Madrid welcomes more than half of the firms that have fled from Catalonia since 1-O
The illegal referendum of October 1, 2017 in Catalonia reconsidered thousands of companies their permanence in the region after the worst fears were fulfilled, after years of resisting believing that the procés would cross the red lines. The escape plans of many of them then accelerated, and the community with the greatest contribution to the Spanish GDP began a descent into hell that, although it begins to subside in its virulence, continues to unravel the regional economy. Since then, in net terms -relation between companies that have left and have arrived in the region from other communities-, 4,680 companies have abandoned Catalonia.
Catalonia as the region that contributes the most to Gross Domestic Product (GDP), with 19.3% of the total, compared to 19% in the Catalan region during 2019. Part of this ‘sorpasso’ has been thanks to the number of companies that have moved their headquarters to Madrid since 1-O. Among them, large listed companies such as Naturgy, Colonial and Cellnex, but also of all sizes. In fact, with the data at the end of 2021, of the 7,444 companies that have left Catalonia in the last five years, 3,777 have done so to settle in the capital. In other words, more than half of the escaped companies have sought shelter in Madrid since 2017, according to statistics provided by the College of Registrars. Conversely, in the last five years, 1,413 companies with headquarters in Madrid have moved to Catalonia, just over a third in relation.
The bleeding was more noticeable in the first bars after the illegal referendum. In 2017 and 2018, 2,745 of the 4,895 companies that left Catalonia chose Madrid as their center of operations. In recent years the statistics had vanished both towards the capital and towards the rest of the regions. Thus, in 2019, 948 companies left Catalonia (349 to Madrid) and in 2020, the year the pandemic broke out, 666 (309 to the capital). Although it should be noted that many of these moves between communities were stopped during that year due to the administrative break of the health crisis. In 2021, with the relaxation of restrictions and the reactivation of the economy, 935 companies left Catalonia, out of the 609 that arrived, which left a loss of 326 firms, the region that gave up the most companies. While in the last year Madrid has won 388, becoming one more year the one that attracted the most companies from other regions of Spain.
In 2021, in addition to the capital region, Baleares (83), Valencian Community (78), Galicia (68), Andalusia (29), Aragon (11), Canary Islands (10), Cantabria (8), Navarra (6) and Asturias (1) received more companies from other parts of the Spanish geography, compared to those that left. Those that followed Catalonia in net loss of removals were Castile and Leon (-60), Murcia (-49), Basque Country (-27), The Rioja (-13), Estremadura (-8), Castile and La Mancha (-5) and Ceuta and melilla (-1).
pole of attraction
But the truth is that the success of Madrid is not only due to the debacle of the procés. Thus, the community of Madrid has also become a pole of attraction for companies from all communities due to its low-tax policies and economic freedom. In the last five years, nearly 10,000 firms have settled in the capital from other communities. Or what is the same, Madrid has registered in its favor more than a third of the 27,238 transfers of headquarters between communities since 2017.
By contrast, 6,791 firms have left Madrid since 2017. Therefore, in net terms, the capital has gained 2,916 companies in the last five years. With these numbers, economists and businessmen have coincided on multiple occasions in praising the economic management of the community. Particularly proud are the Madrid managers, who believe that the region’s achievements are due to more than its fiscal laxity. “Madrid is a place with magnificent infrastructures, in addition to having a great concentration of talent, in a context where there is a shortage of qualified human resources for technology,” the president of thethe Business Confederation of Madrid-CEOE (CEIM), Miguel Garrido. Although he admits that the “non-abusive” tax pressure is the main factor of attraction for Madrid.
But the government has a plan to “even the game board.” The Treasury experts are currently finalizing their tax reform proposal, which will include the harmonization of state taxes assigned to the autonomous communities, such as those of Patrimony, Inheritance and Donations.
“I hope that doesn’t happen. They are policies that collide with reality and common sense, when precisely progress is being made towards a greater transfer of certain powers to the autonomous communities. Suddenly taking the opposite step and reducing the fiscal autonomy of the communities seems like a contradiction,” laments Garrido, who believes that the regulatory change could cause damage to the Spanish economy as a whole. “It will make Spain less attractive, because today the competition to attract companies is not between regions, but between countries,” he adds.