Building a Spanish Silicon Valley

Living and working on the Costa del Sol has many advantages, not least 300 days of sunshine a year. The overall lifestyle is very different, in the Winter you can snow ski in the Sierra Nevadas above Granada and jet or water ski in the Mediterranean in the afternoon. The availability of fresh fruit and vegetables and the food miles they travel is far less than most places with a very short time from field to table as well.

Driving around the Costa del Sol, actually looks a lot like driving around Silicon Valley in California, even a lot of the place names are the same, to be clear California got the names from countries like Spain, not the other way round.

Back in 1992 the City of Malaga and the Junta de Andalucia started the tech park just to the north of Malaga next to the airport. Since then many companies have opened up offices in and around the tech park and the local area, once such company is VirusTotal, found in 2004 and acquired by google in 2012. Many internationally recognized companies now have offices, such as Oracle and Accenture.

Part of that is connectivity, Malaga airport is literally 20 minutes from the Tech Park. Malaga airport has as much runway capacity as London Heathrow, with none of the restrictions around flight times and is currently at 20% of the volume that goes thru' Heathrow. Another part of connectivity is internet connectivity, I wrote about this several months ago.

Most recently a number of existing and new companies have announced significant investment into the Malaga area, google announced the creation of a Cyber Security centre. Followed in January 2023 by Oracle are both examples of existing companies, with AES being the most recent new arrival.

In the Autumn of 2022, direct flights from Malaga were announced, technically it was a resumption, United announced three times a week flights to Newark airport in New York and just this last week the first tickets went on sale.

Spain provides lots of incentives now for people to come and work in Spain, historically Spain had the Beckham Law, named after a certain footballer and essentially means if you haven't worked in Spain are not a Spanish citizen and have a job to come to you can move to Spain and earn upto 600K/year and pay only 24% tax.

Spain also has the concept of Autonomo aka self-employed, for those that are familiar with IR35 in the UK it is a far more friendly version of that to actively encourage people. The what you can deduct is more expansive and the contributions you need to make to the social security system incentivize you by offering reduced contributions over the first two years.

Finally Spain recently announced incentives for startup companies and the Digital Nomad visa. The Startup Law again offers incentives to companies it has been estimated that the Startup ecosystem in Spain is worth €46B and the law is designed to support this and future growth. The details are all here.

Spain also has the Digital Nomad visa which is essentially designed for people who want to work for a foreign company whilst based in Spain. The tax model for Digital Nomads is based on the 24% for the first 600K/year in the Beckham Law.

If you want to learn more about living and working on the Costa I'd strongly recommend a read of this blog. I'd essentially end up repeating a lot of stuff that is here.

A Bonfire of Common Sense

One of the many things I've discovered about living outside the UK is that the BBC is not the news organisation that many believe it is and definitely does not deliver the impartial view of the world that everyone thinks it does.

We are fortunate to have frankly channels from more countries than you can possibly watch in a lifetime but when you watch them you get a very different perspective on world events. There seems to be a prevailing view that the BBC has got more like a Tory mouthpiece of recent years (surely that can't have anything to do with the appointment of the new Chairman being a mate of Boris'?).

Anyway that aside it is fair to say that the rest of the EU has long since moved on since Brexit and is very focused on growing the collective economy, sadly the UK is still stuck in that post Brexit rut. Inflation for example is already falling far more sharply in the EU than in the UK, both at a country and as a trading bloc level, growth is going to exceed expectations from the likes of the IMF in 2023 for all G7 countries, except the UK.

Just look at the issues in the UK, most economists say that Brexit is having at least a negative 4% impact on UK growth, the UK economy is the only G7 economy not to be back where it was pre-pandemic plus it'll be the only G7 economy to show negative growth in 2023. Even the Russian economy, despite sanctions will grow in 2023! In fact it is expected to be the slowest growing G7 economy for the next two years!

Why does the UK media like the BBC not lay out these stark facts to the British public? The cost of living crisis in the UK is beyond any joke and it is currently experiencing a "Winter of Discontent" and we all know how the last one of those ended. Then this morning you have stories of energy suppliers actually breaking into homes of vulnerable people to install pre-payment meters, whilst the government and the regulator stand by on a problem that has been know about for years? Why? Because these are the same people that bankroll the corruption in Downing Street.

Then of course the UK has this sunset clause for some 4000+ pieces of EU legislation that it plans to repeal by default on the December 31st 2023, that assumes of course they can actually find them all 🤣. The monetary cost alone of doing this both on the Civil Service and in legislative time is something the UK cannot afford or even achieve in the time. The UK was one of the countries that voted for this legislation and saw real value in it, like consumer and employee protection, data protection, security, anti-money laundering and fraud, the list of laws that will just expire is beyond comprehension and most people resident in the UK have no understanding of the consequences to daily life, why because mainstream media makes no attempt to explain this people. The governments solution is to use the so called Henry VIII clause which allows the government to make decisions on legislation without recourse to parliament, seems like the mother of Parliaments has just got a divorce from the Government.

For those who are employees the impact of the change should be particularly concerning as a long time friend and former colleague of mine posted a few weeks ago here.

The UK Government's excuse in all of this is it is all down to wider economic factors aka The War in Ukraine. If Brexit and the Tory economic policies were such a great decision then the UK should be outperforming the EU as a trading bloc inspite of wider economic factors, reality is Brexit was suicide, the EU has moved on and the UK population is paying a price, sadly no political party, no even The Liberal Democrats is saying rejoin is the right answer. Sir Ed Davey on GMB this morning when pushed multiple times on this, despite it being LD policy refused to say he wanted the UK to rejoin. 

The sad reality is the best the UK can hope for in the short term is closer ties with the worlds largest trading bloc, but that won't happen until the blinkered idiots in the Tory party and to some extent the other parties actually move on. It is not just about trade it is about co-operation on many topics such as security and finance. Reality is a see change in UK politics is required which requires my childrens generation, born in the 80s and 90s at the end of the last century and later who have only ever known the UK in the EU get into politics and change things. A lot of the generation that voted leave have departed this world and left a car crash behind them. Those still around like Truss, Johnson and Sunak having got the guts to admit the reality.

Maybe the UK will benefit from Brexit in 50 years time as JRM says, but by rejoining the EU...