 2020 while the public sector debt-to-GDP ratio jumped to 120%. 

On joining the euro, the country experienced a very strong, albeit largely unbalanced, period of economic expansion. Fuelled by the booming construction sector and surging house prices, funded by external debt. The 2008 financial crisis precipitated the burst of the housing bubble which in turn led to an economic and banking crisis.

Spain emerged from the 2008 financial crisis after a long and painful process to reform the labour market and rebalance the economy towards export-oriented sectors. Its banking sector has been restructured and recapitalised. Gains in cost-competitiveness have allowed Spain to increase its market share both inside and outside the Eurozone. The country experienced solid growth in years preceding the Covid-19 pandemic, averaging 2.6% (2015-2019).

Summary

BNP Paribas has been present in Spain since 1979 when foreign banks were first allowed to operate there. Since then, the bank has become one of the largest foreign financial institutions in the country, with over 4,000 employees. BNP Paribas has four business centres across the country (Barcelona, Bilbao, A Coruna and Madrid), offering proximity to its corporate and institutional customers throughout Spain. BNP Paribas' cash management offering in Spain includes comprehensive local cash management capabilities including Pagarés, Recibos, Efectos and Confirming capabilities, together with local channels and formats and flexible lockbox solutions.

Currency

  • Euro (EUR).

Bank accounts

  • A company is generally considered resident in Spain if its place of effective management is located in Spanish territory or its head office is registered under Spanish law.

Factoring

  • There are specific regulations of the Bank of Spain to develop and provide factoring services. Articles 347 and 348 of the Spanish Mercantile Code, complemented by some others of the Civil Code, regulate the assignment of receivables. 
  • If notified, a letter of global or individual assignment (notified to the involved debtors) is required to involve debtors and oblige them to pay to the factoring company as assignee. 
  • Factoring agreements should be signed in front of a public notary.

BNP Paribas Cash Management Capabilities

Cash collections
Cheque collections
Direct debit collections
Domestic incoming transfers
Virtual IBAN
Virtual accounts
International incoming transfers
Card acquiring

Payments & collections

Electronic credit transfers are used by companies to make supplier and payroll payments. Direct debits are used for approximately 40% of retail payments in Spain. Card payments, and increasingly contactless card payments, are the preferred in-store payment methods, although mobile payments are also rising. In July 2021, a new anti-fraud law was approved which limits cash payments for services to EUR 1,000 from EUR 2,500. (The law also reduces the limit from EUR 15,000 to EUR 10,000 for individuals outside Spain).

Electronic banking services are available from all banks. There is no national electronic banking standard in Spain, so companies use banks' proprietary services. Multinational companies also use the SWIFT for Corporates messaging standards. Transaction and balance reporting, automated end-of-day sweeping, and some transaction initiation services are available on a domestic and cross-border basis.

Digitalisation of bank services and the launch of digital-only banks such as Revoult, Bnext and Openbank, has seen widespread adoption of online and mobile banking.

Short term investments

Interest payable on credit balances

  • Interest-bearing current accounts are permitted for residents and non-residents.

Demand deposits

  • Demand deposits are available for residents and non-residents.

Time deposits

  • Time deposits are available in EUR or foreign currency for residents and non-residents.

Certificates of deposit

  • Domestic banks issue certificates of deposit for a variety of terms and rates, although they are not commonly used.
  • The depósito financiero is more popular. If maturity is less than 15 days, the product is called a ‘financial account’. If maturity is above 15 days, it is called a ‘financial deposit’. The minimum investment amount is EUR 5,000.

Treasury (government) bills

  • The Spanish treasury (Tesoro Público) issues Treasury bills (letras del tesoro). Terms of three, six, nine, and 12 months are the most common. The minimum investment is EUR 1,000.
  • Government bonds with longer maturities are also issued.

Commercial paper

  • Domestic commercial paper (pagarés de empresa) is issued by companies and public authorities but is more commonly used as an investment type by financial institutions.
  • Euro commercial paper (ECP) is issued by larger companies with a published credit rating. ECP can be issued in a range of currencies.

Money market funds

  • Domestic money market funds are popular short-term investment instruments.
  • International money market funds are also available to Spanish investors.

Repurchase agreements

  • Repurchase agreements with maturities ranging from overnight to one week are commonly available in Spain. Longer terms of one, two and three months are available.

Banker's acceptances

  • Banker's acceptances are not used in Spain.

BNP Paribas Trade Finance Capabilities

Documentary credits
Documentary collections

International trade

  • As a member of the European Union (EU), Spain follows the EU customs code and applies all associated regulations and commercial policies.
  • Trade with countries in the European Economic Area and Switzerland is exempt from tariffs and other controls.