Spain through the looking glass

Birth pains

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Opening a business in Spain continues to be a real headache.

The new IFC/World Bank Doing Business 2013 report has Spain in 136th place among 185 countries surveyed in terms of how easy it is to get an enterprise up and running. That’s a drop of 2 places since last year and means Spain is now part of a select group that includes the Dominican Republic, Fiji and Brunei.

By contrast, neighbouring Portugal comes 31st in the rankings for ease of starting a business, while Italy holds the 81st spot and the regional (high income OECD) average is 61.

This ranking of 136 is a particularly disappointing one for Spain given there has actually been a worldwide upswing in the straightforwardness of starting a new business from scratch. Average time frames have dropped from 50 to 30 days since 2005.

In Spain, it takes an average 28 days to sign off on all the legal and bureaucratic steps involved in kick-starting a business. But while this is a long way down from the astonishing 114 days needed back in 2004 and 2005, the latest Doing Business report has given Spain a thumbs down on the reform front. Although changes brought in last year have trimmed procedural costs and lowered minimum capital requirements, progress has been slow.

Opening a business in Madrid still involves 10 distinct procedures – the same number as a decade ago – and continues to involve a lot of toing and froing between government offices. Spaniards know this too: a recent survey by the country’s Centro de Investigacions Sociogicas (CIS) revealed that 81.1 per cent of people believe it is difficult to set up an enterprise here, with 48.8 per cent of those respondents listing red tape as one of the top two obstacles in the process.

The World Bank/IFC Doing Business Report looks at how easy it is to do business in any given country by taking into account 11 factors including dealing with construction permits, getting credit and enforcing contracts, among others. The ease of both opening and closing businesses is also in the mix.

Overall, Spain ranks 44th for doing business, down from position 42 in 2012. The areas where Spain ranks best are ease of resolving insolvency (20th place) and paying taxes (34th spot). The poorest performing indicators, apart from staring a business, are the simplicity of getting electricity (70th in the rankings) and protecting investors (100th position).


Written by georgemills25

October 26, 2012 at 09:41

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