I recently read in The Economist that it had become more difficult to do business in Spain than previously. So I have just confirmed the facts with DoingBusiness.org co-sponsored by the World Bank . It appears that in nearly every way (other than paying taxes!) it is getting more difficult in Spain. Out of 183 economies surveyed, Spain has now fallen to 147th for the difficulty of starting a business – just 36 from the bottom! As far as I can make out this puts it below all “rich” countries including Equatorial Guinea and Greece.
One of the problems we suffer is being owed money in Spain by companies and individuals who seem to take a distinctly cavalier attitude (actitud arogante) to paying their debts. We have discussed the situation with lawyers and debt collectors (cobradores) and there doesn’t seem much that anyone can do to legally collect a debt from a company that says they can’t pay, won’t pay. I suppose the same is true in the UK but the margins on Spanish discount courier work are very slim and it can take €80,000 of turnover to make up a €10,000 bad debt.
So, those courier parcel customers in Spain who have failed to pay are clearly pushing up the costs for other people, we have to recoup somewhere. And they are forcing us, at least, to become less trusting to new clients and therefore restricting the amount of business that those companies can take on. It is, I suppose, a vicious circle and not unlike the mortgage, CDS and junk bond fiasco that brought down a couple or more banks and may yet bring down a couple or more currencies.
Anyone else who has experience of getting paid in Spain, please help, all advice welcome. In the mean time we are not granting credit to any new customers without a deposit and we are shrinking the business rather than expand into unprofitable markets. Our core internet courier and Citibox office business is unaffected. I recently had the priviledge of seeing the Guardia Civil excecute a bit of summary justice on a Spanish local who was being quite unecessarily difficult about running into the back of my wife’s car (demanding compensation for an accident of his own fault). I wonder whether the Spanish State would allow them to do a little private business after hours?