Foreigners are starting their own businesses faster than Spaniards, according to new research. But, Graham Keeley asks, could this provoke a backlash from Spaniards?

Every year, increasing numbers of foreigners start businesses in Spain.

Whether it is opening a shop selling Marmite to homesick Britons or a bakery making ‘black bread’ for Germans, figures show a marked rise in foreign businesses.

Indeed, the foreign ‘invasion’ has now reached such a level that ‘extranjeros’ are now opening small businesses at a faster rate than Spaniards.

According to latest figures released by Spanish government, in the past year – from October 2003 to October 2004 – the number of foreigners who started their own firms rose by 17.9 percent.

Out of one million foreigners who are registered to work in Spain, 121,949 are now ‘autonomos’ or small businessmen.

Among these, just over half (54.7 percent, or 66,660) are from EU countries. They represent 11 percent of the foreign working population.

And that is only those who have registered here. There are thought to be many thousands more who run their own business but, perhaps, work as freelances for foreign companies and do not register.

Leading the charge have been the British, followed by the Germans and the Chinese.

Now 19,077 Britons run their own companies, followed by 13,166 Germans and 10,885 Chinese.

Significantly, the foreign business community is expanding at a faster rate than its Spanish counterpart.

For example, in Andalusia, in the past year to October, the number of Spaniards running their own firms per 100 inhabitants is 6.54, compared to 6.89 among foreigners.

Jose Luis Mejias, from Trans-Formando, a cooperative which helps foreigners start their own firms, said: “The profile of these business people is often those who left precarious jobs and had the courage to start a business of their own.”

The British and Germans have increasingly opened their own shops, foreign-language magazines or computer firms, mostly in areas of Spain where you find tourism and the need for residential care for the elderly from their own country.

The biggest rise has been in Catalonia, where there are 22,300 foreign ‘empresarios’ (businessmen), followed by Andalusia (19,666), Valencia (19,141) and Madrid (17,616).

The Canary and Balearic islands also have a high number of foreigners running their own businesses, with 13,359 and 10,379 respectively.

The obvious cultural, linguistic and bureaucratic difficulties they come up against, do not appear to deter these entrepreneurs.

Rodrigo Basco, the Argentinean president of the Association of Foreign Businessmen in Spain, says chief among these problems is it can take 3-4 months to change work permits, from a contractor’s to the kind needed by the self-employed.

This can cost business.

Another is the seemingly endless taxes and other payments foreigners must pay before they can simply open for business.

Basco said: “Here they pay for everything.”

Another problem is many are not well-trained businessmen.

But John Woodward, 48, a British businessman whose firm, Voyages Orsom, provides corporate team-building courses on boats from its base in Barcelona, believes it is much easier to start up a company now in Spain than in the past.

“When I started a language school five years ago, I would go into one of the ministries to ask questions and the reaction was ‘Oh, God a foreigner’,” says Woodward.

“Now they are much better prepared and most foreigners get ‘gestors’ (Spanish agents).”

But Woodward questions whether the arrival of so many foreign businesses might provoke a backlash from Spaniards.

Spain currently has the fastest-growing rate of immigration in Europe, with its attendant problems.

“Spain is going to be hit hard with immigration problems, especially when European laws allow foreign companies to employ foreigners in preference to Spaniards,” says Woodward. “It is a little bombshell.”

In September, protests against Chinese shoe firms in the south-east town of Elche turned nasty.

Protestors held banners reading ‘Chinese out’ and two warehouses owned by Chinese firms were set on fire.

The protests were sparked because Elche, the capital of the Spanish footwear industry, has been hit hard by Asian competition.

Many commentators, however, saw it as a symbol of rising tension between Spaniards and foreigners.

However, Basco says foreigners’ influence on Spanish economic life is only positive.

He argues many are re-opening businesses closed by retiring Spaniards and boosting trade.

“We are a dynamic influence on the economy to the benefit of all,” he says.

December 2004

Copyright Expatica 2004