Economy Profile of Spain

Ease of Doing Business Ranking – Spain

Rankings on Doing Business topics – Spain

Topic Scores

Starting a Business

This topic measures the number of procedures, time, cost and paid-in minimum capital requirement for a small- to medium-sized limited liability company to start up and formally operate in each economy’s largest business city.

To make the data comparable across 190 economies, Doing Business uses a standardized business that is 100% domestically owned, has start-up capital equivalent to 10 times the income per capita, engages in general industrial or commercial activities and employs between 10 and 50 people one month after the commencement of operations, all of whom are domestic nationals. Starting a Business considers two types of local limited liability companies that are identical in all aspects, except that one company is owned by 5 married women and the other by 5 married men. The ranking of economies on the ease of starting a business is determined by sorting their scores for starting a business. These scores are the simple average of the scores for each of the component indicators.

The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.

What the indicators measure

Procedures to legally start and formally operate a company (number)

• Preregistration (for example, name verification or reservation, notarization)

• Registration in the economy’s largest business city

• Postregistration (for example, social security registration, company seal)

• Obtaining approval from spouse to start a business or to leave the home to register the company

• Obtaining any gender specific document for company registration and operation or national identification card

Time required to complete each procedure (calendar days)

• Does not include time spent gathering information

• Each procedure starts on a separate day (2 procedures cannot start on the same day)

• Procedures fully completed online are recorded as ½ day

• Procedure is considered completed once final document is received

• No prior contact with officials

Cost required to complete each procedure (% of income per capita)

• Official costs only, no bribes

• No professional fees unless services required by law or commonly used in practice

  Paid-in minimum capital (% of income per capita)

• Funds deposited in a bank or with third party before registration or up to 3 months after incorporation

To make the data comparable across economies, several assumptions about the business and the procedures are used. It is assumed that any required information is readily available and that the entrepreneur will pay no bribes.

The business:

-Is a limited liability company (or its legal equivalent). If there is more than one type of limited liability company in the economy, the limited liability form most common among domestic firms is chosen. Information on the most common form is obtained from incorporation lawyers or the statistical office.

-Operates in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.

-Performs general industrial or commercial activities such as the production or sale to the public of goods or services. The business does not perform foreign trade activities and does not handle products subject to a special tax regime, for example, liquor or tobacco. It is not using heavily polluting production processes.

-Does not qualify for investment incentives or any special benefits.

-Is 100% domestically owned.

-Has five business owners, none of whom is a legal entity. One business owner holds 30% of the company shares, two owners have 20% of shares each, and two owners have 15% of shares each.

-Is managed by one local director.

-Has between 10 and 50 employees one month after the commencement of operations, all of them domestic nationals.

-Has start-up capital of 10 times income per capita.

-Has an estimated turnover of at least 100 times income per capita.

-Leases the commercial plant or offices and is not a proprietor of real estate.

-Has an annual lease for the office space equivalent to one income per capita.

-Is in an office space of approximately 929 square meters (10,000 square feet).

-Has a company deed that is 10 pages long.

The owners:

-Have reached the legal age of majority and are capable of making decisions as an adult. If there is no legal age of majority, they are assumed to be 30 years old.

-Are in good health and have no criminal record.

-Are married, the marriage is monogamous and registered with the authorities.

-Where the answer differs according to the legal system applicable to the woman or man in question (as may be the case in economies where there is legal plurality), the answer used will be the one that applies to the majority of the population.

Standardized Company

Legal form Sociedad de responsabilidad limitada (SRL) -Limited Liability Company

Starting a Business – Spain

Figure – Starting a Business in Spain – Score

Figure – Starting a Business in Spain and comparator economies – Ranking and Score

Note: The ranking of economies on the ease of starting a business is determined by sorting their scores for starting a business. These scores are the simple average of the scores for each of the component indicators.

Figure – Starting a Business in Spain – Procedure, Time and Cost

* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.

Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (https://doingbusiness.org/en/methodology). For details on the procedures reflected here, see the summary below.

Details – Starting a Business in Spain – Procedure, Time and Cost

1 Obtain a certificate of availability for the proposed company name (certificación negativa de la denominación social)

Agency : Mercantile Registry

To register a company, entrepreneurs can choose between obtaining a certificate of availability of the company name or selecting a name from a list of approved names (Bolsa de denominaciones). Most companies are registered with a previous certificate.

2 days

EUR 13.52 (excluding

VAT)

The certificate of availability of the company name is typically requested through the website of the Central Commercial Registry: https://www.rmc.es/privado/CertificacionesDenominaciones.aspx. The company can choose between obtain the certificate in person at the Registry, receive it by email or received it electronically (with the electronic signature of the register). The Registry will issue and deliver the certificate within the next 48 hours.

This procedure can also be requested through the Help Desk for Entrepreneurs (Puntos de Atención al Emprendedor, PAE) or through the notary online system SIGNO.

Once the Registry issues the certificate, the requested corporate name will be reserved for a maximum of 6 months from the certificate's date of issuance. Each certificate is valid for 3 months from its date of issuance. Furthermore, once the certificate's validity has expired (3 months), the certificate can only be renewed once, after which a new certificate must be requested.

2 Open a company bank account and deposit capital

Agency : Bank

In most cases, the entrepreneur deposits the amount of the contributions directly in the bank. The contributions can also be directly given to the public notary at the time of granting the deed of incorporation. In this scenario, the notary can deposit them in the company's bank account.

3 File the Single Electronic Document (Documento Único Electrónico – DUE) and make an appointment with a notary

Agency : Help Desk for Entrepreneurs (PAE)

Prior incorporation, the entrepreneur completes a single registration form (DUE) through the online system CIRCE that is then sent to the notary's office, the commercial registry, the tax agency and the social security agency to obtain the company contribution number (Codigo de Cuenta de Cotizacion, CCC) and to register the employees.

1 day

no charge

The single registration form can be filed at any Help Desk for Entrepreneurs (Puntos de Atención al Emprendedor – PAE) or online by the entrepreneur, in which case a digital signature is required. Once the DUE is sent, an appointment request is generated with the notary chosen for the

preparation of the public deed of incorporation.

The law No. 14/2013 of Entrepreneurship support established that is not necessary to justify the deposit of the share capital if the shareholders express in the public deed that they will respond jointly and severally in front of the company and its creditors.

1 day no charge

The corresponding autonomous community must be notified within the first 30 days of the start of activities and the opening of the workplace. Every autonomous community has its own form.

Some require that work injury and safety documentation (corresponding to the specific business or workplace in question) be filed along with the forms. Other forms and documents might be needed depending on the workplace activities.

Business founders can notify the Ministry of Labor and Industry online through the CIRCE platform.

simultaneous with previous procedure)

Dealing with Construction Permits

This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required notifications, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional certification requirements. The most recent round of data collection was completed in May 2019. See the methodology for more information

What the indicators measure

Procedures to legally build a warehouse (number)

• Submitting all relevant documents and obtaining all necessary clearances, licenses, permits and certificates

• Submitting all required notifications and receiving all necessary inspections

• Obtaining utility connections for water and sewerage

• Registering and selling the warehouse after its completion

Time required to complete each procedure (calendar days)

• Does not include time spent gathering information

• Each procedure starts on a separate day—though procedures that can be fully completed online are an exception to this rule

• Procedure is considered completed once final document is received

• No prior contact with officials

Cost required to complete each procedure (% of income per capita)

• Official costs only, no bribes

  Building quality control index (0-15)

• Quality of building regulations (0-2)

• Quality control before construction (0-1)

• Quality control during construction (0-3)

• Quality control after construction (0-3)

• Liability and insurance regimes (0-2)

• Professional certifications (0-4)

To make the data comparable across economies, several assumptions about the construction company, the warehouse project and the utility connections are used.

The construction company (BuildCo):

• Is a limited liability company (or its legal equivalent) and operates in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.

• Is 100% domestically and privately owned; has five owners, none of whom is a legal entity. Has a licensed architect and a licensed engineer, both registered with the local association of architects or engineers. BuildCo is not assumed to have any other employees who are technical or licensed experts, such as geological or topographical experts.

• Owns the land on which the warehouse will be built and will sell the warehouse upon its completion.

The warehouse:

• Will be used for general storage activities, such as storage of books or stationery.

• Will have two stories, both above ground, with a total constructed area of approximately 1,300.6 square meters (14,000 square feet). Each floor will be 3 meters (9 feet, 10 inches) high and will be located on a land plot of approximately 929 square meters (10,000 square feet) that is 100% owned by BuildCo, and the warehouse is valued at 50 times income per capita.

• Will have complete architectural and technical plans prepared by a licensed architect. If preparation of the plans requires such steps as obtaining further documentation or getting prior approvals from external agencies, these are counted as procedures.

• Will take 30 weeks to construct (excluding all delays due to administrative and regulatory requirements).

The water and sewerage connections:

• Will be 150 meters (492 feet) from the existing water source and sewer tap. If there is no water delivery infrastructure in the economy, a borehole will be dug. If there is no sewerage infrastructure, a septic tank in the smallest size available will be installed or built.

• Will have an average water use of 662 liters (175 gallons) a day and an average wastewater flow of 568 liters (150 gallons) a day. Will have a peak water use of 1,325 liters (350 gallons) a day and a peak wastewater flow of 1,136 liters (300 gallons) a day.

• Will have a constant level of water demand and wastewater flow throughout the year; will be 1 inch in diameter for the water connection and 4 inches in diameter for the sewerage connection.

Dealing with Construction Permits – Spain

Figure – Dealing with Construction Permits in Spain – Score

Figure – Dealing with Construction Permits in Spain and comparator economies – Ranking and Score

DB 2020 Dealing with Construction Permits Score

Note: The ranking of economies on the ease of dealing with construction permits is determined by sorting their scores for dealing with construction permits. These scores are the simple average of the scores for each of the component indicators.

Figure – Dealing with Construction Permits in Spain – Procedure, Time and Cost

* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.

Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (https://doingbusiness.org/en/methodology). For details on the procedures reflected here, see the summary below.

Figure – Dealing with Construction Permits in Spain and comparator economies – Measure of Quality

Details – Dealing with Construction Permits in Spain – Procedure, Time and Cost

1 Obtain results of geotechnical study / soil test

Agency : Private licensed company

A soil study is a requirement before construction specified in the Building Code (Ley 38/1999-Art. 3 & 7) and the Technical Building Code (Real Decreto 314/2006-Annex I-Section 2.1). Contractors ask for a soil test to ensure that the foundation of the building is solid. The engineer must understand the suitability of the soil for the proposed construction work. It allows to build a solid foundation and avoid structures to be damaged, collapsed or leaned.

2 Request and obtain the official alignment (alineamiento oficial)

Agency : Municipality of Madrid

The certificate of alignment is issued by the Municipality of Madrid which provides the exact limit of the private property with respect to public roads.

17 days EUR 1,875

14 days EUR 186

3 Obtain results of topographical study

Agency : Private licensed company

A topographical study is conducted prior to construction to measure the levels on the specific terrain. It is a general technical requirement when building a structure of this class. This procedure is required by Codigo Tecnico de Edificacion (March 2006) as part of the Basic Project to be presented.

4 Obtain approval of draft project proposal and implementation plan (Visado del proyecto básico y proyecto de ejecución) from College of Architects of Madrid

Agency : College of Architects of Madrid

The College of Architects of Madrid must approves BuildCo’s draft project proposal and implementation plan. In particular, the College of Architects of Madrid verifies the professional qualifications of the individual in charge of the construction work and validates the correctness and completeness of the documentation provided for the project with respect to regulations.

The following documentation must be provided:

-report on the project

-implementation plan

-administrative and technical conditions’ statement

-measurements

-budget

-health and safety study

The procedure is legislated in "Real Decreto 1000/2010 "sobre visado colegial obligatorio".

7 days EUR 800

3 days EUR 1,155

5 Request and obtain a building permit (licencia de obras)

Agency : Municipality of Madrid

The documents required to obtain the license are the following:

• A standardized application form and sheet containing the characteristics of the construction properly completed
• Proof of payment of tax
• Declaration by one or more technical authors (architect and project design specialists) that the project conforms to the appropriate town planning regulations, and certificate of the structural feasibility, if necessary
• Declaration of the promoter that a signboard has been posted at the site to inform the public that a building license has been applied for and to provide information about the proposed operations and activities
• Three copies of the technical project designs signed by qualified technician(s) and countersigned by the appropriate official institute (or in this case, by the project’s administrative supervision office, accompanied by the application sheets of the appropriate professional association)
• Confirmation of the deposit of a guarantee
• Authorization program for independent parts of the construction or approval of partial projects, if requested by the promoter
• In cases of renovation/expansion of buildings included in the general catalog of protected elements in historic city centers or historic centers of peripheral districts and historic colonies, a color photographic description of the existing building that permits, during enlargement operations, confirmation of the correct alignment of the enlargement plans with the historic city zoning restrictions
• License of parceling, if the new construction needs previous parceling
• Official alignment, if required
• Project design of installation of telecommunications infrastructure Real Decreto 346/2011
• Project design of the use of solar energy for heating (either as an independent project design or as part of the general project design), signed by a qualified technician and countersigned by the appropriate official institute, if required by the Regulation Concerning the Harnessing of Solar Energy for Thermal Use
• Reglamento de seguridad contra incendios en los establecimientos industriales RD 2267/2004, de 3 de diciembre, modificado en parte por el RD 560/2010 de 7 de mayo
• Security and health certification or a basic certification regarding RD 1627/1997 de 24 de octubre
• Certify the destination of all the construction waste and demolition (RCD) according to the Law 5/2003 and amendments by Law 9/2010 (regarding abandoned and discharged wastes)

This procedure is regulated by the Ordenanza Fiscal Municipal Reguladora del Impuesto sobre Construcciones, Instalaciones y Obras (ICIO), dated October 9, 2001 (in accordance with the amendments approved by Plenary Council dated September 25, 2013). Since the end of 2012, the time to obtain a building permit was reduced to approximately 45 days.

6 Notify labor authority of the start of construction (apertura del centro de trabajo) at the Ministry of Employment, Tourism and Culture

Agency : Ministry of Employment and Social Security

Upon authorization from the College of Architects of Madrid, and in line with “Orden TIN/1071/2010, de 27 de abril” BuildCo must notify the Ministry of Employment, Tourism and Culture of the start of construction.

7 Receive initial inspection

Agency : Municipality of Madrid

According to the building license, one on-site inspection must be carried out during construction and one at the end of the process.

If, during the inspections, the committee detects any possible infringements of the building regulations or criminal law, a proposal on sanctions must be made, and a copy of the written record is given to the public prosecutor. At minimum, administrative proceedings are initiated.

In each inspection report, a record is included that provides information on every person involved and their roles, as well as on the facts, circumstances, dates, and results of the inspection. The record is regarded as a public administrative deed. The record must be signed by the inspector(s) and by the person to whom the construction works have been attributed at the time of the inspection. The inspection can only be conducted once the construction has started, for that reason this procedure cannot be simultaneous with the previous one.

8 Obtain completion certificate (visado del certificado final de obra -CFO) from College of Architects of Madrid

Agency : College of Architects of Madrid

Once construction works have been completed, the architect and surveyor must sign off a document certifying that the construction has followed the approved plans. Therefore, both individuals are responsible for the construction performed. This completion certificate must be approved by the College of Architects of Madrid.

This procedure is legislated in “Real Decreto 1000/2010, de 5 de agosto, sobre visado colegial obligatorio”.

This procedure can only be done when the consturciton is finalized, for that reason this procedure cannot be simultaneous with the previous one.

The basis of the cost is in “Precios del Visado de los Trabajos profesionales”. The formula used is the following: Cost of approval = Módulo x C x S x Qv x F / 6000. For a warehouse such as the Doing Business case study: M = 497.43; C = 9.00; S = 1300.6; Qv = 1.40; F = 0.15. Therefore, cost of approval is 497.43 *9*1300.6*1.40*0.15/6000 =203.79 EUR”

9 Request final inspection in connection with the occupancy permit (licencia de primera ocupacion y funcionamiento)

h1 Agency : Municipality of Madrid The cost details to request and receive final inspection is provided on the official website of the Municipality of Madrid, (www.munimadrid.es).

13 Request and obtain water connection

Agency : Canal de Isabel II

In parallel with registering the building. BuildCo. can request the water services. If the flow of water is less than 6 liters per second or if fewer than 25 counters are needed in one hall, only the following documents must be submitted:

• Technical report (Memoria técnica), not required if the flow of water is less than 3 liters per second

• Form 2.1.4

• Confirmation of fee payment (EUR 12.28 must be paid at the counter)

• Two copies of Form 2.1.3 (Impreso de Final de Obra)

10 days

EUR 1,200

If the required flow of water is more than 6 liters per second or if more than 25 counters are needed in one hall, the following additional documents must be filed:

• Project design from an engineer specialized in planning water facilities

• Fee (in this case, a certain percentage of the budget)

Since this procedure can be applied to another organization, it can be simultaneous with the previous one.

Takes place simultaneously with previous procedure.

Details – Dealing with Construction Permits in Spain – Measure of Quality

Getting Electricity

This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tariffs index measures reliability of supply, transparency of tariffs and the price of electricity. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.

What the indicators measure

Case study assumptions

Procedures to obtain an electricity connection (number)

• Submitting all relevant documents and obtaining all necessary clearances and permits

• Completing all required notifications and receiving all necessary inspections

• Obtaining external installation works and possibly purchasing material for these works

• Concluding any necessary supply contract and obtaining final supply

  Time required to complete each procedure (calendar days)

• Is at least 1 calendar day

• Each procedure starts on a separate day

• Does not include time spent gathering information

• Reflects the time spent in practice, with little follow-up and no prior contact with officials

  Cost required to complete each procedure (% of income per capita)

• Official costs only, no bribes

• Value added tax excluded

  The reliability of supply and transparency of tariffs index (0-8)

• Duration and frequency of power outages (0–3)

• Tools to monitor power outages (0–1)

• Tools to restore power supply (0–1)

• Regulatory monitoring of utilities’ performance (0–1)

• Financial deterrents limiting outages (0–1)

• Transparency and accessibility of tariffs (0–1)

  To make the data comparable across economies, several assumptions about the warehouse, the electricity connection and the monthly consumption are used.

  The warehouse:

  • Is owned by a local entrepreneur and is used for storage of goods.

  • Is located in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.

  • Is located in an area where similar warehouses are typically located and is in an area with no physical constraints. For example, the property is not near a railway.

  • Is a new construction and is being connected to electricity for the first time.

  • Has two stories with a total surface area of approximately 1,300.6 square meters (14,000 square feet). The plot of land on which it is built is 929 square meters (10,000 square feet).

    The electricity connection:

  • Is a permanent one with a three-phase, four-wire Y connection with a subscribed capacity of 140- kilo-volt-ampere (kVA) with a power factor of 1, when 1 kVA = 1 kilowatt (kW).

  • Has a length of 150 meters. The connection is to either the low- or medium-voltage distribution network and is either overhead or underground, whichever is more common in the area where the warehouse is located and requires works that involve the crossing of a 10-meter road (such as by excavation or overhead lines) but are all carried out on public land. There is no crossing of other owners’ private property because the warehouse has access to a road.

  • Does not require work to install the internal wiring of the warehouse. This has already been completed up to and including the customer’s service panel or switchboard and the meter base.

    The monthly consumption:

  • It is assumed that the warehouse operates 30 days a month from 9:00 a.m. to 5:00 p.m. (8 hours a day), with equipment utilized at 80% of capacity on average and that there are no electricity cuts (assumed for simplicity reasons) and the monthly energy consumption is 26,880 kilowatt-hours (kWh); hourly consumption is 112 kWh.

  • If multiple electricity suppliers exist, the warehouse is served by the cheapest supplier.

  • Tariffs effective in January of the current year are used for calculation of the price of electricity for the warehouse. Although January has 31 days, for calculation purposes only 30 days are used.

  Price of electricity (cents per kilowatt-hour)*

• Price based on monthly bill for commercial warehouse in case study

*Note: Doing Business measures the price of electricity, but it is not included in the ease of doing business score nor in the ranking on the ease of getting electricity.

Getting Electricity – Spain

Figure – Getting Electricity in Spain – Score

Figure – Getting Electricity in Spain and comparator economies – Ranking and Score

Note: The ranking of economies on the ease of getting electricity is determined by sorting their scores for getting electricity. These scores are the simple average of the scores for all the component indicators except the price of electricity.

Figure – Getting Electricity in Spain – Procedure, Time and Cost

* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.

Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (https://doingbusiness.org/en/methodology). For details on the procedures

reflected here, see the summary below.

Figure – Getting Electricity in Spain and comparator economies – Measure of Quality

Details – Getting Electricity in Spain – Procedure, Time and Cost

Details – Getting Electricity in Spain – Measure of Quality

Note:

If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency of tariff index. If the duration and frequency of outages is not available, or is over 100, the economy is not eligible to score on the index.

If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index.

Registering Property

This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. The quality of land administration index has five dimensions: reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.

What the indicators measure

Case study assumptions

Procedures to legally transfer title on immovable property (number)

• Preregistration procedures (for example, checking for liens, notarizing sales agreement, paying property transfer taxes)

• Registration procedures in the economy's largest business city.

• Postregistration procedures (for example, filling title with municipality)

  Time required to complete each procedure (calendar days)

• Does not include time spent gathering information

• Each procedure starts on a separate day – though procedures that can be fully completed online are an exception to this rule

• Procedure is considered completed once final document is received

• No prior contact with officials

  Cost required to complete each procedure (% of property value)

• Official costs only (such as administrative fees, duties and taxes).

• Value Added Tax, Capital Gains Tax and illicit payments are excluded

  Quality of land administration index (0-30)

• Reliability of infrastructure index (0-8)

• Transparency of information index (0–6)

• Geographic coverage index (0–8)

• Land dispute resolution index (0–8)

• Equal access to property rights index (-2–0)

To make the data comparable across economies, several assumptions about the parties to the transaction, the property and the procedures are used.

The parties (buyer and seller):

• Are limited liability companies (or the legal equivalent).

• Are located in the periurban (that is, on the outskirts of the city but still within its official limits) area of the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.

• Are 100% domestically and privately owned.

• Perform general commercial activities.

  The property (fully owned by the seller):

• Has a value of 50 times income per capita, which equals the sale price.

• Is fully owned by the seller.

• Has no mortgages attached and has been under the same ownership for the past 10 years.

• Is registered in the land registry or cadastre, or both, and is free of title disputes.

• Is located in a periurban commercial zone (that is, on the outskirts of the city but still within its official limits), and no rezoning is required.

• Consists of land and a building. The land area is 557.4 square meters (6,000 square feet). A two- story warehouse of 929 square meters (10,000 square feet) is located on the land. The warehouse is 10 years old, is in good condition, has no heating system and complies with all safety standards, building codes and legal requirements. The property, consisting of land and building, will be transferred in its entirety.

• Will not be subject to renovations or additional construction following the purchase.

• Has no trees, natural water sources, natural reserves or historical monuments of any kind.

• Will not be used for special purposes, and no special permits, such as for residential use, industrial plants, waste storage or certain types of agricultural activities, are required.

• Has no occupants, and no other party holds a legal interest in it.

Registering Property – Spain

Figure – Registering Property in Spain – Score

Figure – Registering Property in Spain and comparator economies – Ranking and Score

Note: The ranking of economies on the ease of registering property is determined by sorting their scores for registering property. These scores are the simple average of the scores for each of the component indicators.

Figure – Registering Property in Spain – Procedure, Time and Cost

* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.

Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (https://doingbusiness.org/en/methodology). For details on the procedures reflected here, see the summary below.

Figure – Registering Property in Spain and comparator economies – Measure of Quality

Details – Registering Property in Spain – Procedure, Time and Cost

Notary requests property information from the Property Registry

Agency : Property Registry

According to the law (Art. 175 of the Decree dated on June 2, 1944), the notary is obliged to duly inform the parties, be aware of the ownership and encumbrances on the property, and consult the Property Registry books before executing the deed. The consultations can be done on-line at www.registradores.org and the printout from the internet is valid.

This document is an “Informative Land Registry Extract” containing the same information as an Ownership and encumbrances Certificate, and bearing the same responsibility of the Registrar in case of mistake as a formal certificate would provide. This is an information product specifically foreseen by the Mortgage Law to answer the Notary's requests of Information related to registrable acts and contracts. The Notary submits an electronic request and receives the information also by electronic means. From that moment and for the next ten days, the Registrar must inform the Notary about any Document submitted to the Land Registry related to the same property, within the maximum term of 24 hours since such document was submitted to the Land Registry Office. This procedure is aimed at preventing any surprises or unexpected situations while the contract is being formalized.

Article 28 of "Act 24 /2005 on reforms to foster productivity", orders the direct and on line access from notaries to the register books in order to obtain information and register the notarial deeds. This obligation was stated by the former Act 24/2001. Nevertheless, up to now registries have not implemented this law and notaries still have to ask information via "telefax", according to article 354-a of the Mortgage Act of 8 February 1946 and the implementing Regulations of 14 February 1947.

2 Notary obtains cadastral description

Agency : Cadastre

The Notary would search the land parcel corresponding to the property object of the transaction to identify the area of the land whether there are any buildings in the property and the cadastral value for tax purposes (for property transfer tax/value added tax, for municipal capital gains tax and for real estate tax).

No cost if the "Graphic Consultation" is submitted on line. But it does not include neither the name of the owner nor the cadastral value of the property. Those data can be obtained at a cost of 1€ or 2€ (depending on the extension of the certificate) via the notarial platform SIGNO that includes both the name of the owner and the cadastral value of the property.

The Notary has special access to the Cadaster database. If parties check this information by themselves, they still can verify boundaries, size and buildings, but they cannot obtain information on ownership and cadastral value. In order to obtain this information, they have to request an extract for a fee.

Less than one day, online

if obtained electronically

3

Execution and delivery of the public deed of purchase of the property

Agency : Notary

Property transfers are valid with a private contract between the parties, plus the handing over of the possession of the property to the buyer (ie. the "traditio" through, for example, the handing over of the keys to the property to the buyer). However, in order to make the property transfer opposable to good faith third parties, it has to be registered at the Land Registry, and in order to be registered, the contract between the parties has to be notarized. Additionally, if the buyer acquired the property in good faith, his title over the property would be indefeasible after registration.

Notary fees are set according to a cumulative scale:

• Property value up to EUR 6,010.12: EUR 90.151816;

• For the excess amount between EUR 6,010.13 and EUR 30,050.61: 4.5 per 1,000;

• For the excess amount between EUR 30,050.62 and EUR 60,101.21: 1,50 per 1,000;

• For the excess amount between EUR 60,101.22 and EUR 150,253.03: 1 per 1,000;

• For the excess amount between EUR 150,253.04 and EUR 601,012.10: 0.5 per 1,000;

• For the excess amount between EUR 601,012.11 and EUR 6,010,121.04: 0.3 per 1,000;

• For the excess amount above EUR 6,010,121.04 the fees are determined by agreement between the notary and client.

EUR 728.08; (Notary’s fees (decreasing scale): EUR 730 for a property of this value (minus 5% discount)

For property values not exceeding EUR 6.010,12:

EUR 90,151816.

For the excess amount between EUR 6.010,13

and 30.050,61: 0,45%.

For the excess amount between EUR 30.050,62

and 60.101,21: 0,15%.

For the excess amount between EUR 60.101,22

and 150.253,03: 0,1%.

For the excess amount between EUR 150.253,04

and 601.012,10: 0,05%.

For the excess amount over EUR 601.012,10 until 6.010.121,04: 0,03%.)

The Real Decreto Ley 8/2010, of May 20 2010, modifies the Real Decreto 1426/1989, of November 17th 1989, establishing notary fees. The 2010 decree establishes a 5% discount for notary fees. According to Royal Decree 45/2007, the notary must issue an authorized copy of the deed on the same or next day and send it to the Registry electronically, unless otherwise requested by the interested party.

The documentation shall include:

• Power of attorney granted by the seller and ID of the person in favor of whom the power was granted.

• Power of attorney granted by the buyer and ID of the person in favor of whom the power was granted.

• The public deed that transferred the property, which shall indicate the following information: (i) Company tax identification and registration numbers; (ii) Means of payment used in the transaction; and (iii) Cadastral reference.

4 Payment of the Transfer Tax (ITP) and obtain the confirmation of payment at tax authority

Agency : Autonomous Community of Madrid's Tax Office

First transfers of property or transfers made between entrepreneurs are subject to VAT and Stamp Duty. Second and subsequent property transfers are not subject to VAT, but to the Transfer Tax ("Impuesto sobre Transmisiones Patrimoniales y Actos Jurídicos Documentados", ITP).

For the Doing Business case study, as it is assumed that the buyer is a company and the property is in Madrid and has been transferred at least once in the past, the applicable tax should be the Transfer Tax (ITP). The ITP is paid at the relevant tax office within 30 working days after the date of granting of the notarial deed of transfer (a copy of the transfer deed is to be attached to the transfer tax liquidation form).

In some autonomias, like Madrid, Catalunya, and Andalucia, the tax may be paid online, although the buyer needs to obtain a stamp from the tax authority confirming the payment for ITP and capital gains tax.

5 File and pay the municipal capital gains tax ("Impuesto sobre el Incremento del Valor de los Terrenos de Naturaleza Urbana") and obtain receipt

Agency : Municipality of Madrid

In order to register the property transfer in the Property Registry, the parties must attach a receipt to the transfer deed proving that the transaction has been submitted to the Municipal Tax Authority in order to file and clear the Municipal Capital Gains Tax ("Impuesto sobre el Valor de los Terrenos de Naturaleza Urbana"). This procedure can be completed online at the website of the Municipality of Madrid.

Less than one day,

online

Capital Gains Tax is not included in the cost of this

procedure

Notaries can also communicate the transaction to the municipality online. The municipality sends an e-mail to the notary confirming the reception.

The tax to be paid for the IVTNU is not used to calculate the cost of this procedure.

However, it has to be noted that under certain circumstances (e.g., that the acquisition of the property is within the scope of the usual activities of the acquiring company), the acquiring company can choose to make the transaction subject to transfer tax or VAT. The VAT paid would become a credit that the company would deduct from subsequent transactions, such as those related to the normal business of the company.

6 The public deed is registered at the Land and Property Registry

Agency : Property Registry

The notary submits the public deed to the Land Registry. The Land Registry will review and register the transfer within the legal time limit of 15 business days. If the Procedure takes more than 15 business days, the fees will be reduced by 30%, unless there is an objective reason for the delay.

8 days

EUR 431.61; (According to

decree 1427, the cost is calculated as follows:

With the introduction of technology and online Procedures due to Law 24/2005 of November 18, in particular section II on electronic registration, the time to register is in the process of being

reduced. The average registration time is currently at 8 calendar days.

a) property value up to 6010.12 euros, 24.040484

euros.

The documentation to be presented to the Land Registry shall include: (i) Public deed; (ii) Proof of VAT or ITP payment (attached to the sale purchase agreement); (iii) Proof of stamp duty payment (in the case that VAT applied and not ITP); and (iv) proof of payment of the municipal capital gains tax.

1. 0.175% of the property valuebetween 6.010,13

   and 30050.61 euros,.

2. 0.125% of the value between 30050.62 and

   60101.21 .

3. 0.075% of the property value between 60101.22

   and 150253.03 euros.

4. 0.03% of the property value between 150.253,04

   and 601.012,10 euros

5. 0.02% for values above 601.012,10 euros.

A 5% discount is applicable to the cost. Also, an administrative fee of EUR 9.02 is added to

Details – Registering Property in Spain – Measure of Quality

Getting Credit

This topic explores two sets of issues—the strength of credit reporting systems and the effectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.

What the indicators measure

Case study assumptions

Strength of legal rights index (0–12)

• Rights of borrowers and lenders through collateral laws (0-10)

• Protection of secured creditors’ rights through bankruptcy laws (0-2)

  Depth of credit information index (0–8)

• Scope and accessibility of credit information distributed by credit bureaus and credit registries (0-8)

  Credit bureau coverage (% of adults)

• Number of individuals and firms listed in largest credit bureau as a percentage of adult population

  Credit registry coverage (% of adults)

• Number of individuals and firms listed in credit registry as a percentage of adult population

Doing Business assesses the sharing of credit information and the legal rights of borrowers and lenders with respect to secured transactions through 2 sets of indicators. The depth of credit information index measures rules and practices affecting the coverage, scope and accessibility of credit information available through a credit registry or a credit bureau. The strength of legal rights index measures the degree to which collateral and bankruptcy laws protect the rights of borrowers and lenders and thus facilitate lending. For each economy it is first determined whether a unitary secured transactions system exists. Then two case scenarios, case A and case B, are used to determine how a nonpossessory security interest is created, publicized and enforced according to the law. Special emphasis is given to how the collateral registry operates (if registration of security interests is possible). The case scenarios involve a secured borrower, company ABC, and a secured lender, BizBank.

In some economies the legal framework for secured transactions will allow only case A or case B (not both) to apply. Both cases examine the same set of legal provisions relating to the use of movable collateral.

Several assumptions about the secured borrower (ABC) and lender (BizBank) are used:

• ABC is a domestic limited liability company (or its legal equivalent).

• ABC has up to 50 employees.

• ABC has its headquarters and only base of operations in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.

• Both ABC and BizBank are 100% domestically owned.

The case scenarios also involve assumptions. In case A, as collateral for the loan, ABC grants BizBank a nonpossessory security interest in one category of movable assets, for example, its machinery or its inventory. ABC wants to keep both possession and ownership of the collateral. In economies where the law does not allow nonpossessory security interests in movable property, ABC and BizBank use a fiduciary transfer-of-title arrangement (or a similar substitute for nonpossessory security interests).

In case B, ABC grants BizBank a business charge, enterprise charge, floating charge or any charge that gives BizBank a security interest over ABC’s combined movable assets (or as much of ABC’s movable assets as possible). ABC keeps ownership and possession of the assets.

Getting Credit – Spain

Figure – Getting Credit in Spain – Score

Figure – Getting Credit in Spain and comparator economies – Ranking and Score

DB 2020 Getting Credit Score

Note: The ranking of economies on the ease of getting credit is determined by sorting their scores for getting credit. These scores are the sum of the scores for the strength of legal rights index and the depth of credit information index.

Figure – Legal Rights in Spain and comparator economies

Details – Legal Rights in Spain

Figure – Credit Information in Spain and comparator economies

Details – Credit Information in Spain

Note: An economy receives a score of 1 if there is a "yes" to either bureau or registry. If the credit bureau or registry is not operational or covers less than 5% of the adult population, the total score on the depth of credit information index is 0.

Protecting Minority Investors

This topic measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights, governance safeguards and corporate transparency requirements that reduce the risk of abuse. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.

What the indicators measure

Case study assumptions

• Extent of disclosure index (0–10): Disclosure, review, and approval requirements for related-party transactions
• Extent of director liability index (0–10): Ability of minority shareholders to sue and hold interested directors liable for prejudicial related-party transactions; Available legal remedies (damages, disgorgement of profits, disqualification from managerial position(s) for one year or more, rescission of the transaction)
• Ease of shareholder suits index (0–10): Access to internal corporate documents; Evidence obtainable during trial and allocation of legal expenses
• Extent of conflict of interest regulation index (0-30): Sum of the extent of disclosure, extent of director liability and ease of shareholder suits indices
• Extent of shareholder rights index (0-6): Shareholders’ rights and role in major corporate decisions
• Extent of ownership and control index (0-7): Governance safeguards protecting shareholders from undue board control and entrenchment
• Extent of corporate transparency index (0-7): Corporate transparency on ownership stakes, compensation, audits and financial prospects
• Extent of shareholder governance index (0–20): Sum of the extent of shareholders rights, extent of ownership and control and extent of corporate transparency indices
• Strength of minority investor protection index (0–50): Sum of the extent of conflict of interest regulation and extent of shareholder governance indices

To make the data comparable across economies, a case study uses several assumptions about the business and the transaction.

The business (Buyer):

• Is a publicly traded corporation listed on the economy’s most important stock exchange.
• Has a board of directors and a chief executive officer (CEO) who may legally act on behalf of Buyer where permitted, even if this is not specifically required by law.
• Has a supervisory board in economies with a two-tier board system on which Mr. James appointed 60% of the shareholder-elected members.
• Has not adopted bylaws or articles of association that go beyond the minimum requirements. Does not follow codes, principles, recommendations or guidelines that are not mandatory.
• Is a manufacturing company with its own distribution network.

The transaction involves the following details:

• Mr. James owns 60% of Buyer, sits on Buyer’s board of directors and elected two directors to Buyer’s five-member board.
• Mr. James also owns 90% of Seller, a company that operates a chain of retail hardware stores. Seller recently closed a large number of its stores.
• Mr. James proposes that Buyer purchase Seller’s unused fleet of trucks to expand Buyer’s distribution of its food products, a proposal to which Buyer agrees. The price is equal to 10% of Buyer’s assets and is higher than the market value.
• The proposed transaction is part of the company’s principal activity and is not outside the authority of the company.
• Buyer enters into the transaction. All required approvals are obtained, and all required disclosures made—that is, the transaction was not entered into fraudulently.
• The transaction causes damages to Buyer. Shareholders sue Mr. James and the executives and directors that approved the transaction.

Protecting Minority Investors – Spain

Figure – Protecting Minority in Spain – Score

Figure – Protecting Minority Investors in Spain and comparator economies – Ranking and Score

DB 2020 Protecting Minority Investors Score

Note: The ranking of economies on the strength of minority investor protections is determined by sorting their scores for protecting minority investors. These scores are the simple average of the scores for the extent of conflict of interest regulation index and the extent of shareholder governance index.

Figure – Protecting Minority Investors in Spain and comparator economies – Measure of Quality

Details – Protecting Minority Investors in Spain – Measure of Quality

Paying Taxes

This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as the administrative burden of paying taxes and contributions and complying with postfiling procedures (VAT refund and tax audit). The most recent round of data collection for the project was completed in May 2019 covering for the Paying Taxes indicator calendar year 2018 (January 1, 2018 – December 31, 2018). See the methodology for more information.

What the indicators measure

Case study assumptions

Tax payments for a manufacturing company in 2018 (number per year adjusted for electronic and joint filing and payment)

• Total number of taxes and contributions paid or withheld, including consumption taxes (value added tax, sales tax or goods and service tax)

• Method and frequency of filing and payment

  Time required to comply with 3 major taxes (hours per year)

• Collecting information, computing tax payable

• Preparing separate tax accounting books, if required

• Completing tax return, filing with agencies

• Arranging payment or withholding

  Total tax and contribution rate (% of commercial profits)

• Profit or corporate income tax

• Social contributions, labor taxes paid by employer

• Property and property transfer taxes

• Dividend, capital gains, financial transactions taxes

• Waste collection, vehicle, road and other taxes

  Postfiling Index

• Time to comply with VAT refund (hours)

• Time to obtain VAT refund (weeks)

• Time to comply with a corporate income tax correction (hours)

• Time to complete a corporate income tax correction (weeks)

Using a case scenario, Doing Business records taxes and mandatory contributions a medium size company must pay in a year, and measures the administrative burden of paying taxes, contributions and dealing with postfiling processes. Information is also compiled on frequency of filing and payments, time taken to comply with tax laws, time taken to comply with the requirements of postfiling processes and time waiting.

To make data comparable across economies, several assumptions are used:

• TaxpayerCo is a medium-size business that started operations on January 1, 2017. It produces ceramic flowerpots and sells them at retail. All taxes and contributions recorded are paid in the second year of operation (calendar year 2018). Taxes and mandatory contributions are measured at all levels of government.

  The VAT refund process:

• In June 2018, TaxpayerCo. makes a large capital purchase: the value of the machine is 65 times income per capita of the economy. Sales are equally spread per month (1,050 times income per capita divided by 12) and cost of goods sold are equally expensed per month (875 times income per capita divided by 12). The machinery seller is registered for VAT and excess input VAT incurred in June will be fully recovered after four consecutive months if the VAT rate is the same for inputs, sales and the machine and the tax reporting period is every month. Input VAT will exceed Output VAT in June 2018.

  The corporate income tax audit process:

• An error in calculation of income tax liability (for example, use of incorrect tax depreciation rates, or incorrectly treating an expense as tax deductible) leads to an incorrect income tax return and a corporate income tax underpayment. TaxpayerCo. discovered the error and voluntarily notified the tax authority. The value of the underpaid income tax liability is 5% of the corporate income tax liability due. TaxpayerCo. submits corrected information after the deadline for submitting the annual tax return, but within the tax assessment period.

Paying Taxes – Spain

Figure – Paying Taxes in Spain – Score

Figure – Paying Taxes in Spain and comparator economies – Ranking and Score

DB 2020 Paying Taxes Score

Note: The ranking of economies on the ease of paying taxes is determined by sorting their scores for paying taxes. These scores are the simple average of the scores for each of the component indicators, with a threshold and a nonlinear transformation applied to one of the component indicators, the total tax and contribution rate. The threshold is defined as the total tax and contribution rate at the 15th percentile of the overall distribution for all years included in the analysis up to and including Doing Business 2015, which is 26.1%. All economies with a total tax and contribution rate below this threshold receive the same score as the economy at the threshold.

Figure – Paying Taxes in Spain and comparator economies – Measure of Quality

Details – Paying Taxes in Spain – Tax by Type

Details – Paying Taxes in Spain – Measure of Quality

Notes: Names of taxes have been standardized. For instance income tax, profit tax, tax on company's income are all named corporate income tax in this table. The hours for VAT include all the VAT and sales taxes applicable.

The hours for Social Security include all the hours for labor taxes and mandatory contributions in general.

The postfiling index is the average of the scores on time to comply with VAT refund, time to obtain a VAT refund, time to comply with a corporate income tax correction and time to complete a corporate income tax correction.

N/A = Not applicable.

Trading across Borders

Doing Business records the time and cost associated with the logistical process of exporting and importing goods. Doing Business measures the time and cost (excluding tariffs) associated with three sets of procedures—documentary compliance, border compliance and domestic transport—within the overall process of exporting or importing a shipment of goods. The most recent round of data collection for the project was completed in May 2019.See the methodology for more information.

What the indicators measure

Documentary compliance

• Obtaining, preparing and submitting documents during transport, clearance, inspections and port or border handling in origin economy

• Obtaining, preparing and submitting documents required by destination economy and any transit economies

• Covers all documents required by law and in practice, including electronic submissions of information

Border compliance

• Customs clearance and inspections

• Inspections by other agencies (if applied to more than 20% of shipments)

• Handling and inspections that take place at the economy’s port or border

  Domestic transport

• Loading or unloading of the shipment at the warehouse or port/border

• Transport between warehouse and port/border

• Traffic delays and road police checks while shipment is en route

To make the data comparable across economies, a few assumptions are made about the traded goods and the transactions:

Time: Time is measured in hours, and 1 day is 24 hours (for example, 22 days are recorded as 22×24=528 hours). If customs clearance takes 7.5 hours, the data are recorded as is. Alternatively, suppose documents are submitted to a customs agency at 8:00a.m., are processed overnight and can be picked up at 8:00a.m. the next day. The time for customs clearance would be recorded as 24 hours because the actual procedure took 24 hours.

Cost: Insurance cost and informal payments for which no receipt is issued are excluded from the costs recorded. Costs are reported in U.S. dollars. Contributors are asked to convert local currency into U.S. dollars based on the exchange rate prevailing on the day they answer the questionnaire. Contributors are private sector experts in international trade logistics and are informed about exchange rates.

Assumptions of the case study:

• For all 190 economies covered by Doing Business, it is assumed a shipment is in a warehouse in the largest business city of the exporting economy and travels to a warehouse in the largest business city of the importing economy.

• It is assumed each economy imports 15 metric tons of containerized auto parts (HS 8708) from its natural import partner—the economy from which it imports the largest value (price times quantity) of auto parts. It is assumed each economy exports the product of its comparative advantage (defined by the largest export value) to its natural export partner—the economy that is the largest purchaser of this product. Shipment value is assumed to be $50,000.

• The mode of transport is the one most widely used for the chosen export or import product and the trading partner, as is the seaport or land border crossing.

• All electronic information submissions requested by any government agency in connection with the shipment are considered to be documents obtained, prepared and submitted during the export or import process.

• A port or border is a place (seaport or land border crossing) where merchandise can enter or leave an economy.

• Relevant government agencies include customs, port authorities, road police, border guards, standardization agencies, ministries or departments of agriculture or industry, national security agencies and any other government authorities.

Trading across Borders – Spain

Figure – Trading across Borders in Spain – Score

Figure – Trading across Borders in Spain and comparator economies – Ranking and Score

Note: The ranking of economies on the ease of trading across borders is determined by sorting their scores for trading across borders. These scores are the simple average of the scores for the time and cost for documentary compliance and border compliance to export and import.

Figure – Trading across Borders in Spain – Time and Cost

Details – Trading across Borders in Spain

Details – Trading across Borders in Spain – Components of Border Compliance

Details – Trading across Borders in Spain – Trade Documents

Enforcing Contracts

The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local first-instance court, and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and efficiency in the court system. The most recent round of data collection was completed in May 2019. See the methodology for more information.

What the indicators measure

Case study assumptions

Time required to enforce a contract through the courts (calendar days)

• Time to file and serve the case

• Time for trial and to obtain the judgment

• Time to enforce the judgment

  Cost required to enforce a contract through the courts (% of claim value)

• Average attorney fees

• Court costs

• Enforcement costs

  Quality of judicial processes index (0-18)

• Court structure and proceedings (-1-5)

• Case management (0-6)

• Court automation (0-4)

• Alternative dispute resolution (0-3)

The dispute in the case study involves the breach of a sales contract between two domestic businesses. The case study assumes that the court hears an expert on the quality of the goods in dispute. This distinguishes the case from simple debt enforcement.

To make the data on the time and comparable across economies, several assumptions about the case are used:

• The dispute concerns a lawful transaction between two businesses (Seller and Buyer), both located in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.

• The Buyer orders custom-made furniture, then fails to pay alleging that the goods are not of adequate quality.

• The value of the dispute is 200% of the income per capita or the equivalent in local currency of USD 5,000, whichever is greater.

• The Seller sues the Buyer before the court with jurisdiction over commercial cases worth 200% of income per capita or $5,000 whichever is greater.

• The Seller requests the pretrial attachment of the defendant’s movable assets to secure the claim.

• The claim is disputed on the merits because of Buyer’s allegation that the quality of the goods was not adequate.

• The judge decides in favor of the seller; there is no appeal.

• The Seller enforces the judgment through a public sale of the Buyer’s movable assets.

Enforcing Contracts – Spain

Figure – Enforcing Contracts in Spain – Score

Figure – Enforcing Contracts in Spain and comparator economies – Ranking and Score

DB 2020 Enforcing Contracts Score

Note: The ranking of economies on the ease of enforcing contracts is determined by sorting their scores for enforcing contracts. These scores are the simple average of the scores for each of the component indicators.

Figure – Enforcing Contracts in Spain – Time and Cost

Figure – Enforcing Contracts in Spain and comparator economies – Measure of Quality

Details – Enforcing Contracts in Spain

Details – Enforcing Contracts in Spain – Measure of Quality

Resolving Insolvency

Doing Business studies the time, cost and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate, which is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation or debt enforcement (foreclosure or receivership) proceedings. To determine the present value of the amount recovered by creditors, Doing Business uses the lending rates from the International Monetary Fund, supplemented with data from central banks and the Economist Intelligence Unit. The most recent round of data collection was completed in May 2019. See the methodology for more information.

What the indicators measure

Case study assumptions

Time required to recover debt (years)

• Measured in calendar years

• Appeals and requests for extension are included

  Cost required to recover debt (% of debtor’s estate)

• Measured as percentage of estate value

• Court fees

• Fees of insolvency administrators

• Lawyers’ fees

• Assessors’ and auctioneers’ fees

• Other related fees

  To make the data on the time, cost and outcome comparable across economies, several assumptions about the business and the case are used:

  • A hotel located in the largest city (or cities) has 201 employees and 50 suppliers. The hotel experiences financial difficulties.

  • The value of the hotel is 100% of the income per capita or the equivalent in local currency of USD 200,000, whichever is greater.

  • The hotel has a loan from a domestic bank, secured by a mortgage over the hotel’s real estate. The hotel cannot pay back the loan, but makes enough money to operate otherwise.

  In addition, Doing Business evaluates the quality of legal framework applicable to judicial liquidation and reorganization proceedings and the extent to which best insolvency practices have been implemented in each economy covered.

  Outcome

• Whether business continues operating as a going concern or business assets are sold piecemeal

  Recovery rate for creditors

• Measures the cents on the dollar recovered by secured creditors

• Outcome for the business (survival or not) determines the maximum value that can be recovered

• Official costs of the insolvency proceedings are deducted

• Depreciation of furniture is taken into account

• Present value of debt recovered

  Strength of insolvency framework index (0- 16)

• Sum of the scores of four component indices:

• Commencement of proceedings index (0-3)

• Management of debtor’s assets index (0-6)

• Reorganization proceedings index (0-3)

• Creditor participation index (0-4)

Resolving Insolvency – Spain

Figure – Resolving Insolvency in Spain – Score

Figure – Resolving Insolvency in Spain and comparator economies – Ranking and Score

DB 2020 Resolving Insolvency Score

Note: The ranking of economies on the ease of resolving insolvency is determined by sorting their scores for resolving insolvency. These scores are the simple average of the scores for the recovery rate and the strength of insolvency framework index.

Figure – Resolving Insolvency in Spain – Time and Cost

Figure – Resolving Insolvency in Spain and comparator economies – Measure of Quality

Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice.”

Figure – Resolving Insolvency in Spain and comparator economies – Recovery Rate

Details – Resolving Insolvency in Spain

Details – Resolving Insolvency in Spain – Measure of Quality

Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice.”

Employing Workers

Doing Business presents detailed data for the employing workers indicators on the Doing Business website (https://www.doingbusiness.org). The study does not present rankings of economies on these indicators or include the topic in the aggregate ease of doing business score or ranking on the ease of doing business.

The most recent round of data collection was completed in May 2019. See the methodology for more information.

What the indicators measure

Case study assumptions

Hiring

(i) whether fixed-term contracts are prohibited for permanent tasks; (ii) maximum cumulative duration of fixed-term contracts;

(iii) length of the maximum probationary period; (iv) minimum wage;(v) ratio of minimum wage to the average value added per worker.

Working hours

(i) maximum number of working days allowed per week; (ii) premiums for work: at night, on a weekly rest day and overtime;

(iii) whether there are restrictions on work at night, work on a weekly rest day and for overtime work; (iv) length of paid annual leave.

Redundancy rules

(i) whether redundancy can be basis for terminating workers; (ii) whether employer needs to notify and/or get approval from third party to terminate 1 redundant worker and a group of 9 redundant workers; (iii) whether the law requires employer to reassign or retrain a worker before making worker redundant; (iv) whether priority rules apply for redundancies and reemployment.

To make the data comparable across economies, several assumptions about the worker and the business are used.

The worker:

• Is a cashier in a supermarket or grocery store, age 19, with one year of work experience.

• Is a full-time employee.

• Is not a member of the labor union, unless membership is mandatory.

  The business:

• Is a limited liability company (or the equivalent in the economy).

• Operates a supermarket or grocery store in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.

• Has 60 employees.

• Is subject to collective bargaining agreements if such agreements cover more than 50% of the food retail sector and they apply even to firms that are not party to them.

• Abides by every law and regulation but does not grant workers more benefits than those mandated by law, regulation or (if applicable) collective bargaining agreements.

Redundancy cost

(i) notice period for redundancy dismissal; (ii) severance payments, and (iii) penalties due when terminating a redundant worker. Data on the availability of unemployment protection for a worker with one year of employment is also collected.

Employing Workers – Spain

Details – Employing Workers in Spain

Answer

Hiring

Fixed-term contracts prohibited for permanent tasks? Yes

Maximum length of a single fixed-term contract (months) 36.0

Maximum length of fixed-term contracts, including renewals (months) 48.0

Minimum wage applicable to the worker assumed in the case study (US$/month) 1025.3

Maximum length of probationary period (months) 6.0

Ratio of minimum wage to value added per worker 0.3

Standard workday 8.0

Working hours

Maximum number of working days per week 5.5

Premium for night work (% of hourly pay) 6.6

Premium for work on weekly rest day (% of hourly pay) 0.0

Premium for overtime work (% of hourly pay) 0.0

Restrictions on night work? No

Restrictions on weekly holiday? No

Restrictions on overtime work? No

Paid annual leave for a worker with 1 year of tenure (working days) 22.0

Paid annual leave for a worker with 5 years of tenure (working days) 22.0

Paid annual leave for a worker with 10 years of tenure (working days) 22.0

Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in working days) 22.0

Redundancy rules

Dismissal due to redundancy allowed by law? Yes

Third-party notification if one worker is dismissed? Yes

Third-party approval if one worker is dismissed? No

Third-party notification if nine workers are dismissed? Yes

Third-party approval if nine workers are dismissed? No

Retraining or reassignment obligation before redundancy? No

Priority rules for redundancies? No

Priority rules for reemployment? No

Redundancy cost

Notice period for redundancy dismissal for a worker with 1 year of tenure (weeks of salary) 2.1

Notice period for redundancy dismissal for a worker with 10 years of tenure (weeks of salary) 2.1

Notice period for redundancy dismissal for a worker with 5 years of tenure (weeks of salary) 2.1

Severance pay for redundancy dismissal for a worker with 1 year of tenure (weeks of salary) 2.9

Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure, in weeks of salary) 2.1

Severance pay for redundancy dismissal for a worker with 5 years of tenure (weeks of salary) 14.3

Severance pay for redundancy dismissal for a worker with 10 years of tenure (weeks of salary) 28.6

Unemployment protection after one year of employment? Yes

Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure, in weeks of salary) 15.2

PEO Spain

Spain is a highly attractive destination for businesses seeking to utilize the services of a Professional Employer Organization (PEO). With its strategic location in Europe, well-developed infrastructure, and strong economic ties, Spain offers an ideal environment for international companies looking to expand their operations. As a PEO country, Spain provides a streamlined and efficient process for businesses to establish a presence and hire employees without the need for setting up a legal entity.

PEOs in Spain offer comprehensive HR and employer services, including payroll processing, benefits administration, tax compliance, and handling employment contracts. By partnering with a PEO in Spain, businesses can access local expertise, navigate complex labor regulations, and ensure compliance with Spanish employment laws. This arrangement allows companies to focus on their core business activities while leaving the administrative and HR responsibilities to the experienced hands of the PEO. Spain’s PEO services play a vital role in enabling international companies to enter the Spanish market seamlessly and tap into the country’s diverse talent pool and vibrant business opportunities.

Business Reforms in Spain

From May 2, 2018 to May 1, 2019, 115 economies implemented 294 business regulatory reforms across the 10 areas measured by Doing Business. Reforms inspired by

Doing Business have been implemented by economies in all regions. The following are reforms implemented since Doing Business 2008. =Doing Business reform making it easier to do business. = Change making it more difficult to do business.

DB2020

Protecting Minority Investors: Spain strengthened minority investor protections by clarifying ownership and control structures.

DB2018

Enforcing Contracts: Spain made enforcing contracts easier by reducing court fees for filing a claim.

DB2017

Getting Electricity: Spain made getting electricity easier by upgrading Madrid’s electrical grid, thereby allowing more customers to connect to the low-voltage network. Furthermore, the approval process to obtain a new commercial connection was streamlined.

Paying Taxes: Spain made paying taxes less costly by reducing the property tax rate, vehicle tax rate, tax on property transfer, and abolishing the environmental fee. Spain made paying taxes easier by introducing a new electronic system for filing social security contributions.

Enforcing Contracts: Spain made enforcing contracts easier by introducing a mandatory electronic filing system for court users.

DB2016

Protecting Minority Investors: Spain strengthened minority investor protections by requiring that major sales of company assets be subject to shareholder approval.

Paying Taxes: Spain made paying taxes less costly for companies by reducing rates for corporate income, capital gains and environment taxes—and made it easier by introducing the online Cl@ve system for filing VAT returns. At the same time, Spain reduced the amount allowable for depreciation of fixed assets and raised the ceiling for social security contributions.

DB2015

Starting a Business: Spain made starting a business easier by introducing an electronic system linking several public agencies and thereby simplifying business registration.

Registering Property: Spain made transferring property easier by reducing the property transfer tax rate.

Paying Taxes: Spain made paying taxes less costly for companies by reducing the statutory corporate income tax rate.

Resolving Insolvency: Spain made resolving insolvency easier by introducing new rules for out-of-court restructuring, introducing provisions applicable to prepackaged reorganizations and making insolvency proceedings more public.

DB2014

Starting a Business: Spain made starting a business easier by eliminating the requirement to obtain a municipal license before starting operations and by improving the efficiency of the commercial registry.

Employing Workers: Spain reduced the maximum cumulative duration of fixed-term contracts and increased the minimum wage.

DB2013

Trading across Borders: Spain reduced the time to import by further expanding the use of electronic submission of customs declarations and improving the sharing of information among customs and other agencies.

Resolving Insolvency: Spain strengthened its insolvency process by making workouts easier, offering more protections for refinancing agreements, allowing conversion from reorganization into liquidation at any time, allowing reliefs of the stay under certain circumstances and permitting the judge to determine whether an asset of the insolvent company is necessary for its continued operation.

Employing Workers: Spain temporarily allowed unlimited duration of fixed-term contracts.

DB2012

Starting a Business: Spain eased the process of starting a business by reducing the cost to start a business and decreasing the minimum capital requirement.

DB2011

Trading across Borders: Spain streamlined the documentation for imports by including tax-related information on its single administrative document.

Resolving Insolvency: Spain amended its regulations governing insolvency proceedings with the aim of reducing the cost and time. The new regulations also introduced out-of-court workouts.

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DB2010

Paying Taxes: Spain made paying taxes easier and less costly for companies by improving efficiency in the electronic filing and payment system and reducing the corporate income tax rate.

DB2008

Paying Taxes: Spain made paying taxes less costly for companies by reducing the corporate income tax rate.

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