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At Spain’s Door, a Welcome Mat for Entrepreneurs

nytimes.com

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Re: At Spain’s Door, a Welcome Mat for Entrepreneurs

#11

Post by lemming »

I lived in Spain for 9 years and ran a company there for 7 of those - I would never do it again. Even with competent professional legal & accounting assistance it's a bureaucratic nightmare by the standards of most other places I've been. It's also not particularly cheap - contrary to what the article says, Berlin in my experience is much cheaper.

That said, it's a nice place to live, especially Barcelona, and that helps to attract foreign talent if you can't find good people locally.

Re: At Spain’s Door, a Welcome Mat for Entrepreneurs

#12

Post by gyardley »

Moving to and living in a foreign country is a really great learning experience, but don't kid yourself - the sheer amount of bureaucracy involved in these entrepreneur-importing schemes plus the overhead of adapting to a new culture make them a net negative for any business you're starting.

Go if you want the adventure, but if you're really passionate about something you're working on, I'd recommend staying in place and working on it instead.

Re: At Spain’s Door, a Welcome Mat for Entrepreneurs

#13

Post by eps »

gyardley wrote: post #12

Moving to and living in a foreign country is a really great learning experience, but don't kid yourself - the sheer amount of bureaucracy involved in these entrepreneur-importing schemes plus the overhead of adapting to a new culture make them a net negative for any business you're starting. Go if you want the adventure, but if you're really passionate about something you're working on, I'd recommend staying in place…

Bureaucracy can be dealt with by hiring a specialist legal firm. It sounds really expensive, but in many cases it's not - it's in 10-20K range, which is comparable to what it costs to move an established household from US/Canada to Europe. One can of course sell everything, move with just a backpack and do it frugally by trying to deal with all the formalities themselves, but that's certainly is taxing if you are over certain age or have family/kids.

Re: At Spain’s Door, a Welcome Mat for Entrepreneurs

#14

Post by carlesfe »

Spain is like phone companies: a welcome mat for outsiders, a nightmare for insiders.

Spanish companies can't have anybody working (i.e. 'dormant' state), they always need an "administrador" who pays a monthly 300€ self-employment tax. This kills companies in early stages unless they can break even quickly (3600€/yr while not having any income, plus maintentance expenses, is terrible)

Creating a company is bureaucratically difficult, I reckon it was on the bottom area in the latest "easiest countries to create a company on" report.

If you're an exporter, you can go bankrupt because you owe worker taxes to the State... while they owe you return of export VAT. I personally know a case of these. They owed the State about 300k€ while the State owed them 500k€ for more than a year. They couldn't "cancel out" the debt. That is outrageous. They had to file bankrupcy.

And finally, if you're a small company, you have to pay a lot of taxes, while if you're big and can pay big lawyers/accountants, Spain is equivalent to a tax haven (i.e. Ireland). This is true. Spain attracts big companies with a tax maze which allows the rich to evade taxes.

This is really disheartening for Spanish enterpreneurs. We're treated as second-class citizens... in our own country. Our taxes go to finance big, foreign companies. That sucks.

Sorry for all the negativity, I'm currently trying to start a company in Spain and I'm meeting a lot of friends who also have. This is the general sentiment. Spain needs to fix A LOT of things if they want to be enterpreneur-friendly, starting with THEIR OWN enterpreneurs.

Re: At Spain’s Door, a Welcome Mat for Entrepreneurs

#15

Post by bjelkeman-again »

Animats wrote: post #10

The US has a similar deal, with E-1 and E-2 visas. You can buy your way into the US by investing $500K. This tends to be used more by people who made money outside the US and want to live there than by people doing startups. This is a treaty arrangement available only to citizens of countries which offer a reciprocal deal to Americans. Spain and most of the EU are is on the list; China (mainland) is not.

When we did it we didn't even need all the cash for it. Started a company in the EU. Built software on a seed investment. Had software startup valued at USD500k+ merge that into a US company with all the staff from the EU, six of us. Get E-1(2?) visas. Done.

Re: At Spain’s Door, a Welcome Mat for Entrepreneurs

#16

Post by fauigerzigerk »

carlesfe wrote: post #14

Spain is like phone companies: a welcome mat for outsiders, a nightmare for insiders. Spanish companies can't have anybody working (i.e. 'dormant' state), they always need an "administrador" who pays a monthly 300€ self-employment tax. This kills companies in early stages unless they can break even quickly (3600€/yr while not having any income, plus maintentance expenses, is terrible) Creating a company is bureaucrat…

I agree that the 300€ are a big turnoff initially, but it is not a self-employment tax. It's social security contributions and it entitles you to full health coverage (and eventually a pension). Granted, you can get the same in the UK for almost nothing until you actually make money. But the 300€ is about the same as in Germany I believe and you get a big rebate in the first few years if you register as self-employed for the first time.

Re: At Spain’s Door, a Welcome Mat for Entrepreneurs

#17

Post by skrebbel »

danielrhodes wrote: post #8

I recall reading an article a few years ago where an entrepreneur was sued by the Spanish government after his company went under. Spain is, as is the rest of Europe, quite hostile to entrepreneurship. It seems like Spain is trying to attract people from outside rather than deal with the problems inside. If they could make it super easy to start a company, relax red tape for businesses under a certain size, and encou…

> as is the rest of Europe

This, as everything, wildly varies among European countries. There's plenty European countries where it's easier to start a business than in many a US state. There's also plenty where you don't even want to think about it (Serbia, anyone?). Don't forget that Europe has about as many countries as the US has states.

Re: At Spain’s Door, a Welcome Mat for Entrepreneurs

#18

Post by lucaspiller »

fauigerzigerk wrote: post #16
carlesfe wrote: post #14

Spain is like phone companies: a welcome mat for outsiders, a nightmare for insiders. Spanish companies can't have anybody working (i.e. 'dormant' state), they always need an "administrador" who pays a monthly 300€ self-employment tax. This kills companies in early stages unless they can break even quickly (3600€/yr while not having any income, plus maintentance expenses, is terrible) Creating a company is bureaucrat…

I agree that the 300€ are a big turnoff initially, but it is not a self-employment tax. It's social security contributions and it entitles you to full health coverage (and eventually a pension). Granted, you can get the same in the UK for almost nothing until you actually make money. But the 300€ is about the same as in Germany I believe and you get a big rebate in the first few years if you register as self-employed…

> Granted, you can get the same in the UK for almost nothing until you actually make money

You don't have to pay any National Insurance contributions (employer or employee) until your salary is above £153 per week. Although that's below the minimum wage for full time employees, as a director you can pay yourself what you want.

Re: At Spain’s Door, a Welcome Mat for Entrepreneurs

#19

Post by fauigerzigerk »

lucaspiller wrote: post #18
fauigerzigerk wrote: post #16

Earlier quoted context omitted.

I agree that the 300€ are a big turnoff initially, but it is not a self-employment tax. It's social security contributions and it entitles you to full health coverage (and eventually a pension). Granted, you can get the same in the UK for almost nothing until you actually make money. But the 300€ is about the same as in Germany I believe and you get a big rebate in the first few years if you register as self-employed…

> Granted, you can get the same in the UK for almost nothing until you actually make money You don't have to pay any National Insurance contributions (employer or employee) until your salary is above £153 per week. Although that's below the minimum wage for full time employees, as a director you can pay yourself what you want.

That's right, and on top of that you can create a limited company for a tiny fee with zero minimum capital requirements. The UK is pretty much ideal in that regard.

However, there is only one place in the UK for starting a startup and that place is London. Rent alone will cost you several times your Spanish social security contributions.

Re: At Spain’s Door, a Welcome Mat for Entrepreneurs

#20

Post by jsanzma »

mmind wrote: post #9
jsanzma wrote: post #2

Despite I think that the new law is a huge step forward for Spain, the visas are nothing if there are not an infrastructure behind it. SV has a huge investors network that Spain just doesn't have.

Actually this may improve soon as it looks that Google ventures is paying attention to the opportunity of investing in a country with great weather and high-qualified engineers: http://www.techrepublic.com/article/google-set-to-open-campu...

I think maybe it could be an option in several years... right now, as Spanish, I think it's not the best place to launch your start-up by far. We could consider the political atmosphere too, next year is gonna be the president election and the country could be unable to be managed...
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