ONE COUNTRY ONE LICENSE, NOT SEVENTEEN

Money Matters

 

Local and foreign investors have been complaining that a company has to contend with 17 different regional laws to operate nationwide. Spain may not be a federal state but it is highly decentralized and fragmented by 17 autonomous regions with their respective sets of laws and regulations on economic activities.

As a result, a company may have to have 17 different licenses or manufacture 17 different models of a single product to meet regional requirements, thereby undermining the constitutional precept that all goods and services should be allowed to circulate freely around the country.

South African stand at a recent trade fair in Madrid.

South African stand at a recent trade fair in Madrid.

But now, at last, the central government is putting an end to the anomalous situation. This summer the Ley de Garantía de Unidad de Mercado (Law that Guarantees Market Unity) is expected to go into effect.

Broadly speaking, under this new law a company will need just one license to operate anywhere and everywhere in Spain. A license that is obtained in one region to, say, manufacture a product, will be valid in the rest of the other regions.

As of now a construction company headquartered in one region could find itself barred from bidding for public works in another unless it has a branch there. With the single-license regime, that will no longer be the case. Or, rather, that’s what the new regime will IDEALLY bring about.

Companies, specially the small and medium that need/want to expand, are waiting to see what will ACTUALLY happen come summer.