- Spain moves to 28th place in this classification that measures the countries with the best business climate for SMEs
- The World Bank rewards the reforms carried out since 2012 and the advances in fiscal and corporate governance matters
Spain has improved four places, up to 28th, in the ‘Doing Business’ ranking prepared annually by the World Bank. The report tries to include essential legal and administrative aspects that facilitate or hinder the creation and development of companies, mainly SMEs. It is the first time since the development 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 44 in 2011 – is explained by the reform effort and favorable 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 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 out-of-court payment agreements); and improving the efficiency of the commercial registry and the Tax Agency.
As a consequence, Spain has improved its position in several key areas or individual indices that are used to compile the ranking. On the one hand, the rise in the indicator on obtaining electricity stands out, with 36 positions above. It is essentially due to the fact that this year the procedures and cost that a company must face when obtaining electricity are better collected. In turn, Spain improves in the minority investor protection indicator, with 8 positions in the ranking; in the tax payment indicator, with 3 positions, for the reduction in the percentage of taxed benefits; and in the contract fulfillment indicator, with 3 other positions, as a consequence 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 mainly focuses on small and medium-sized companies in ten key areas in the life of a business: procedures and requirements necessary to start the business, obtaining construction permits, those necessary for access to electricity supply, those related to the registration of property, 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 their effects on innovation, productivity, growth and employment, as well as on the ability to make objective observations of their characteristics. For example, in each of these areas, the time, procedures and cost of a typical company to get what it needs for its activity are quantified. In short, the choice of indicators is based on the impact that legal certainty, simplicity and transparency of the 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. Based on 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 seeks to influence countries to adopt reforms that facilitate innovation, productivity and employment, while sending a signal to investors about the contextual conditions related to investment projects. The analysis is carried out, for each country, based on the study of the regulations, but also takes into account to what extent said regulations are reflected in business practice.