Why has Catalonia become a nightmare for business owners?

Catalonia has faced a series of obstacles for years that significantly complicate business development and growth. Although the region remains a key economic engine, the climate for entrepreneurs and companies presents numerous difficulties. These problems, ranging from bureaucracy to taxation, create a landscape that many business owners describe as a true hell.

One of the main obstacles identified in Catalonia is bureaucratic sluggishness. According to data from the World Bank collected in the latest edition of its "Business Surveys," Catalan business owners take an average of 93 days to obtain an activity license. This period is much higher than the national average, which stands at 65.8 days. In addition, the wait to collect payment for a public contract reaches 80 days, also above the national average. These delays represent a burden for companies, which see their projects and liquidity slowed down.

Bureaucracy is also especially burdensome and complex. Organizations such as FERA report that the administrative framework in Catalonia, with more than 2,250 public entities and a fragmented structure, is highly inefficient. This framework makes it difficult for companies to speed up procedures and quickly adapt to market needs. Business associations such as CECOT and Foment del Treball have called for an urgent simplification of administrative processes.

Examples of excessive bureaucracy are numerous and often illustrative of the problem. Catalan business owners have reported that opening a supermarket can take up to eight years due to administrative procedures. Even foreign companies, with resources to negotiate and exert pressure, choose to delay or cancel projects because of these difficulties, as recently happened with a South Korean factory that postponed its installation by two years.

Then there's taxation

On top of these bureaucratic hurdles is the tax burden, which is especially high in Catalonia. The autonomous community has eleven of its own taxes, a figure higher than any other region. This situation worsened after the pandemic, with the elimination of tax breaks and the introduction of multiplying coefficients in some taxes.

This scenario contrasts with that of the Community of Madrid, which keeps a more attractive tax policy for companies. This territorial competition in tax matters generates political tensions and is one of the main current debates between PSC and its rivals. In this regard, Salvador Illa has made it clear that reducing taxes is not in his plans.

In short, the combination of a slow and fragmented public administration, high tax pressure, and certain deficiencies in the labor market put Catalonia in a complicated position for business development. These difficulties affect both large companies and, even more severely, small and medium-sized enterprises, which are the essential engine of the regional economy.