Doing Business in Spain
Toronto, 20th May 2008
Invest in Spain:
Economy, Business and
Advantages for
Canadian companies
May, 2008
Marian Scheifler Phd.
Chief Operations Manager
1. Political Structure.
2. Spain in Figures (I-II).
3. Canada-Spain: Some things we share.
4. Main Agreements Spain-Canada.
5. Main Reasons to Invest in Spain (I-III).
6. About INTERES.
1. POLITICAL STRUCTURE
POLITICAL FRAMEWORK
Political organization
Parliamentary Monarchy.
Head of State
King Juan Carlos I.
President of
government
José Luis Rodríguez Zapatero, since 11 April 2008 (2nd mandate).
Parliamentary
representation
Congress of Deputies (350 members) and Senate (264 members).
Governing party
Partido Socialista Obrero Español (PSOE).
Territorial
Organization
The State is organized in municipalities, provinces and Autonomous
Communities.
European Union
Member since 1986 and founding member of the European Monetary Union
(January 1999).
International
organizations
UN, OECD, OAS, World Bank, IMF, IDB, WTO, NATO, OSCE.
2. SPAIN IN FIGURES (I)
ECONOMIC DATA
Currency:
Euro, divided into 100 cents.
Real GDP growth:
3.5% (fourth quarter 2007).
Population:
45.2 M, 1.10% growth rate.
GDP per capita:
$ 33,433 (2007 first estimate).
Inflation:
4.5% (March 2008).
Public Accounts:
1.3% surplus in 2007 (Bank of Spain).
Unemployment rate:
8.6%.
Official interest rate:
4% (European Central Bank– July 2007).
Breakdown by sector(s) :




Services: 67%
Manufacturing: 16%
Building: 13%
Agriculture: 4%
2. SPAIN IN FIGURES (II)
1. The world’s 8th largest economy (market exchange
rate); 11th (purchasing power parity).
(IMF-2008)
2. The 3rd largest investor in the world and the 2nd largest
in Latin America.
(World Investment Report 2007 (UNCTAD)
3. The 8th largest FDI stock worldwide (6th in the EU).
(World Investment Report 2007 (UNCTAD)
4. The 10th best place to live and the preferred work
destination for Europeans.
Worldwide Quality-of-life Index, Economist Intelligence Unit
5. The world’s 2nd tourist destination.
(Tourism Organization (WTO))
3. CANADA – SPAIN: SOME THINGS WE SHARE
 Multilingual and multicultural societies.
 Highly decentralized administrations: important role played by
Provinces and Autonomous Communities.
 Economic performance.
 Great potential to strengthen trade and investment ties: current
trade and investment flows belie the similarities in economic
performance and complementarities in our economies.
CANADIAN COMPANIES IN SPAIN
4. MAIN AGREEMENTS SPAIN - CANADA
 S&T: (Science and Technology)
 Spain’s R&D Plan for 2008-2011 identifies Canada as one of the
three non-EU strategic countries for cooperation.
 Canadeka: Bilateral program for technological cooperaton, CDTI –
NRC. Support to joint projects of Spanish-Canadian companies.
 CSIC-NRC: Development of research and innovation projects.
 Genoma España – Genome Canada: Joint research projects.
 CESCE-EDC: Reinsurance agreement for joint operations of
Canadian and Spanish companies.
 Double taxation: Agreement to avoid double taxation on
income and capital.
5. MAIN REASONS TO INVEST IN SPAIN (I)

Geostrategic location:
 Privileged position for southern Europe's key markets, Latin
America and North Africa.

Potential access to over 1.2 billion consumers:
 45 million consumers in Spain.
 443 million consumers in Europe.
 Entry point for non-EU Mediterranean countries with 264
million consumers. (privileged relations with Morocco and
Algeria).
 Hub for South and Central America, with 560 million
consumers.
 Financial protocols with North Africa and Latin America.
5. MAIN REASONS TO INVEST IN SPAIN (I)

Ultra Modern Transport Infrastructure
 47 airports.
 53 ports on both the Atlantic and the Mediterranean coasts.
 3rd largest EU highway network.
 Ambitious plans for high speed trains (Spain will be the world
leader with 2,230 km in 2010).
 State-of-the-Art metro system in major cities.
5. MAIN REASONS TO INVEST IN SPAIN (II)
Economic criteria: Competitive operating costs
Hourly labor cost. 2006
35,0
2100,0
30,0
1800,0
25,0
1500,0
20,0
1200,0
15,0
900,0
10,0
Office Utilization cost (€/year an m2)
600,0
Source: Eurostat 2007
5,0
Electricity prices for industrial use (€ cents/Kwh)
Madrid
Kuwait
Seoul
Dubai
N.TYork
Milan
Dublin
Bombay
Paris
H. Kong
Tokyo
Poland
Hungary
0,0
Moscow
Source: Eurostat 2008
Czech R
Portugal
Spain
EU-25
EU-15
Austria
France
Belgium
Sweden
0,0
London
300,0
Cost of life, 2007 (N. York =2007)
140,0
12,0
120,0
10,0
100,0
8,0
80,0
6,0
60,0
4,0
40,0
2,0
Source: Eurostat 2008
Frankfurt
Barcelona
Madrid
Amsterdam
Dublin
N.York
Paris
Milan
Tokyo
London
0,0
Moscow
France
Spain
UE-15
Portugal
Belgium
Netherland
Germany
UK
Luxemb.
Italy
0,0
Ireland
20,0
Source: Cost of Living Survey 2007, Mercer Human Research Consulting
5. MAIN REASONS TO INVEST IN SPAIN (III)
Fiscal incentives framework map
6. About INTERES
INTERES Invest in Spain is the leading
government organization that supports foreign
companies seeking to set up or expand their
business in Spain.
We provide comprehensive, efficient and
confidential consultation at no cost during all
stages of the investment process.
THE ONE-STOP SHOP FOR INVESTORS IN SPAIN.
Investor
Services
Pre-Installation
Installation
Operation
Expansion
Benchmarking
& Attraction
Support to new
invertors
strengthening
of loyalty
Growth
 Up-to-date
information
 Market studies
 Spanish offer
 Practical
pointers for
doing business
 Availability of
grants and
incentives
 Help with cost
appraisals
 Organization
of visits to
potential
sites
 Identification
of partners
 Finding
specialist
advisors
 Help with
licences &
permits
Relocation
Retention
 Provision of
institutional
contacts
 Planning for
retaining
investments
 Fostering
expansion
 Relocation
studies (within
Spain)
 Network
development
Thank you very much!
Doing Business in Spain
Toronto, 20th May 2008
Spain – High Added Value in ICT
Spain
High added value in ICT
Andrés García
ICT Investor Services Manager
TORONTO, May 20th, 2008
Spain – High Added Value in ICT
I. Why ICT?
i.
Infrastructure Facts
ii. ICT Market
iii. Higher Education
iv. ICT Industry
II. Business Opportunities
Spain – High Added Value in ICT
I. Why ICT?
ICT SECTOR

Spain has one of Europe’s most liberalized
ICT markets. Full telecom. market
liberalization in 1998:
 Increased the number of players (operators)
 Improved the quality of services

Telecoms Infrastructure Facts 2006:
 39 landline service operators
 15 mobile service operators
 172 Internet Service Providers
 37 local cable operators
 More than 1,800,000 km of transmission network
 99.9% of Spain’s telecom. network is digital
 20,09 million landlines in operation in Spain
 110% mobile telephone penetration (Q1.2008)
 90% broadband penetration in business (2007)
Source: CMT- Telecom Market Commission (Annual Report 2006) www.cmt.es
Spain – High Added Value in ICT
I. Why ICT?
ICT MARKET
ICT represents a market of more than
€101 billion...
Other
Electronic comp. &
equip.
23,1%
10,6%
49,6%
Telecom. Services
16,8%
Information
Technologies
…and a 9.6% of Spain’s GDP
Source: AETIC – Spain’s ICT & Electronics Association (2007)
Spain – High Added Value in ICT
I. Why ICT?
ICT MARKET GROWTH
Spain’s ICT’s market growth rate is well above EU
average:
EU* ICT market growth by main countries
2005-2007 (in %)
7,0%
6,0%
5,0%
4,0%
3,0%
2,0%
1,0%
0,0%
Benelux
France
Germany
Italy
2005
Nordic
(excl.
Norway)
2006
Spain
UK
2007
Source: EITO –European IT Observatory. Update 2006 in Cooperation with IDC.
Market Value 2006: 644 billion €
*excl. Cyprus & Malta
EU*
Spain – High Added Value in ICT
I. Why ICT?
EDUCATION
 More than 13 500 engineers graduate in ICT-related studies every year
 96 000 vocational further education students taking ICT courses
Source: INE and Ministry of
Education and Science
Spain – High Added Value in ICT
I. Why ICT?
ICT INDUSTRY
Over 37 500 ICT companies already operating in Spain
Source: INE – Spanish National Statistics Institute
Spain – High Added Value in ICT
I. Why ICT?
EXCELLENCE
 Spanish companies are present and
recognized in major international markets:
Telefónica, Indra, Panda Software, Telvent, HISPASAT, ITP,
CIRSA, AEQ, RYMSA, Ampo, ONA, GMV……
 Spain is a leader in advanced technologies:
 3 out of 5 flights in the world use Spanish
software for landing.
 13 of the 15 major North American oil and gas
companies
have
Spanish
management,
control and information systems installed.
 ICT’s investment in R&D accounts for 40%
of the total amount invested by the private
sector in Spain
Spain – High Added Value in ICT
I. Why ICT?
ICT INDUSTRY
Leading ICT multinationals are
already located in Spain taking
advantage of Spain’s benefits:
Spain – High Added Value in ICT
I. Why ICT?
Stability
Cost
Capacity
Maturity
Excellence
Spain – High Added Value in ICT
II. Business Opportunities

Spain offers specific opportunities in
 Nearshore Platforms
 Digital Terrestrial Television
 Auxiliary Mobile Services
 WiMAX
 VoIP services
 Electronic ID Support Services
 Intelligent Home
 Digital Cinema
 Commercial B2B Interchange Systems
 Free Software Activities
Spain – High Added Value in ICT
Nearshore
The unique combination of a major EU country
with a stable, healthy economy and a history of
technological and business innovation, coupled
with relatively low costs, staff rotation and
inflation rates creates a permanent source of
highly qualified business and ICT professionals
enabling Spain to sustainably deliver services to
other European countries.
A focus upon higher value services, provided by
demonstrably experienced professionals, from a
European location to provide an outstanding ValueRisk-Cost relationship
Spain – High Added Value in ICT
Nearshore

Competitive advantages:
 Maturity in technology- and commercial
practices
 Inner IT demand mature and with high
growth expectancy
 Availability of experienced human resources
and Higher Education Centres
 Telecom. Infrastructures & transport costs
 Outstanding Value-Cost-Risk relationship
Spain – High Added Value in ICT
Mobile Auxiliary Services
 Potential market:
 Large number of users (51 million lines) with a
high penetration rate (110,1%)
 Mobile turnover in 2006 of €19.5 billion (+8%)
 Legislation open to free competition and entry of
new companies
 Prices of data services dropping, getting closer
to those of cable
 Existence of collaboration forums between the
various players in the market
Spain – High Added Value in ICT
Mobile Auxiliary Services

Development, establishment and
commercialization of new services:
 Instant Messaging and Multimedia
 Video on Demand
 Localization Based Services
 Mobile TV
 Video Streaming
 Voice-controlled access to contents
 Alternative payment systems
Spain – High Added Value in ICT
Thank you very much!
Andrés García
Investor Services Manager - ICT
agarciam@interes.org
Doing Business in Spain
Toronto, 20th May 2008
What makes Spain a
winning location for
the Life Sciences &
Biotech industry?
Ana Arias
Biotech & Life Sciences Investor Services Manager
INDEX
1. Why Spain?
2. Why biotechnology?
3. Why you can bet on Spanish biotech
4. A piece of history
5. Business opportunities
Why Spain?
 Highly qualified and competitive human
resources
 Quality and standard of living
 Geo-strategic location
 Cultural and educational levels
 Weather
 Natural resources
 Logistics...
Spain has solid scientific and technological
capabilities that have enabled a competitive
bio industry to emerge
Why Biotechnology?
•
•
•
•
Employment: around 80,000 people
Over 500 enterprises involved in
biotech activities
Turnover: over €19,000 million and
investment of over €200 million in
research and development (R&D).
Annual growth of around 30% in
total revenue.
………making Spain the most
dynamic European country in
this area after Ireland.
Source: ASEBIO – Spanish Association of Bioenterprises (2004)
Why Biotechnology? (cont.)
• Bio-economy heads Spain’s strategic
agenda.
• The Spanish pharmaceutical market is the
fifth largest in the EU-15 and the seventh in
the world.
• Favourable financial environment: increase
in the volume of venture capital operations
in biotechnology.
• New venture capital funds specialized in
biotechnology and national networks of
business angels are being created
Why you can bet on Spanish biotech
I.
Solid Science
-Good scientific output
Groups and Centers of Excellence
-R&D Integrated System
Efficient WorkFlow
Excellent conditions for Translational Research
Modern Science Parks and state of the art facilities
Good partnership opportunities
-“Value for Science”
Every euro in the lab is put to good use
II. Great potential
-Huge body of knowledge yet to be exploited
-Human Capital, very well trained
Why you can bet on Spanish biotech(cont.)
III. Emerging bio-economy
-Increasing support from Governments for R&D and
bio-enterprise creation
-Competition among local Governments for talent and capital
-Good balance between being competitive on cost and competitive
in differentiation
IV. Good personal attitudes
-Creativity
-Sense of community and focus on colective objectives and
challenges
-Positive spirit and commitment
Why you can bet on Spanish biotech(cont.)
A. Solid Science: Scientific and Technological Facilities and
Capabilities
The Genomics, Proteomics and Bioinformatics platforms boost the
national participation in biotechnological advances:
-National DNA Bank
-Spanish National Genotyping Centre
-National Proteomics Institute ProteoRed
-National Bioinformatics Institute INB
A new framework for co-operative biomedical research is being created:
-The Biomedical Research Thematic Networks (RETICs)
-The Biomedical Research Centers Network (CIBER)
Why you can bet on Spanish biotech (cont.)
A. Solid Science: Principal Bio-clusters
Geographic distribution of Spanish biotech companies
6%
5%
18%
26%
7%
•Catalonia and Madrid,
followed by the Valencia
Region, Andalusia, Basque
Country and Galicia have
the highest concentration of
biotech companies.
18%
•The rest of the Spanish
regions are also designing and
implementing strategies.
<5%
5-15%
15-25%
>25%
Source: ASEBIO Report – Spanish Association of Bioenterprises (2006)
Why you can bet on Spanish biotech (cont.)
B. Great potential to unlock: Workforce
 7,000 researchers in biotechnology and
biomedicine: 11th position in the world.
 4th position in Europe in scientific output in
biotechnology.
 1995-2003: number of scientific research papers
published in Spain grew by over 12%.
 66% of biotechnology researchers working within
the public Spanish R&D System were cited by U.S.
patents.
Why you can bet on Spanish biotech (cont.)
C. Emerging bio-economy: Legal framework
 The new Spanish Law on Biomedical Research: creation
of a National Biobank Register
 Favourable legal framework: Cultivation of Genetically
Modified Organisms (GMO) and a unique Traceability
and Labelling Law
 Full Tax exemption on biofuels until Dec 2012.
 Other Spanish instruments and laws.
Why you can bet on Spanish biotech (cont.)
C. Emerging bio-economy: Government support
 The Ingenio 2010 Programme: to meet the Research,
Development and Innovation convergence objectives of the
Lisbon Strategy.
 Sustained annual growth rates of the government’s budgets
in recent years.
 The Spanish Tax System is one of the most advanced in the
world, especially in the Research, Development and
Innovation field.
 The adoption of the Young Innovative Company Status will
no doubt help biotechnology firms.
A piece of history
• 2001: The Spanish National Cancer Centre (CNIO) launches its first
Oncochip.
• 2002: Abengoa signs a $35.5 M R&D project with the U.S Department of
Energy (DOE).
• 2003: Serono concentrates global production of its growth hormone in
Spain.
• 2005: Genetrix receives the first Orphan Status designation by the
EMEA in Europe for a medicinal product based on the use of stem
cells of adult origin.
• 2005: GSK opens its Molecular Screening and Tropical diseases research
facilities in Spain.
• 2005: Natraceutical buys Braes Group (€80 M). In 2006 it acquires
Forté Pharma (€82M).
• 2006: Spain continues to be the European leader in the cultivation of
genetically modified crop varieties with a total of 53,667
hectares under cultivation.
• 2007: The EMEA approves Zeltia's drug Yondelis for the treatment of
soft tissue sarcomas.
• 2008: The OMS designated the ONT (Organización Nacional de
Transplantes) as a WHO Collaborating Center on Donation and
Transplants
Business Opportunities
BIO Business Opportunities
Spain offers specific opportunities in…………………….
 Biochips: towards a
personalized medicine
 Food quality and security
 Private Equity
 Functional foods
 Organic farming
BIO Business Opportunities (cont)
Spain offers specific opportunities in…………………….
 Nanobiotechnology
 Generic drugs
 Gene silencing
 Production of therapeutic
proteins using non-genetically
modified plants
 Algae active ingredients
BIO Business Opportunities (cont.)
Spain offers specific opportunities in…………………….
 Production of enzymes with
industrial applications in
transgenic plants.
 Drug development from target’s
structural determination.
 Pharmacogenetics: Genetic
biomarkers.
 Molecular diagnosis. DNA and
protein arrays.
 Bioinformatics.
Leading pharmaceutical & biotech multinationals
are already successfully located in Spain
BIOSPAIN 2008
BIOSPAIN 2008 is the International Meeting on Biotechnology
to be held in Granada from the 17th to the 19th of September
2008.
Five events in one:
BIOTEC 2008 " - Scientific Congress
Plenary Sessions: "Towards a Sustainable Bioeconomy“
Investment Forum
Partnering
Trade Fair and Bio-Regions Hall
Thank you very much
See you at BIOSPAIN’08!
www.biospain2008.org
For further information please contact:
Ana Arias
Life Sciences & Biotech Life Sciences & Biotech
Investor Services Manager
Email: aarias@interes.org
Doing Business in Spain
Toronto, 20th May 2008
“DOING BUSINESS IN SPAIN”
LEGAL ENVIRONMENT
Best Practices
Alberto Echarri
Partner - Head of M&A
Gómez-Acebo & Pombo Abogados
Toronto, Ottawa, Montreal
May 2008
INVEST IN SPAIN: FACTS & FIGURES




Spain is the world’s 8th largest economy, with
sustained growth above the EU average. It is
the country with the fastest rate of job
creation in the OECD.
Spain is the 8th largest FDI recipient in the
world and the 3rd largest investor in the world.
Spain has a privileged geo-strategic position:
access to 1,300 million consumers in the
world. It is an international business hub.
440 million people in the world speak Spanish.
58
INVEST IN SPAIN: FACTS & FIGURES
What foreign investors value most of Spain is:
1.
2.
3.
Cost of investment
Local human resources
Geographical & Financial Environment
Generous incentives for R&D.
Access to the EU and Latin America.
59
INVEST IN SPAIN: FACTS & FIGURES
More than 11,000 foreign companies & 54
international banks are located in Spain.
Spain has modern infrastructures and excellent
business opportunities, namely in ICT,
Biotechnology, Renewable Energy, Environment &
Water Treatment.
Quality of life: Spain is the first choice for European
executives faced with relocation, according to
Financial Times. It is the world’s 2nd tourist
destination and is known for its passion for work,
arts, sports, and life.
60
PRIORITY SECTORS: ICT
Spain has one of the most burgeoning ICT (Information &
Communications Technologies) markets in Europe, with a
turnover of 87+ billion €.
40% of private R&D investment in Spain is devoted to this
sector.
Spain offers tax advantages / cost relief for companies.
The Spanish telecom network is completely digital and has
over 1,400,000 km of transmission networks. Mobile phone
penetration exceeds 105%. Growth in broadband
connection was more than 45% in 2005, with 4.5 million
users.
16% of employees in this sector are devoted to R&D.
61
PRIORITY SECTORS: RENEWABLE ENERGIES
3 main renewable energy resources:
1. Solar
2. Wind
3. Co-generation
Spain is one of the most attractive countries in the world for
renewable energy projects: Spain is the 3rd country in the
world in wind energy. Spain has 13% market share in this
sector.
According to Greenpeace, if Spain exploited its natural energy
resources, it would have 50 times more energy than
necessary by 2050.
Spain possesses insulation towers for solar energy:
Companies will invest over 1 billion $ in solar parks over
the next few years.
62
PRORITY SECTORS: BIOTECH, PHARMA, HEALTH
The biotech sector has expanded over 300% in the last 4 years.
Spain is the 4th country in the EU for biotechnology scientific
production.
Spain has 60 scientific & technological parks within the biotech
industry, with 150 companies fully dedicated to biotech whose
revenues total 420 million €.
The number of biotech companies has multiplied by 3 in the last
5 years, such that over 14,500 professionals & 425 research
units are involved in biotech projects in Spain, producing over
4% of the world’s publications in this field.
Spain’s government wants R&D in this sector to reach 2% of GDP
by 2010. As such, many new start-ups are funded by the
government.
Spain collaborates with over 200 centers in the development of
almost 128 clinical studies of the highest quality.
63
PRIORITY SECTORS: ENVIRONMENT
Spain is the world’s leader in water treatment and
desalination using reverse osmosis technology. There are
over 900 desalination plants in Spain.
1.5 million m3 of desalinated water is produced per day.
The economy is looking for a new impulse in recycling.
There are 814 Spanish companies authorized to work as
used-vehicle treatment centers.
Cars & motors are increasingly environmentally friendly.
4 million tons of recycled waste was produced from 20002004. 250,000 tons of tires are recycled per year.
64
PRIORITY SECTORS: ENVIRONMENT
According to European regulations, Spain and the rest
of the EU countries must reuse and recover 95% of
materials used in vehicle production by 2015.
Recycling culture also affects home appliances, such
that they are dismantled rather than buried in
landfills. Spain aims to manage 160,000 tons of this
waste using environmentally-friendly methods.
Currently, 100,000+ tons are treated.
The number of home appliances recovered grows by
10% every year. Spain is working to recover and
transform sludge from construction material
extraction processes and agricultural waste plastic.
65
MOST DYNAMIC SECTORS
1. Private equity
– Declining
Energy
– Power companies: ENDESA/IBERDROLA
– Renewable Energies
Air transport
– IBERIA
– SPANAIR
Hospitality
Chemical sector
Environment
Real estate
66
THE LEGAL ENVIRONMENT
Sophisticated legal system
– Meets EU/US/CAN standards
– Principles equivalent to Common Law
Common legislation throughout the country
– Civil law exceptions: inheritance / family law
– Specific sector regulations:
• Generally central regulations
• Regional legislation for delegated matters
– Transportation
– Hospitality sector
– Environment
– Water treatment
– Tax in Basque Country, Navarra and Canary Is.
Municipal regulations
67
THE LEGAL ENVIRONMENT
Friendly and open environment
– Contract law principle of freedom of will of the
parties
– Contractual restraints limited by:
• EU competition regulations / vertical
restraints
• Employment law
– Freedom of investment / disinvestment
– Freedom of establishment in the EU
– Foreign investment deregulation
68
ESTABLISHING A BUSINESS
Incorporation formalities
–
–
–
–
–
Standard documentation
Notarized incorporation: 10 days
15-30 days for registration of company
Companies may operate from day 1
SS and TAX registration: day 2
No registration of agreements except
– Effects vis-à-vis third parties
• Corporate documents
• Real Estate deals
• Guarantees
69
HOME COUNTRY AGREEMENTS
Generally adjustable to local requirements
– Commercial agreements
– Acquisition agreements
Choice of law
Choice of forum
Choice of language
Arbitration
70
MOST COMMON VEHICLES
Common distribution agreements
– Agency
– Distribution / Licensing / Concession
– Franchising
Joint ventures
Direct acquisition of
– Shares
– Assets
– Securities
71
AGENCY AGREEMENTS
Free will of the parties
Contractual restraints
– In-term
– Post-term
Public order rules / Agency Act
– Goodwill indemnity payment
– Spanish law
– Spanish forum
72
DISTRIBUTION AGREEMENTS
COMMERCIAL DISTRIBUTION
– Exclusive / Non-exclusive
– Contractual restraints
– Limited non-compete clauses
• EU Regulations on concessionaires
LICENSING/TECHNOLOGY TRANSFER
– Know-How, Technical Assistance, IP
– EU BER on licensing agreements
FRANCHISING
– Represents almost 8% of retail trade
– Governed by agreement
– Pre-contractual information required
– BE Regulation for anti-compete clauses
73
JOINT VENTURES (I)
Common SPVs
– Limited liability company (SA / SL)
– UTE
– EIG
Legal Structure/Documentation
– Corporate SPV
– By-laws of SPV
– Shareholders´ Agreement
– Business Plan
74
JOINT VENTURES (II)
Corporate governance rules
Non-compete clauses
Territorial scope
Veto rights
Investment restraints
Financial provisions
Step-out clauses
– Russian Roulette
– Put and call options
75
ACQUISITION (I)
Standard international practices
Players
LOI
Offer letter and exclusivity period
NDA
DD Review
– Legal
– Tax & Finance
Acquisition agreement
Agreements with managers and directors
Non-compete covenants
76
ACQUISITION (II)
Price
– Price retention
– Escrow / bank guarantees
Reps. & Warranties
– Standard Common Law provisions
– Time limitations
– Caps
– Labour contingencies
Conditions precedent (antitrust)
Interim period clauses (MAE, BAU)
77
ACQUISITION (III)
Public companies
– 30% threshhold
– Reporting obligations
Financing
– Acquisition finance
• Financial assistance prohibited
• Guarantees
– Project finance
• Project guarantees
– Shareholder loans: subordinated/Equity
– Capital contributions
78
REAL ESTATE DEALS
Corporate acquisition
Assets
Due diligence
– Land Registry searches
– Zoning certificates
– Leased property
Purchase agreement
– Notarized deed
Complex acquisitions
– Shopping malls
– Sites under construction
79
GUIDE FOR FOREIGN INVESTORS
Friendly legal environment
– Sophisticated legal advisors
– Reliable judiciary
– Arbitration
Standardized practices
– Adjustment of home agreements
– Choice of law and forum. English language
Exchange control de-regulation
Tax-efficient SPVs/Spanish Holdcos
Standard business and financial practices
Minor business culture differences
80
Doing Business in Spain
Toronto, 20th May 2008
Title
Case study of a biotechnology startup in Spain
The path to Spain
Alec Mian
Canada
B.Sc. McGill University, Montreal.
UK
Ph.D. University of Cambridge, UK
USA
Harvard Medical School, Boston.
Co-founded Gamera Biosciences (Cambridge, MA). Sold to Tecan Holding (SWX: TECN) in 2000
Spain
3 year sabbatical, co-founded a design company La Evolucion, SL.
Currently on Board of Directors of Santa & Cole, SA. (Design)
Started Genmedica Therapeutics, SL.
Company goals and strategy
Goal
• Create a focused portfolio of drug candidates for diabetes
• Financable, milestone driven development path (seed, Series A, B and C…)
• Product partnering opportunities with large pharma in 2009/2010
• Exit by trade sale or IPO (2011)
Strategy
• Focus on an emerging, protectable area within diabetes
• Leverage local resources to get started
• Attract international resources to accelerate growth and value
History
2005
• Incorporated
• Licensing with University of Barcelona - first drug candidate (GMC-1)
2006
• GMC-1: research and additional patents filed
• GMC-2: drug candidates researched and patents filed
• Initiated formation of Board of Directors (BOD) and Scientific Advisory Board (SAB)
2007
• Largest first round biotechnology financing in Spain (Spanish VC’s: BCN-Empren,
Innova31, Unirisco; Public: ENISA, CIDEM, Torres Quevedo)
• GMC-3 research and patents filed
• Initial development team hired. CRO’s work initiated
2008
• Cellular and animal based development of drug candidates , additional patents filed
• More hiring.
Current Timelines
Metabolic syndrome: first defined in 1998 by the WHO
Abdominal obesity
(waist circumference, men above 102 cm; women 88 cm)
Fasting triglyceride
Blood pressure
(above 1.69 mmol/L)
(above 130/85 mm Hg)
Fasting glucose
(> 6.1 mmol/L)
HDL cholesterol
(men above 1.04 mmol/L; women, 1.29 mmol/L)
Metabolic syndrome: epidemic rates
General population
> 60 years
Pathogenesis of metabolic syndrome
• Current diabetes therapies target symptoms not cause of diabetes
Anti-inflammatories in diabetes: salicylates
•The anti-diabetic effects of salicylates are the most studied of non-traditional antidiabetics
Company architecture
• Leveraging local and international
resources
Financing
• Leveraging local and international
resources
Early stage sources (local)
ENISA (1m)
CDTI (00’s K)
CDEM (00’s K)
Torres Quevedo (50% R&D employees)
Local investors (m’s)
Later stage
UK, Switzerland, France, USA
Exit
IPO (Spain, Switzerland, UK, USA)
Trade Sale (European or US companies)
Spanish resource availability: the good, the bad…
Basic science
EXCELLENT
Employees
Early stage financing
Clinical science
SAB/BOD
Late stage financing
IP
LACKING
Next steps for Genmedica
•
•
•
•
•
Continue to fund early development in Spain
Continue to build team in Spain, continue work with international CRO’s (France, India)
API chemistry will be done in Spain
Clinical studies in Germany or UK
Next financing round probably European Union or US-based
Doing Business in Spain
Toronto, 20th May 2008
International Technology Cooperation
With Spain - CANADEKA
Bill Dobson
National Research Council Canada
Director, IRAP Ontario
May 20, 2008
National Research Council Canada
Industrial Research Assistance Program
NRC- IRAP
NRC - Industrial Research
Assistance Program
Our Mandate :
Stimulate wealth creation in Canada through
technological innovation.
. Mission :
Our
Stimulate innovation in Canadian SMEs.
Our strategic objective :
Increase innovation capacity of Canadian SMEs.
NRC’s Industrial Research
Assistance Program
• In existence since 1947
• In Canada :
– Invests over $100M per year in contribution to SMEs ( less than
500 employees )
– Work with over 10,000 SMEs / year and provide funding
support to over 2,500 projects / year
The Toolbox
• Support to Firms for R&D
• Financial Support for Firms’ Technology
Development
• Financial Support to Bring New Skills to Firms
• Financial Support for Organizations Providing
Innovation Assistance to SMES
• Technology and Advisory Services
• Networking and Linkages
Firms eligible to NRCIRAP financial support
• For profit, incorporated commercial entity;
• 500 employees or less;
• Willingness and potential to improve their technological
innovation capability;
• Open to establishing a trusted relationship with NRC-IRAP;
• With a coherent business plan demonstrating required skills in
marketing, technology and management, as well as the
appropriate financial capacity to undertake the project and
exploit its results.
IRAP’s International
Partnering Goals
• Key to IRAP’s strategic planning is growing SMEs to a mid size and
ready for international technology opportunities
• We work in close collaboration with Canadian embassies and other
federal government departments
• IRAP has long supported SMEs to seek out international technology
partners
• Our support includes:
– Information and competitive intelligence on international markets
and technologies
– Host foreign SMEs and missions that visit Canada
– Funding to Canadian SMEs to carry out technology missions
– Funding to support international R & D collaboration projects
International
Partnering Approach
• Across Canada, IRAP’s Industrial Technology Advisors monitor
clients for international interests
• This results in individual SMEs visiting research institutions and
firms, or organized missions with several firms ( 5-15 SMEs )
• Increasingly, our planning involves competitive intelligence and
activities
• Support follow-up activities by Canadian SMEs to pursue
international collaborative projects
• Seek to partner with organizations in other countries with similar
mandates
CANADEKA
NRC-IRAP’s ultimate goal is to encourage
science and technology development and
commercialization by SMEs and realizes that
partnerships and agreements like the one held
with Spain’s Centre for the Development of
Industrial Technology (CDTI) will assist in
achieving this goal.
CANADEKA
• NRC-IRAP and CDTI are collaborating on a reciprocal
basis to further each other’s support of SME growth,
technology transfer and technology development for the
purpose of generating economic benefits for both Canada
and Spain.
• This agreement allows for mutual collaboration between
our countries, and is an opportunity to build greater
partnerships between Canadian and Spanish companies
as well as research institutions that continue to make
headway in all areas of innovation.
CANADEKA - CRITERIA
1. Involve at least one qualified company from each country
(Spain and Canada).
2. Be directed at developing a product, process or service having
a wide market potential.
3. Have some identified expected benefit from pursuing the
project on a cooperative basis.
4. Be directed towards the development or use of advanced
technologies.
5. Aim to secure a significant technological advance with regards
to the product, process or service concerned.
6. Clearly identify a commercial application to benefit mankind.
PROJECTS TO DATE
• 7 to date in manufacturing engineering, ICT,
bioenergy and biotechnology
• 8 in development in bioenergy, ICT, and biotech
KEY CONTACTS
In Canada
In Spain
National Coordinator
George Ortega
(204) 984-4400
george.ortega@nrc-cnrc.gc.ca
National Coordinator
Ismael Rodrigo Barco
Executive Coordinator
Bill Dobson
(416) 954-8330
bill.dobson@nrc-cnrc.gc.ca
Executive Coordinator
Jose Manuel Leceta
rodrigo_ismael@cdti.es
jmlg@cdti.es
Doing Business in Spain
Toronto, 20th May 2008