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Doing Business in Spain

The World Bank conducts a survey on Doing Business in the world every year. The survey reviews what economic environments are more prone to conducting business and ranks them according to a handful of criteria. The 2009 rankings include 181 nations. Spain worsened its standings from 46 in 2008 to 49 in 2009.

The first five spots from best to worse are held by Singapore, New Zealand, the United States, Hong Kong and Denmark. The bottom five spots are held from best to worse by Burundi, Republic of Congo, Guinea-Bissau, Central African Republic and Democratic Repubic of Congo. A summary of the 2009 results was recently released by the World Bank. The conclusions reviewed hereafter correspond to the 2008 results.

In a previous article on 5spaniards I related Transparency and Corruption to Foreign Direct Investment. The same conclusion can apply to the business environment. Spain’s standings in the international rankings are mediocre and point out the direction that reform should adopt going forward. In particular the World Bank provides the following data related to the requiremens entrepreneurs face in Spain when opening a business:

STARTING A BUSINESS

-    Takes 10 procedures

-    Takes 47 days

-    Costs 15.1% of the per-capita income

-    Requires 13.7% of the per-capita income as the minimum capital required

DEALING WITH LICENSES

-    Takes 11 procedures

-    Takes 233 days

-    Costs 64.9% of the per-capita income

EMPLOYING WORKERS

-    Difficult of hiring index (0-100): 78

-    Rigidity of hours index (0-100): 60

-    Difficulty of firing index (0-100): 30

-    Rigidity of employment index (0-100): 33

-    Firing cost (weeks of salary): 56

REGISTERING PROPERTY

-    Porcedures: 4

-    Time (days): 18

-    Cost (% o property value): 7.1

GETTING CREDIT

-    Strength of legal rights index (0-10): 6

-    Depth of credit information index (0-6): 6

-    Public registry coverage (% of adults): 44.9

-    Private bureau coverage (% of adults): 8.3

PROTECTING INVESTORS

-    Extent of disclosure index (0.1-): 5

-    Extent of director liability index (0-10): 6

-    Ease of shareholder suits index (0-10): 4

-    Strength of investor protection index (0.10): 5.0

PAYING TAXES

-    Payments (numer per year): 8

-    Time (hours per year): 298

-    Total tax rate (% profit): 62.0

TRADING ACROSS BORDERS

-    Documents to export: 6

-    Time to export (days): 9

-    Cost to export (US$ per container): 1,000

-    Documents to import (number): 8

-    Time to import (days): 8

-    Cost to import (US$ per container): 1,336

ENFORCING CONTRACTS

-    Procedures (number): 39

-    Time (days) 525

-    Ost (% of claim): 17.2

CLOSING A BUSINESS

-    Time (years): 1.0

-    Cost (% of estate): 15

-    Recovery rate (cents on the dollar): 76.9

A second article on Doing Business in Spain will review the conclusions of the 2008 report and provide useful commentary on the conclusions drawn by the World Bank.


Originally published at 5spaniards.com on Oct 19, 2008 and reproduced here with the author’s permission.

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