Will Spanish bureaucracy be history by 2014? by Felix A. Monberg
Thursday, June 27, 2013 @ 7:54 PM
[Author : I am a student of Politics and Economics. I have been writing professional articles for Real Estate companies regarding the Spanish economy and real estate market.]
Spain has for a long time been crippled by its bureaucracy, which has discouraged foreign and domestic investors from bringing their ideas and businesses to the economy. Entrepreneurship has been much needed as the unemployment is significantly high and the Spanish market does not offer much innovation or ambition. However, the government has agreed upon new measures that should attract entrepreneurship and increase transparency in the private sector.
With a new reform, which exclusively targets entrepreneurs, the process of starting a business will be much easier. Furthermore, in addition to improving the time it takes to establish a registered company, 1 to 3 months, the reform offers a series of tax incentives (up to 60 per cent), in order to increase efficiency. These incentives are aimed at both large corporations and individual business owners. Besides the corporative tax being deducted, in an attempt to encourage spending the government is reducing the income tax for individual entrepreneurs by 20 %, when investing in a company.
Few measures, that reflect the new reform, have already been implemented and improvements can already be seen. Since March, more than 30000 young people have registered themselves as self-employed. Between January and April, more than 27000 training and education contracts have been signed. With these changes in the Spanish business sector, hopefully, entrepreneurs will show more interest.
However, Spain will forever be reminded of their incompetent management and sloppy system, which prevented good businesses from being established. Today, the World Bank ranks Spain as being the 136th, out of 185, on the 'ease of starting a business' list. This is quite disturbing considering that Uganda is only ten places below Spain.
Despite the fact that Spain has all the key attributes necessary, in terms of geography and popularity, for an entrepreneur to start a business, they have still managed to be so inept to not create a more intelligible system that would enrich their economy with jobs and opportunities. However, as the country has hit rock bottom a sense of urgency, finally, has occurred which has provoked such reforms as this one.
The new reform will be implemented by the end of 2013. It is intended to promote internationalisation and make Spain a centre of business in Europe. With this new reform, it should take less than 24 hours to establish a business. One can only hope that the government can live up to this change in the business structure, and start welcoming more entrepreneurs and opportunities.