How long should a citizen have to wait before being allowed to create a firm? The question sounds administrative, but it is fundamentally economic and political. A new firm is not merely a registration in a government database. It can become a workplace, a source of income for a family, a competitor that forces established firms to improve, or the first opportunity for someone who has been unemployed to enter the labor market. When the state makes entry unnecessarily slow, expensive, or uncertain, the cost is therefore borne not only by the entrepreneur standing at the administrative counter. It is also borne by people whose jobs, wages, products, and opportunities may never come into existence.
Spain offers an especially useful case because two apparently contradictory statements are now true. The country has made substantial progress in digitalizing company formation, and it would be inaccurate in 2026 to repeat the old claim that opening an ordinary Spanish company necessarily requires three months. The Spanish government’s CIRCE one-stop system states that company formation through its electronic process can be completed in roughly one to ten days, depending on whether standardized articles and deeds are used, while the government’s ONE platform describes an approximate processing period of around 24 hours for its company-creation procedure. At the same time, recent OECD evidence continues to identify Spain’s broader administrative and regulatory burden as a significant obstacle to the creation and growth of firms. The important policy question is therefore no longer simply how many days it takes to obtain one registration. It is how much administrative friction an entrepreneur must overcome before a business can enter, operate, hire, and grow.
Economic Freedom and the Right to Enter a Market
The latest Economic Freedom of the World report available by May 2026 provides useful context. Using 2023 data, the Fraser Institute ranked Hong Kong first, Singapore second, Switzerland fourth, the United States fifth, Ireland sixth, and the Republic of China on Taiwan joint seventh. Spain was twenty-first. These rankings measure much more than business registration, but that is precisely the point: economic freedom is an institutional system involving property rights, sound money, freedom to trade, regulation, and the scope individuals have to make economic choices without unnecessary coercion.
It is tempting to turn this ranking into a simple claim that every highly ranked economy allows a company to open in fewer than seven days. The evidence does not support such a sweeping statement. The last globally standardized World Bank Doing Business series was discontinued in 2021, so its final comparable start-up-time observations refer to 2019 rather than 2026. In that dataset, Singapore and Hong Kong required about 1.5 days, the United States 4.2 days, and several other advanced economies were also very fast: Denmark and Estonia 3.5 days, France and Norway 4 days, the United Kingdom 4.5 days, and Portugal 6.5 days. But Switzerland was recorded at 10 days, Ireland at 11, Spain at 12.5, and the Republic of China on Taiwan at about 10 days under the World Bank’s standardized methodology. The World Bank itself warns that this discontinued indicator measured a standardized limited-liability company and should not be confused with the experience of every real entrepreneur.
More recent administrative information also shows why historical comparisons should not be presented as current processing times. The Republic of China government’s current company-registration service lists one working day for company-name and business-scope reservation and one working day for establishment registration once a complete application is submitted. Spain’s CIRCE system similarly reports a one-to-ten-day range for the integrated electronic process. Digitalization has changed the administrative frontier considerably. A serious comparison in 2026 must acknowledge these reforms rather than repeat an outdated figure simply because it supports a convenient political argument.
Spain Has Improved, but Registration Is Only the Beginning
The correction matters. I initially approached this question with the common impression that creating a company in Spain could require roughly three months, with somewhat shorter periods in Madrid. Current official evidence does not justify presenting those numbers as the normal legal processing time for an ordinary company created through CIRCE. Spain deserves credit for the reforms that made company formation faster, including the use of the Documento Único Electrónico and the integration of more than twenty-five administrative forms into a single system.
Yet fast incorporation does not mean that Spain has solved its business-regulation problem. The OECD Economic Survey of Spain 2025 finds that regulatory complexity and administrative costs continue to fall disproportionately on small firms. It identifies more than one hundred regulations linked to firm-size thresholds in areas such as accounting, labor, finance, and taxation. The OECD argues that these regulatory cliffs can discourage hiring and growth, limit economies of scale, and weaken investment and productivity. It also notes that the 2022 Create and Grow Law and the Start-up Law appear to have reduced some long-standing barriers, with new company formations rising by about 10 percent on average in 2023 and 2024, although a full evaluation requires more evidence.
This distinction between incorporation and operation is essential. An entrepreneur does not create employment merely by obtaining a registration number. The firm must be able to find premises, comply with sectoral requirements, hire workers, pay taxes, obtain permits where necessary, manage reporting obligations, and adjust when market conditions change. A country can therefore have a relatively efficient electronic registration portal while still imposing a cumulative regulatory burden that discourages some firms from entering and others from expanding.
The Firms That Employ Spain
The social importance of this question becomes clearer when we look at who actually provides employment. According to Spain’s Ministry of Industry and Tourism, Cifras PYME for April 2026, Spain had 2,956,165 SMEs compared with only 6,408 firms employing 250 or more workers. In other words, virtually the entire Spanish business population consists of SMEs. More importantly, SMEs accounted for 11,642,843 jobs in the ministry’s business-employment measure, compared with 7,664,133 in large firms. Small and medium-sized businesses are not a marginal part of the labor market; they are one of its foundations.
The distribution within the SME sector is equally revealing. In April, microenterprises accounted for about 3.47 million jobs, small firms for 3.55 million, and medium-sized firms for just over 3 million, while self-employed businesses without employees represented another 1.61 million own-account jobs. These numbers should change the way we discuss regulation. A rule that appears minor from the perspective of a ministry or a large corporation can be significant for a firm with three workers, one accountant, limited cash flow, and an owner who must personally spend time understanding every new administrative obligation.
Spain also continued to face substantial labor-market challenges. Registered unemployment fell to about 2.36 million at the end of April 2026, while total Social Security affiliation reached a record level above 22.1 million. That progress is welcome. It does not make the opportunity cost of barriers to entrepreneurship irrelevant. For a country that still has a comparatively high unemployment rate and pronounced regional differences in employment opportunities, every unnecessary obstacle to business entry or expansion deserves serious scrutiny.
Can We Count the Jobs Bureaucracy Prevents?
It would be attractive to attach a single number to the jobs that Spain has lost because of bureaucracy. I have not found credible evidence that allows us to say, for example, that a particular number of Spanish jobs would exist today if company formation were two days faster. Such a claim would require a causal model separating entry regulation from taxation, labor regulation, financing conditions, skills, demand, technology, sectoral composition, and many other determinants of employment. Inventing a precise figure would make the argument look stronger while actually making it less scientific.
What we can say is supported by a substantial literature. Djankov, La Porta, Lopez-de-Silanes, and Shleifer’s study in The Quarterly Journal of Economics compared entry regulation across 85 countries and found that heavier regulation was associated with greater corruption and larger unofficial economies, without corresponding improvements in the quality of public or private goods. Their findings were more consistent with a public-choice interpretation of regulation than with the idea that heavier entry controls simply serve the public interest.
A later European firm-level study by Klapper, Laeven, and Rajan found that costly entry regulations hamper the creation of new limited-liability firms, particularly in industries that would otherwise have naturally high entry rates. The authors also found effects on entrant size and the growth of incumbent firms. This is exactly why administrative barriers should not be dismissed as paperwork: they can alter which businesses are born and how resources move through an economy.
OECD research on business dynamics likewise finds that higher firm-entry rates tend to coincide with faster productivity, output, and employment growth, particularly in dynamic service sectors. More recent OECD work on Spain emphasizes that firm entry, growth, exit, and employment reallocation contribute not only to productivity but also to inclusive job creation, including opportunities for disadvantaged groups. The empirical literature does not imply that abolishing every rule creates prosperity. It does imply that the design and cost of entry regulation have real economic consequences.
Public Choice: Bureaucracy Is Not Institutionally Neutral
Public Choice helps explain why inefficient regulation can survive even when its social costs are substantial. Buchanan and Tullock’s constitutional political economy asks us to analyze political decision-makers with the same realism applied to market participants. Politicians, administrators, incumbent firms, professional groups, and voters respond to incentives. A regulation can impose small, dispersed costs on thousands of potential entrepreneurs while delivering concentrated benefits to organizations that already possess the legal departments, experience, or political access necessary to navigate it.
This does not mean that every civil servant favors bureaucracy or that every business regulation is a product of rent-seeking. Some rules protect property rights, prevent fraud, provide reliable company registries, internalize genuine externalities, or establish predictable standards that can make markets work better. The relevant liberal question is not whether regulation should exist, but whether a particular intervention produces benefits sufficient to justify the costs it imposes on peaceful entry and exchange.
The distinction is especially important because incumbent firms and potential entrants do not face administrative costs symmetrically. A large established corporation can spread compliance costs over thousands of employees and millions of euros of revenue. A prospective entrepreneur must bear those costs before knowing whether the first customer will arrive. Entry barriers can therefore protect existing market positions without ever being formally described as protectionism.
Economic Freedom Is a Social Question
This is where the debate about economic freedom often becomes unnecessarily narrow. Economic freedom is sometimes described as if it were principally a concern of wealthy entrepreneurs or corporations. In reality, the people who may suffer most from barriers to enterprise are often those who own no company at all. They are workers who need someone to create a job before they can apply for it.
A person with substantial savings can survive months without employment. A young worker, a recent immigrant, a single parent, or someone from a low-income household may have far less room for error. When a new restaurant, workshop, logistics company, consultancy, retailer, or technology firm fails to open because the expected return no longer compensates for the regulatory cost and uncertainty, the entrepreneur loses an investment opportunity, but potential workers lose something different: a chance to earn income and acquire experience.
The same logic applies to the middle class. Competitive entry creates alternative employers and therefore increases the options available to workers who are dissatisfied with their present jobs. New firms also put pressure on incumbents to improve products, wages, organization, and working conditions when they compete for customers and employees. Economic dynamism is therefore not merely about helping someone become an owner; it affects the bargaining environment of people who expect to remain employees throughout their careers.
This is why I find the claim that economic freedom has little to do with politics or public policy difficult to understand. Property rights are legal institutions. Taxes are public policy. Occupational licensing is public policy. Company law is public policy. Labor regulation is public policy. The time and cost required to enter a market are shaped by political decisions. Economic freedom is not outside politics; it concerns the institutional boundaries within which political power may constrain voluntary economic action.
What Spain Should Aim For
The objective should not be a competition to eliminate every administrative procedure. A credible company registry, protection against fraud, transparent taxation, enforceable contracts, and proportionate health, safety, and environmental standards can reduce transaction costs and support rather than undermine markets. The appropriate standard is whether government makes lawful entrepreneurial activity as simple as possible while preserving rules that protect clearly defined rights and legitimate public interests.
Spain’s recent reforms show that improvement is possible. CIRCE has already reduced the time required for incorporation, and that progress should be recognized. The next stage is broader: simplifying overlapping obligations across levels of government, reducing regulatory fragmentation, reviewing firm-size thresholds that discourage hiring, improving the predictability of rules, and ensuring that digitalization eliminates procedures rather than merely moving old bureaucracy onto a screen.
The international comparison should also be used intelligently. Singapore, Hong Kong, the United States, the Republic of China on Taiwan, Switzerland, Ireland, and the economically freer European countries do not all use the same legal institutions, tax systems, or welfare states. Nor do they all register companies in fewer than seven days under every methodology. What many successful economies demonstrate instead is that prosperity is compatible with treating market entry as something institutions should facilitate rather than something citizens must repeatedly justify to the state.
The Opportunity We Do Not Observe
The most difficult cost of bureaucracy to measure is the opportunity that never becomes visible. We can count the company that registers, the worker it hires, and the taxes it pays. We cannot easily count the entrepreneur who abandons an idea after calculating the time, uncertainty, compliance costs, and future regulatory obligations. We cannot observe the worker who would have been hired by that nonexistent firm or the customer who would have benefited from its competition.
That invisible margin is why business-entry policy deserves more attention than its administrative appearance suggests. Spain has already shown that the formal incorporation process can be accelerated, so the old image of an entrepreneur necessarily waiting three months to create an ordinary company is no longer an accurate description of the national system. The more demanding task is to make the entire institutional environment hospitable to entry, experimentation, hiring, growth, and, when an entrepreneurial judgment proves wrong, orderly exit and reallocation.
Economic freedom should ultimately be judged not by whether it makes life comfortable for existing businesses, but by whether ordinary people remain free to try. A society that makes entrepreneurship easier does not guarantee that every firm will succeed. It does something more modest and more important: it allows more people to discover whether their ideas can serve others. For millions of workers, including people with modest incomes and members of the middle class, somebody else’s freedom to create a firm may become their own opportunity to find a job, improve their income, and build a more independent life.
Suggested References
• Fraser Institute. (2025). Economic Freedom of the World: 2025 annual report.
• OECD. (2025). OECD Economic Surveys: Spain 2025.
• OECD. (2026). Entrepreneurial Ecosystem Diagnostics of Spain.
• Ministry of Industry and Tourism of Spain. (2026). Cifras PYME: April 2026.
• World Bank. (2020). Doing Business 2020.
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How to Cite this Article (APA 7th edition)
Wang, H. H. (2026, May 23). How long should it take to start a business? Economic freedom, bureaucracy, and the jobs Spain never sees. https://williamhongsongwang.com/2026/05/23/how-long-should-it-take-to-start-a-business-economic-freedom-bureaucracy-and-the-jobs-spain-never-sees/
