When considering expanding or investing in a new country, there are multiple factors to take into account – including tax burdens, bureaucracy, location, culture, and more. In this case, if a UK company were to choose Spain over Portugal for investment, despite facing higher tax burdens and bureaucracy, they might have done so for several reasons:

1. Access to the European Union: Spain is a member of the European Union, providing UK businesses with a gateway into the largest single market in the world. This offers the opportunity to expand their customer base, collaborate with other European companies, and access funding and grants that are available through EU programs.

2. Established business network: Spain has a strong business network with a lot of opportunities for collaboration and partnerships. Additionally, the country has a skilled workforce that offers excellent opportunities to attract potential employees.

3. Stable and developed economy: Spain is the fourth largest economy in the eurozone and its economy has been growing steadily in recent years. This offers a stable and developed business environment for UK businesses to invest.

4. Strong infrastructure and logistics: Spain has well-developed infrastructure and logistics that provide UK companies with easy access to markets in Europe, Latin America, and North Africa.

5. Attractive lifestyle: Spain is a popular destination for British expatriates, offering a warm and relaxed lifestyle, affordable real estate, quality healthcare, and access to excellent amenities such as schools and universities.

While businesses may face higher tax burdens and bureaucracy in Spain compared to neighboring countries such as Portugal, these factors may be outweighed by the benefits of being in Spain. Ultimately, the decision to invest in Spain should be based on a comprehensive assessment of all relevant factors, taking into account the individual needs and goals of the specific business.