Administrative paperwork costs 9,400 million to Canarian companies

The Tenerife employers’ association (CEOE) has prepared a study in which it quantifies the bureaucratic burden for Canarian companies in 9,446 million euros, resources that stop earning or investing.

These figures show the difficulty that any entrepreneurial person faces. The huge amount of paperwork for the start-up business and regulatory costs The ones they have to face once they are created represent one of the biggest obstacles for the gestation of entrepreneurial projects. In fact, Spain is the seventh country in the EU that establishes the most obstacles to opening a business. And the Canaries is at the tail, sentence the Canarian employers.

Regardless of the economic activity that is carried out, the bureaucratic burden in the Canary Islands is focuses on micro-SMEs, which highlights the cost that this type of company must face, expenses that are reduced as their size increases. Companies with more staff have the human and capital structure to face the series of administrative and bureaucratic obligations, either to manage them internally or outsource the service to specialized consultancies, which is what small companies usually do when faced with any paperwork.

The bureaucratic cost is measured not only in opening a business, file management, being attentive to regulations, but also in the time invested. This is how J needs itOsé Antonio González, Director of Consulting at Corporación 5, which is the firm that is in charge of the CEOE-Tenerife situation reports. “The bureaucracy itself is not bad because you have control over public resources,” he says, but there is an excess of regulations that generate insecurity for those who have to apply them, and that is when the files get bogged down because reports are requested for any processing and everything takes time.

According to the study they have carried out, the Canary Islands, for example, need a average of 142 days to obtain the construction license and 177 days to obtain the electrical connectionamong many other issues.

Sectors

In terms of economic activity, the highest regulatory costs are in agriculture and construction. In the agricultural sector, the bureaucratic framework is shown from compliance with food safety of crops to the use of technologies for planting and its treatment. Paperwork costs mainly affect micro-SMEs (with up to nine employees), which have spent 1,440 million in transactionscompared to 55 million euros for medium-sized companies (from 10 to 249 employees), and 39 million for large companies (more than 250 workers).

The economic activity of construction faces bureaucratic burdens ranging from energy efficiency to administrative processes prior to the execution of the construction or the of occupational hazards, given the level of security that this sector requires. Small companies have invested 1,205 million of their money in bureaucratic burdens, medium-sized ones, 46 million, and large ones, 33 million.

With an eye on the elections of May 28, The business confederations of Las Palmas and Tenerife demand from the administrations that are elected after the elections that one of their main tasks must be, imperatively, a deep restructuring of the administration to give it agility, and they call into question the teleworking of officials at a time, after the pandemic, when files require speed.

According to José Cristóbal García, the excessive normative production and the quality of the norms are conditioning investment and have negative implications for companies that need legal certainty, clear, simple, stable regulations and consensus.

It is unfeasible that in the last four years more than 1,100 normative texts only at the regional level, exposes, through decree laws, decrees of the president, orders or resolutions. In 2019 they quantify 416; in 2020, 181; in 2021 there were 224 and in 2022, 284.

«It is one of the problems to attract investment, because we are going through a brutal level of legal uncertainty; In the end some rules coexist with others and there is no security », he remarks. Despite the fact that it is a reiterated demand, the administration reform to streamline the administrative bureaucracy “has not been done; The Canary Islands follow the tail and Spain too. We are not improving and here the officials want teleworking », he censures.

In the opinion of the CCE, it is necessary to change towards a new model of public administration and with uniform and clear legislation. For entrepreneurs it has to bSearch for simplicity, a quick response to the citizenthe attraction of talent, the specialization in decision-making that affects key business areas, the maximum digitization of services and transparency.

Pedro Alfonsopresident of the CEOE-Tenerife, reflects that 9,400 million have remained in the windows of the administrations instead of in the productivity of the companies certifies the need for a profound transformation of the administration, and answers cannot be given as the teleworking of civil servants, but rather “putting officials to perform”, and that the Administrative Procedures Law be expedited, which is “cumbersome and does not allow the speed of licenses.”