Poor training, labor legislation, and taxation: The main obstacles to business development in Spain, according to the World Bank.

 

The Spanish business community is facing significant headwinds that are hampering its full development and competitiveness. A comprehensive study of the World Bank, «Enterprise Survey Spain 2024», has shown that the inadequate staff training is the main concern for 35% of the companies surveyed. Closely followed by Labor legislation, identified by 18% as a significant obstacle, and the taxation, which represents a brake for 15,9% of those surveyed.

 

The report, which is based on 1.431 face-to-face interviews with executives and managers of companies from various sectors and sizes throughout the country, had the collaboration of the Chamber of Spain for the collection of information.

 

Norman Loayza, director of the World Bank's Global Indicators Group, underscored the importance of this type of assessment: “For the economy to grow sustainably, it is essential that the business environment be conducive to investment, innovation, and competition. And to create this environment, we must listen to the voices of entrepreneurs—small and large, emerging and established—and address their concerns and needs. The entire society benefits from their continued work and creativity.”

 

In the same line, Cristina Herrero, president of the Independent Authority for Fiscal Responsibility (AIReF), highlighted the value of data as a fundamental tool for understanding the environment in which companies operate. “This survey shows that companies are still facing difficulties in developing their activities: it is time to draw conclusions and implement solutions,” stated Herrero. She added that “the Spanish economy is facing challenges in terms of growth patterns and productivity growth,” and that global uncertainty due to protectionism requires “comprehensive planning and strategy that addresses these challenges in terms of efficiency and productivity.”

 

Joseph Louis Bonet, president of the Spanish Chamber of Commerce, emphasized the importance of thoroughly understanding the business ecosystem. “In a social market economy like Spain's, businesses are key to stability, sustained wealth creation, and social progress. Therefore, it is essential to foster a regulatory environment that encourages and strengthens, rather than hinders, productive activity,” he noted. For Bonet, “the ultimate conclusion is that businesses often suffer from an administrative and regulatory burden that represents additional costs, hinders the normal functioning of their business, and hampers their competitiveness.”

 

Regulatory Burden and Other Challenges

 

During the presentation, a round table moderated by Isabel Puig, president of the SME Commission of the Chamber of Spain, and with the participation of figures such as Roman Arjona (European Commission), Juan Francisco Jimeno (Productivity Council) and Inmaculada Riera (Spanish Chamber of Commerce) emphasized the need to generate reliable data to boost productivity and design effective public policies.

 

The study reveals that the regulatory burden This remains a considerable burden. Spanish managers spend an average of 10,5% of their time complying with regulatory requirements, a figure higher than the average of 8% recorded in Europe and Central Asia.

 

With regards to obtaining permits and licensesSpain presents a mixed picture. Obtaining an import license takes 20 days (compared to 19 in Europe and Central Asia), and a business license requires 66 days (compared to 41 in Europe and Central Asia and 51 in high-income economies). However, the processing time for construction permits (84 days) is more favorable than in other regions.

 

The report also addresses the submerged economy26% of Spanish companies say they compete with unregistered businesses, slightly below the average of 28% in Europe, Central Asia and high-income economies. It is noteworthy that 95% of companies in Spain were formally registered at the start of operations.

 

In terms of corruptionSpain presents a remarkably low result: only 0,4% of companies reported having received "at least one request for bribe payment", in contrast to 6% in Europe and Central Asia and 4% in high-income economies.

 

Recommendations to Boost Growth

 

Given this situation, the Spanish Chamber of Deputies has proposed a series of urgent recommendations. They insist on the need to align training paths with the real demands of companies, modernize active employment policies, and streamline administrative procedures to reduce recruitment costs. They also advocate improving the effectiveness of passive policies by encouraging active job search.

 

To strengthen the productive fabric, the Chamber suggests structural measures such as reduction of social contributions, the simplification of corporate tax, the reduction of administrative burdens and the elimination of certain regulatory thresholds. They consider these actions essential to stimulate growth, transformation, entrepreneurship, and job creation in a context of technological disruption and demographic change.