Last week I had a meeting with Marius and Paul of Viajeuro.com a Canadian Startup Company that has decided to launch its products initially in Spain the Spanish market.

Spain continues to provide a great market opportunity for foreign IT companies and investors.  When we started in 2008 the idea of entrepreneurship and startups was still in its early stages in Spain, but now it seems to enjoy a thriving industry with many entrepreneurs and amazing ideas.

However one thing still amazes and holds back foreign investors and entrepreneurs.  That’s the red tape and the bureaucracy involved in setting up a company in Spain and the expenses involved for running and employing staff.

In fact, I know of many other startups in similar situations, where they would like to employ and have the need for it, but with unfavourable unemployment law and the non-applicable bankruptcy laws, they find it hard to justify the expense and resort to outsourcing.   The result is that more money leaves Spain and less work is completed in Spain.

With unemployment at record high reaching 24.63%, you would have thought that
the Spanish government would provide better incentives.  Foreign owned companies with knowledge and contacts have setup teams in India, China or even South America.  This is not to mention the huge black market where many self employed have had to resort to working black as the Social Security costs are too high to justify working within the legal framework.

Unless the  government adjusts the Social Security fees and makes them more affordable to employ and become self employed, it risk losing even more, creating a black market with even a weaker economy and less prospective of any recovery.

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