- Spain is ranked 28th in this ranking that measures the countries with the best business climate for SMEs
- The World Bank rewards reforms carried out since 2012 and advances in fiscal and corporate governance
Spain has improved four positions, until the 28th, in the ranking of ‘Doing Business’ that is prepared annually by the World Bank. The report tries to gather essential legal and administrative aspects that facilitate or hinder the creation and development of companies, mainly of SMEs. It is the first time, since the preparation of this indicator began in 2008, that Spain is among the 30 countries with the best business climate. It is ahead of countries such as France (31st), Holland (32nd), Switzerland (33rd), Japan (34th), Italy (46th) or Belgium (52nd). This new advance in Spain's position – it was ranked 44th in 2011 – is explained by the reforming and favorable efforts to business, production and employment that has been carried out in Spain in recent years.
Among the reforms carried out since 2012, the World Bank rewards the improvement of the corporate governance of capital companies (law 31/2014), which modernizes and improves its governance by reinforcing the role of the shareholders meeting in business decisions; the 2014 tax reform, which reduces the corporate tax rate and simplifies and facilitates compliance with tax obligations; bankruptcy reform (between 2011 and 2015), which has allowed reducing the cost and duration of bankruptcy proceedings or facilitating pre-bankruptcy mechanisms (refinancing agreements and extrajudicial payment agreements); and the improvement of the efficiency of the commercial register and the Tax Agency.
As a consequence, Spain has improved its position in several key areas or individual indices that are used to prepare the ranking. On the one hand, it highlights the rise in the indicator on obtaining electricity, with 36 positions up. It essentially obeys that this year the procedures and cost that a company must face when obtaining electricity are better collected. In turn, Spain improves the protection indicator for minority investors, with 8 positions in the ranking; in the tax payment indicator, with 3 posts, for the reduction in the percentage of benefits taxed; and in the contract compliance indicator, with 3 other positions, as a result of the reduction of the judicial costs of the execution of contracts.
‘Doing Business’ is one of the most important annual publications of the World Bank. This year's is its 15th edition. It focuses mainly on small and medium enterprises in ten key areas in the life of a business: procedures and requirements necessary for the start of the business, obtaining construction permits, those necessary for access to electricity supply, those related to the registration of ownership, access to credit, protection of minority shareholders, payment of taxes, cross-border trade, judicial resolution of discrepancies between the parties to a contract, and suspension of payments or bankruptcy of the company.
The World Bank's choice of the respective indices has been based on the analysis of its effects on innovation, productivity, growth and employment, as well as on the ability to make objective observations of its characteristics. For example, in each of these areas the time, procedures and cost incurred by a typical company are quantified to get what you need for your activity. In short, the choice of indicators is based on the impact that legal certainty, simplicity and transparency of regulations have on economic activity. Labor regulations are also monitored, but this aspect is not included in the global index.
In these ten areas, what is called "Distance to the Border" is measured, which measures the distance in each indicator to the country with the best performance in each index. On the basis of the ten individual indices a global classification of the business climate of the 190 countries for which the research is conducted is made.
This ranking is about influencing countries to adopt reforms that facilitate innovation, productivity and employment, while a signal is sent to investors about the context conditions related to investment projects. The analysis is carried out, for each country, based on the study of the regulations, but it is also taken into account to what extent this regulation is reflected in business practice.