Starting a Business: Spain the World's 3rd Worst

Knowing a Harley Street practitioner friend was in the process of opening a new business near Torrevieja, I enquired as to the delay. She told me she was still battling bureaucracy and waiting for a licence and asked if I had seen the report on a business survey; it cited Spain as the third worst country in the world for opening a business.

No wonder its economy is in a mess, I doubt the Germans would suffer them lightly if asked for a hand-out. I recall reading that you can set up a government approved business online in Estonia in a few minutes. In hour. In Spain the process can take three years.

Needless to say, the economies of the Baltic States are some of Europe’s most successful. Yet, anyone over the age of 33-year in these nations was educated under an anti-market Communist system. The same generation is running rings around Spain which shrugged off (supposedly) state capitalism much earlier. I like Spain but this does not mean I have to heap praise on its warts.

Hi Mike

I have never heard of a company taking three years to get started, if a license has taken more than three years to get it is probably because it doesn't comply with regulations or has entered into what they call "administrative silence" meaning if they take more than 6 months to turn down the licence it is granted by default. I am aware of this within the Restaurant/leisure trade however with medical practitioners I have no idea... but the law is the law unless there is someone trying to delay the license to avoid competition, which isn't unheard.

As far as setting upa  company, I agree it can be a pain and far more costly than other countries but you should have a limited compnay registered in approx 30 - 45 days. It's not fast by any means, especially compared to the UK and others where it can be up and running in the same day, but then VAT applications can take much longer too. With a Spanish SL, you are automatically registered for IVA as there is virtually nothing that doesn't carry IVA here!

It could be much better and much cheaper to set up here in Spain, you need approx 800 - 900 euros for administrative costs and 3000euros in share capital to start a limited company, obstacles that stop many ligitimate projects from going ahead, or force people to find alternative routes through Socidedades Civiles or Communidades de Bienes which do not have limited liability but are much cheaper to set up.

Moe importantly there are no tax relief programmes fro new companies something that Spain really needs to consider if it want to reduce its black economy and boost entreprenuers.

BTW I had no idea it was the third worst country to set up a company, what is it measured on? Financing capability? bureaucracy? Cost? Time? or all of them?!

Ian

Hi Ian, thanks for courtesy of informed reply. The three years story came from a press cutting sent to me awhile ago. By the University of Marbella. Yes, it was such a prolonged affair that it was a media talking point, not an isolated case. I know many topics polarise opinion. I know too that the slightest criticism of the Spanish ‘holy cow’ risks the ‘f*** off back to the UK’ rhetoric. We have to accept Spain uncomplainingly.

The 3rd worst accolade was the conclusion of the Global Entrepreneurship Monitor. This was published in The Coastrider No 490 July 23. It appears 139 countries were surveyed, Spain was 136 in difficulties encountered in starting up a new business. It ranked 44th on World Bank’s Ease of Doing Business Index… not good. - Mike

This message was last edited by mike_walsh on 30/07/2013.

What was it then, a friend that told you, or from a newspaper cutting sent to you?