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Ease of Doing Business in

Spain

Spain Download Profile (1780.2KB, pdf)
Region OECD high income
Income Category High income
Population 46,418,269
GNI Per Capita (US$) 28,520
City covered Madrid

190

1

DB 2017 Rank

1

100

DB 2017 DTF (% points)

  • local_library
  • group
Topics DB 2017 Rank DB 2016 Rank info_outline Change in Rank DB 2017 DTF (% points) info_outline DB 2016 DTF (% points) info_outline Change in DTF (% points) info_outline
Overall 32 33 up
1
75.73 75.02 down
0.71
Starting a Business 85 79 down
6
86.61 86.30 up
0.31
Dealing with Construction Permits 113 111 down
2
65.95 65.89 up
0.06
Getting Electricity 78 71 down
7
72.99 72.96 up
0.03
Registering Property 50 50
-
73.88 73.88
-
Getting Credit 62 60 down
2
60.00 60.00
-
Protecting Minority Investors 32 30 down
2
65.00 65.00
-
Paying Taxes 37 45 up
8
83.80 82.74 up
1.06
Trading across Borders 1 1
-
100.00 100.00
-
Enforcing Contracts 29 36 up
7
69.48 67.63 up
1.85
Resolving Insolvency 18 25 up
7
79.62 75.83 up
3.79

Positive= Doing Business reform making it easier to do business.Negative= Change making it more difficult to do business.

DB 2017 Rank: 18

DB 2016 Rank: 25

Change in Rank: up7

DB 2017 DTF (% points): 79.62

DB 2016 DTF (% points): 75.83

Change in DTF (% points): up3.79

Indicator Spain OECD high income
Recovery rate (cents on the dollar) info_outline 78.3 73.0
Time (years) info_outline 1.5 1.7
Cost (% of estate) info_outline 11.0 9.1
Outcome (0 as piecemeal sale and 1 as going concern) info_outline 1.0 1
Strength of insolvency framework index (0-16) info_outline 12.0 12.1
  • Indicator Explanation Answer
    Recovery rate (cents on the dollar) 78.3
    Proceeding Mirage will file for insolvency proceedings (declaración de concurso) and would seek to reach a reorganization agreement with its creditors. One of the main advantages of this option is that once the “concurso” commences, all enforcement actions against the debtor would be automatically suspended for at least a year. The Insolvency Act provides a unitary form of insolvency proceedings (procedimiento concursal) which has a common phase and two possible outcomes: (i) reorganization (convenio de acreedores) or (ii) liquidation. The law will also set forth all assumptions on which the reorganization proceeding could be converted into liquidation. reorganization
    Outcome The hotel will continue operating as a going concern given the financial well-being and viability of the company. While most insolvency proceedings (concursos) in Spain ended up in liquidations, in the case at stake a liquidation proceeding would not make much sense since the market value of the operating business is much greater than the value of its assets sold separately. Therefore, the possibilities to fetch market value in a reorganization proceeding are greater than in a liquidation proceeding. going concern
    Time (in years) An abbreviated insolvency proceeding before the commercial Court of Madrid will last 1.5 years (art. 190 LC). Once the insolvency proceeding commences, the appointment of the insolvency administration and the publication of the procedure will last about 1 month. After that, the preparation of creditors’ claims and the report of insolvency administration will happen in a period of 6 months (the creditors have a month to submit their claims and the insolvency administration must review the documentation and accept or reject the claims). This estimate includes the time spent by the insolvency administration in resolving all challenges. Following publication of the report by the insolvency administration, it will take approximately 3-6 months for the debtor to prepare and negotiate the reorganization agreement with the creditors, which will be voted a month after it is admitted by the Commercial Court. Assuming that the agreement is approved by the creditors' meeting, the court would ratify the agreement and the secured creditor would start receiving payments. 1.5
    Cost (% of estate) The costs associated with the reorganization proceeding would amount to approximately 11% of the value of the estate according to our estimate. The main component of this expenditure would be the attorney’s fees (4 - 7%), Insolvency representative fees (3.5%), Trustee (0.5%) cost of service and publication in the Official Gazette (0.2%). 11.0
    Answer Score
    Strength of insolvency framework index (0-16) 12.0
    Commencement of proceedings index (0-3) 3.0
    What procedures are available to a DEBTOR when commencing insolvency proceedings? (a) Debtor may file for both liquidation and reorganization 1.0
    Does the insolvency framework allow a CREDITOR to file for insolvency of the debtor? (a) Yes, a creditor may file for both liquidation and reorganization 1.0
    What basis for commencement of the insolvency proceedings is allowed under the insolvency framework? (a) Debtor is generally unable to pay its debts as they mature 1.0
    Management of debtor's assets index (0-6) 6.0
    Does the insolvency framework allow the continuation of contracts supplying essential goods and services to the debtor? Yes 1.0
    Does the insolvency framework allow the rejection by the debtor of overly burdensome contracts? Yes 1.0
    Does the insolvency framework allow avoidance of preferential transactions? Yes 1.0
    Does the insolvency framework allow avoidance of undervalued transactions? Yes 1.0
    Does the insolvency framework provide for the possibility of the debtor obtaining credit after commencement of insolvency proceedings? Yes 1.0
    Does the insolvency framework assign priority to post-commencement credit? (b) Yes over ordinary unsecured creditors but not over secured creditors 1.0
    Reorganization proceedings index (0-3) 2.0
    Which creditors vote on the proposed reorganization plan? (c) Other 1.0
    Does the insolvency framework require that dissenting creditors in reorganization receive at least as much as what they would obtain in a liquidation? No 0.0
    Are the creditors devided into classes for the purposes of voting on the reorganization plan, does each class vote separately and are creditors in the same class treated equally? Yes 1.0
    Creditor participation index (0-4) 1.0
    Does the insolvency framework require approval by the creditors for selection or appointment of the insolvency representative? No 0.0
    Does the insolvency framework require approval by the creditors for sale of substantial assets of the debtor? No 0.0
    Does the insolvency framework provide that a creditor has the right to request information from the insolvency representative? No 0.0
    Does the insolvency framework provide that a creditor has the right to object to decisions accepting or rejecting creditors' claims? Yes 1.0

Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice”.