When a foreign entrepreneur decides to embark on the adventure of starting out in Spain, there are a series of strategic decisions that will have a positive or negative influence on his investment.
In the experience of Certus, leaving aside everything related to the selection of the market and obtaining the necessary financing that must have been part of the preliminary analysis to the decision making of the execution of the project, among the most common errors and of greatest importance in this sense we usually find the following:
1.- Bad decision in the choice of the corporate vehicle and the partner.
There are different ways of starting up a business in Spain, both from a subjective point of view and from the point of view of the corporate vehicle that serves as the legal structure on which to establish the business. It is important in the first place if you are going to start the voyage by means of a local partner (not obligatory unlike other countries), for which you will have to make an exhaustive selection that allows us to select the ideal candidate, or if you are going to start without any partner. The type of business and the entry restrictions will be those that fundamentally mark the decision.
Likewise, the choice of the corporate vehicle is of vital importance. This will depend fundamentally on the type of business and the structure required, being able to choose from the initial entry of a self-employed entrepreneur to the constitution of a branch, or of a capital company or other type of entities that adjust to the characteristics of the investment. An error in the choice of the local partner may condition the investment and an error in the choice of vehicle may mean having to transform the initial vehicle chosen into the ideal one, which may delay the investment growth plans, regardless of the cost that this transformation may entail.
2.- Bad choice of business location: physical and local (facilities and licenses).
It will depend on the type of business, but the truth is that the physical location is very relevant to the success of the business. Whether it is simply because for workers having offices in a pleasant area, or in a central area, or having a good offer of services, transport facilities or parking is a matter of vital importance or with greater reason for the suitability of the location itself in terms of customers and / or the image that the company should project to the public.
Similarly, the choice of premises requires a prior legal and technical analysis insofar as, on the one hand, it is essential to ensure that the premises are legally suitable for the development of the intended business and, on the other, to guarantee that the electrical installations, acclimatisation and systems are sufficient for the requirements of the particular business to be developed. An error in the choice of location may imply an additional cost of early termination of the lease with the cost that this entails, as well as the discomfort for the team of having to be in a situation of moving from one place to another and all this impairs the development of the investment.
3.- Temptation to apply for aid and subsidies without sufficient information
Any aid and/or public subsidy in Spain due to a history of mismanagement and misuse of public funds involves an enormous administrative effort on the part of the applicant, both at the time of the application when preparing the necessary documentation and at the time of justifying the destination of the aid, and this requires the provision of sufficient specific resources to meet the obligations arising from the granting of the aid.
An error in the management of the application or in the management of the aid may imply that the aid is not granted, or even worse, the initiation of a file for repayment of the aid which implies the requirement by the administration of the entire amount of the aid and/or subsidy granted plus interest and surcharges.
4.- Pre-screen the selection of talent
In most cases, foreign clients who contact Certus do so in order to set up IT departments of their foreign parent companies in Malaga. In these cases, it is highly recommended that the investor has assured himself that he will be able to attract the professional talent required for the development of his activity.
Malaga offers a pool of highly qualified engineers in general for this type of companies, but it is true that when the technical profile required by these companies is very specific it is necessary to have previously tested the market to see if such profiles are offered. Otherwise the truth is that the qualities of Malaga to live are a great attraction that facilitates the attraction of talent from outside Spain.
An error in the selection of the talent can imply a damage to the investment and a delay in the development of the project.
5.- Not being well informed and/or advised
Perhaps the most common mistake when starting a project in a foreign country is not to be accompanied by adequate advice not only in relation to the different decisions that the entrepreneur must make but also in relation to the team of suppliers of goods and services that accompany him in the development of his project.
In this sense there are always organizations willing to facilitate the work of softlanding as may be the case of Promálaga that can offer specific solutions for each project. Also, it is very useful to know the experiences of other entrepreneurs from the same country as the investor partner, so that they can know first-hand their experiences in the implementation, the mistakes and successes of those who can learn and the practical advice that can provide.
It is important to highlight the importance of good service providers, both technical (electrical installations and networks) and professional (legal, tax, accounting, labour…). The success of the investment depends to a large extent on them and it is therefore essential that they have proven experience, adequate professional quality, knowledge of English as a business communication language and, above all, excellent customer service.