Spain: Selling

Customs Procedures

Import Procedures

As Spain is part of the EU countries, a common commercial policy is adopted to import/export most products. The Agencia Tributaria manages the Spanish customs service. It is responsible for the administration of customs procedures in Spain, the collection of taxes and VAT, work for the economic development of Spain, the control of illegal trade and are facilitators of real trade.

The official model for written declarations to customs is the Single Administrative Document (SAD). The SAD serves as the EU importer's declaration.  It encompasses both customs duties and VAT and is valid in all EU Member States.

As part of the "SAFE" standards advocated by the World Customs Organisation (WCO), the European Union has set up a new system of import controls, the "Import Control System" (ICS), which aims to secure the flow of goods at the time of their entry into the customs territory of the EU. This control system, part of the Community Programme eCustoms, has been in force since 1 January 2011. Since then, operators are required to pass an Entry Summary Declaration (ENS) to the customs of the country of entry, prior to the introduction of goods into the customs territory of the European Union. The EU recently introduced a new import control system called ICS2 to implement the EU customs pre-arrival security and safety programme.

Non-agricultural goods entering EU territory must adhere to customs formalities (ENS). This declaration must be carried out by the person bringing the goods to the territory. The Summary Declaration can be made electronically or on a form provided by the customs authorities. The deadline for lodging the ENS depends on the mode of transport carrying the goods.

Since July 1, 2009, all companies established outside of the EU are required to have an EORI number if they wish to lodge a customs declaration or an Entry/Exit Summary declaration. Once a company has received an EORI number, it can use it for exports to any of the 27 EU Member States.

Goods in transit only need a single EU transit document.

Inward processing is free of customs treatment. This procedure allows raw material (non-Union good) to enter temporarily without customs fees if it will be processed (or repaired) and re-export the finished products out of the EU territory. In this case, the importer gives a guarantee (from an insurance company or bank) equal to the amount of customs duties that would have been due on the imported raw material. This guarantee will be reimbursed when the final product is exported. This process also applies to goods planned to be re-exported. Only goods sold in the EU market are eligible to import duty and taxes.

For outward processing, duties and taxes apply only to the value added during the process. Only firms located in Spain or in the EU may take advantage of this measure.

The EU plans to introduce a new import control system called ICS2 that will start on 15 March 2021 to implement the EU customs pre-arrival security and safety programme.

For more information, please visit the website of the EU on customs policy.

Specific Import Procedures

The Union Custom Code - adopted on 9 October 2013 as Regulation (EU) No 952/2013 - Title V provides for the following customs simplifications:

• Simplified declaration (Article 166 UCC)
• Centralised clearance (Article 179 UCC)
• Entry in the declarant's records (Article 182 UCC). This type of customs declaration is not allowed for all customs procedures (e.g. exclusion of transit).
• Drawing-up of customs declarations for goods falling under different tariff subheadings ( Article 177 UCC)
• Self-assessment (Article 185 UCC)

Importing Samples

Business executives entering with commercial samples must carry a letter from their company certifying their status, an identification document of the samples and a certificate that the samples are not for sale. The ATA book can be used. As a signatory to the International Convention to Facilitate the Importation of Commercial Samples and Advertising Matter, Spain admit samples of negligible value duty free.

Customs Duties and Taxes on Imports

Customs threshold (from which tariffs are required)

EUR 150

Average Customs Duty (Excluding Agricultural Products)

Import duty and taxes are due for goods imported to Spain from outside of the European Union - whether by a private individual or a corporate entity. Spain is party to the European Union’s Common Customs Tariff, therefore preferential rates apply to imports from countries which the EU has signed agreements with. Duties range from 0-17%, with the general tariff averaging 4.2%. However, foodstuffs, textiles and clothing still experience some protection measures (quotas, higher tariffs, etc.). Some imports are subject to anti-dumping duties.

Products Having a Higher Customs Tariff

The sectors of fabrics and items of clothing (high duties and quotas) and foodstuffs (preferential treatment and many tariff quotas, CAP) still experience protection measures. According to the recently published 2019 EU Trade Policy Review (WTO), the sector with the highest average tariffs is the dairy sector (32.3%), followed by sugar and confectionery (27.0%), meat (19.0%), cereals and preparations (17.2%) and fruit and vegetables (13.0%). Concerning non-agricultural products, fish and fishery products (11.8% on simple average) and clothing (11.6%) are the sectors with the highest tariff protection.

More information can be found in the WTO Tariff profile of the EU.

Preferential Rates

For countries with whom a bilateral or a multilateral agreement have been signed by the European Union.

To get further information consult the website of the European Union.

To get further information on customs policies in the European Union, please check the exhaustive report by the European Commission.

Customs Classification

Spain uses the harmonised system.

Method of Calculation of Duties

Customs duty is calculated Ad Valorem on the CIF value of the goods, in accordance with the Common Customs Tariff (CCT) for all the countries of the Union. TARIC, the integrated Tariff of the European Union, is a multilingual database integrating all measures relating to EU customs tariff, commercial and agricultural legislation.

Method of Payment of Customs Duties

Customs duty is payable in cash (in Euros, by check, by money order, by wire transfer); payment terms can possibly be granted via collection credit or customs credit.

Import Taxes (Excluding Consumer Taxes)

none

Labeling and Packaging Rules

Packaging

It must be in accordance with the European legislation on the prevention of risks to the consumers' health and on environment protection and particularly relating to waste treatment. Packages in wood or plant material can be subjected to a phytosanitary check.
For further information, refer a summary of the European legislation on this subject.

Languages Permitted on Packaging and Labeling

All the essential information on the product must be labeled or counter-labeled in Spanish (+ other joint official languages, potentially for commercial reasons).

Unit of Measurement

It is compulsory to use the Metric system

Mark of Origin "Made In"

Compulsory and is checked by the Customs department

Labeling Requirements

Consumption age for alcohol, colorants, standards, etc. In addition to EU's mandatory and voluntary schemes, national voluntary labeling schemes, often appreciated by consumers, might apply.

Specific Regulations

The European legislation provides for special labelling rules for certain products such as food, household appliances, sportswear, textiles, etc. Cigarettes, electrical products, drugs, pharmaceutical and cosmetics, fertilizers and fungicides, firearms, motor vehicles, tires and tubes are subject to specific regulations.

Distribution Network

E-commerce

Internet access

Spain is the fifth most populated country in the EU, with a population of 46.5 million people, out of which 80% uses the internet. It is also one of the fastest-growing e-commerce markets in the region. User penetration is at 53.4% in 2018 and it is expected to hit 65.9% by 2022. According to Eurostat, 69% of all internet users in Spain access it daily.  In 2017, the number of smartphone users in Spain was 30.3 million. That number is predicted to grow by 7.7 million to 34.3 million users in 2021, according to Statista estimates. The operating system market in Spain is dominated by Android with a percentage of 89.4 of the market in January 2017.  As for the web search engines, the most popular ones are Google (95.44%), Bing (3.08%), Yahoo! (1.2%), DuckDuckGo (0.13%), MSN (0.06%) and Baidu (0.02%).

E-commerce market

E-commerce turnover in Spain has increased in the second quarter of 2017, with a year-on-year growth of 23.4% to total 7.338 billion euros, according to the latest e-commerce data available on the CNMCData website. In 2017, Spanish B2C e-commerce turnover grew by 8% to €28 billion. Spain had an online population of 37,8 million people who were aged 15 and older. Of the total online population, 26.1 million bought something online in 2017. The large majority of cross border e-commerce is completed with other EU countries, representing over 92% of the total cross-border amount. Broken down into number of transactions, 44.2% of sales were registered on Spanish websites and 55.8% on foreign websites in the second quarter of 2017.

E-commerce sales and customers

There are about 26.1 million e-commerce users in Spain, with an additional 5.6 million users to be shopping online by 2021. The top product categories for online purchases by consumers were travel and hotel, direct marketing, ticket services, electronics, clothing and food. The ten areas with the highest percentage of e-commerce transactions are CDs, books, newspapers and stationary (6.4%), land transport of passengers (6.2%), direct marketing (6.2%), gambling and betting games (5.7%), activities linked to transport (5.2%), clothing items (5.1%), air transport (4.3%), artistic, sports and recreational events (4.3%), travel agents and tour operators (3.2%) and computers and software (2.8%). The average spending per eShopper was US$ 1,265 in 2017. Credit cards amount for more than half of all online transactions, followed by cash (32%), electronic bank transfer (20%) and eWallet (14%). In terms of percentages e-commerce isn’t that big in Spain. It accounts for only 3% of total retail sales. Most online shoppers (88%) use computers to make their purchases, while smartphones are the second most popular option (9%) followed by tablets (6%).

Social media

According to an April 2017 report by the Interactive Advertising Bureau Spain (IAB Spain), Facebook was used by 91% of social media users ages 16 to 65, while WhatsApp came in second at 89% of respondents. WhatsApp users spent an average of over five hours per week on WhatsApp—more time than users of any other platform. The most popular social networks in Spain are Facebook (71,42%), Pinterest (9,81%), Twitter (7,5%), YouTube (5%), Instagram (4,8%) and Tumblr (0,79%). eMarketer estimates that 61.9% of internet users and 45% of the population in Spain will be social network users in 2018. Both figures are low for Western Europe.

Direct Selling

Evolution of the Sector

According to the World Federation of Direct Selling Associations, Spain had 250,670 independent representatives and 872 million USD in direct retail sales during 2017, a 0.8% drop compared to 2016. These sales were divided by sector as follows: cosmetics and personal care (30%); wellness (30%); home care (14%); clothing and accessories (12%); household goods and durables (5%); and books, toys, stationary, etc. (5%), among others.

According to Euromonitor International, direct sellers   contact current and potential clients via apps, official websites, WhatsApp, and social media to handle payments, delivery, and customer service. Furthermore, most direct sellers are women due to the low barriers of entry and company support, most work on a part-time basis, and many are required to become self-employed for tax purposes if their turnover is greater than the Spanish minimum salary.

Euromonitor International claims Vorwerk España is the largest direct selling company given the success of its Thermomix product (Spain is the fourth largest consumer of this product). Herbalife International de España also has a large number of direct sellers and aggressive marketing.

Commercial Intermediaries

Trading Companies

 

• Type of Organization

The importers-cum-distributors play the main role. They usually have a national coverage (including the Balearic Islands and the Canary Islands) and they depend on the regional wholesalers in areas where they do not have their own delegation. Each is specialized in a particular line of business.

• Main Actors

Spanish association of wood importers (SAWI)
World Steel Association

Wholesalers

 

• Type of Organization

They usually have only a regional coverage, or even local, but they often group together sector-wise and/or geographic location-wise. They are sometimes importers.

• Main Actors

Asomafrut, association of fruits and vegetables wholesalers of Madrid

Using a Commercial Agent

The Advantages

It is evidently the least expensive form to afford and to open the market.

Where to Be Vigilant

The inherent disadvantages:
- its legal status being different from that of the Sales Representative (see the model contract)
- the difficulty in finding an agent. The 50,000 agents in business are categorized into 68 regional « colleges » (orders) which accredits them to practice the profession. These « colleges » are members of the CGAC (General Council of Sales Agents Colleges of Spain).

Elements of Motivation

The remuneration amount is an important element of motivation. Checking and close contacts will be necessary for tracking the agent's activity efficiently.

The Average Amount of Commission

The agent remuneration can be a fixed amount, a commission or a combination of the two.

Breach of Contract

The agency contract can be for a fixed period or an open-ended contract. The notice period for an open contract is a month for every year the contract is in force with a maximum of 6 months. Council Directive 86/653/EEC establishes the rights and obligations of the principal and its agent.

Finding a Commercial Agent

CGAC, General Council of Commercial Agents' Colleges of Spain
Alibaba

Setting Up a Commercial Unit

The Advantages

It is the best way to track the monitor closely and to get a « Spanish » image, which is reassuring for customers. In an effort to simplify the process of setting up a business in Spain, the "Ventanilla Unica" was created, providing businesspeople with the assistance of an expert.

Where to Be Vigilant

It is necessary to carry out beforehand a detailed market study to make sure that the potential turnover and margins can allow the structure to be taken on. The time for return on investment is around 3 years. Apart from the director, it is preferable to recruit Spanish employees who will know the specific requirements of the market.

Different Possible Forms of Settlement

 

• A Representative Office

This is not an effective form.

• A Branch Office

The Spanish legislation does not facilitate the establishment of this type of structure.

• A Company

This is the best option which enables the foreign company to become assimilated and put it on an equal footing with its Spanish or foreign competitors who have chosen this system.
Two forms are possible:
- la S.L., Sociedad Limitada (equivalent to a limited liability company) whose minimum capital must be 3,005.06 EUR immediately payable. This is the best way to start up.
- the S.A, Sociedad Anonima for which the minimum capital must be 60,101.21 EUR divided into shares. It must be fully subscribed when the company is formed and payable up to at least 25%.

Franchising

Evolution of the Sector

This is a recent (started in the 90s) but dynamic sector. It presents a guarantee for the small retailer and it is being consolidated. The franchise sector has steadily grown over the past several years. According to the 2020 report by Spanish Franchise Association (AEF), the Spanish franchise system consisted of a total of 1,381 brands in 2019 - 0.36% more than in 2018, when there were 1,376 networks. There were 1,120 signs of Spanish origin (81.9% of the total) and the remaining 249 (18.1%) came from a total of 26 countries, in particular France (56 brands), the United States (46), Italy (44), the United Kingdom (16) and Germany and Portugal (14).  In total there were 5 more networks, 2 domestic and 3 foreign, compared to December 2018. Of these 1,381 franchises, the sector with the highest number of brands was "Fashion", with a total of 242 networks (5 fewer than the previous year), followed by "Hospitality/Catering", with 207 chains (11 more than in 2018), and "Aesthetics/Aesthetics", with 113 networks (2 more than in the last relationship).

The entire Spanish franchising system at the end of 2019 recorded a turnover of 26,154.3 million Euro, compared to 27,707.2 million Euro achieved in 2018, which is equivalent to a 5.9% decrease. As regards the number of outlets in operation, at the end of 2019 there were a total of 77,819 outlets in Spain, of which 19,787 owned and the remaining 58,032 franchised. A key aspect of the franchising system is that it generates employment in Spain: at the end of last year the system employed 294,231 people, 359 more (0.13%) than in 2018.

When drawing up contracts, franchise companies - whether Spanish, foreign, or the master franchisee - must register with a special administrative Franchisors Registry and need to meet the requirements of the Disclosure of Pre-Contractual Information. The intended franchisee must receive all the required information in writing at least 20 days prior to signing a franchising contract or a pre-contract, or prior to any payment to the franchisor. All new contracts should comply with Spanish and EU legislation. Current contracts should also be reviewed whenever possible.
Legislation regulating franchise matters in Spain includes:

• Article 62, of Law 7/1996, of 15th January, of Retail Sector Management.
• Royal Decree-Law 201/2010, of 26th February, regulating  the exercise of commercial activity under a franchise regime and the communication of data to the Registry of Franchisors.
• Law14/2013 of 27th September, Support for Entrepreneurs.
• Law 20/2013 of 9th December, Warranty of Market Unity.

Some Big Franchises

Grupo Lizarran, restaurant business
Mc Donald's, fast food
MRW, transport express
Juegos y sueños, child welfare, toys…
Mango, fashion
Lists of franchises by sector

For Further Information

SAF, Spanish Association of Franchisers
, Lists of franchises per sector

Finding Assistance

Export Trading Companies

ICEX - Invest in Spain

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