The Crea y Crece Act (Create and Grow Act), a Spanish government initiative to encourage business creation and growth, has completed its first year in force with positive results.
The Act, which took effect on 28 September 2022, has had a significant impact on the business climate in Spain. Business creation has risen by 20% over the past year, and the number of self-employed workers has grown by 15%.
Crea y Crece has introduced a range of measures to make it easier to start and grow a business, including:
- Reducing the minimum share capital required to form a limited liability company (SL) from 3,000 euros to 1 euro.
- Simplifying the procedures for setting up a company, which can now be completed online.
- Improving access to financing for businesses, with the creation of new financing instruments as alternatives to bank lending.
- Tackling late commercial payments, a serious problem for Spanish businesses.
Positive Results
The results of the Act are already visible. Over the past year, more than 200,000 new businesses have been created in Spain, and the number of self-employed workers has grown by 150,000.
These results are due in part to the measures introduced by the Act, which have made it easier to start a business and access financing.
Success Stories
Among the success stories under Crea y Crece are the following:
- A technology company that developed a new mobile app for business management. It received financing under the Act, which enabled it to launch the app and create 10 new jobs.
- A consumer goods company that launched a new line of eco-friendly products. It received training and support, which allowed it to develop the line and reach new markets.
- A services company that expanded into new international markets thanks to advice on foreign trade.
There Is Still Work to Do
Despite the positive results, the Act still faces some challenges. One of the main ones is the need to improve entrepreneur training. Another is the need to reduce the red tape involved in starting and growing a business.
Outlook
The Spanish government plans to continue with Crea y Crece in the coming years. The Act has become a key tool for driving entrepreneurship and business competitiveness in Spain.
Analyzing the Results
The results are positive, but they should be interpreted with caution. The rise in business creation is due to several factors, including the economic recovery following the pandemic and other measures supporting entrepreneurship, such as the Recovery, Transformation and Resilience Plan.
At Ecofin, we recommend improving entrepreneur training, reducing the red tape involved in starting and growing a business, and promoting investment in innovative companies as keys to giving the Act an even greater impact.