Stifling bureaucracy: SMEs in Spain struggle for their survival and growth.

The current situation of small and medium-sized enterprises (SMEs) in Spain seems to be marked by an unavoidable reality: the bureaucratic overload faced by these entities is affecting their capacity for growth and sustainability. With nearly 90% of the country's business fabric made up of SMEs, the way regulations are managed plays a crucial role in their operational efficiency. However, the existing bureaucracy often becomes an insurmountable obstacle for many entrepreneurs. Ricard Gené, a partner at the law firm La Guard, has highlighted that SMEs are often forced to consider the possibility of not complying with all regulations. This reflection underscores the disheartening reality: small businesses lack the human and economic resources necessary to cope with the avalanche of regulations imposed on them. Although some regulations apply exclusively to larger companies, the absence of more appropriate categorization for SMEs results in an environment that penalizes their existence rather than promoting their development. Among the most demanding regulations are tax and labor laws. According to experts, these have the most direct impact on SMEs. The obligation to maintain a record of working hours, comply with equality plans, and deal with new data protection regulations are just some of the many burdens they must bear. For many small businesses, this reality translates into a monumental effort to achieve profitability, while regulatory compliance becomes a source of stress and exhaustion. Javier Berrocal, a lawyer at Santiago Mediano Abogados, shares his concern about the growing pressure SMEs face in terms of compliance. He states that the Labor Inspectorate and the Tax Agency are constantly operating, creating a climate of uncertainty that can become overwhelming. This rigid regulatory framework, which favors severe controls and penalties, represents a burden that many small businesses simply cannot bear. While large corporations can absorb these costs, SMEs find themselves at a disadvantage that can jeopardize their stability. In this context, entrepreneurs are forced to adapt and professionalize to ensure competitiveness. Rafael Viñals, a partner at GRA Consultores, points out that the only viable way for some SMEs might be outsourcing compliance activities. However, this solution poses its own challenges, as the cost of hiring external advisors can be prohibitive for many. The reaction of business owners to this situation reflects their ambitious nature. Each new law that emerges is perceived as an additional obstacle in their path, although the reality is that many end up accepting this burden as part of their daily routine. Nevertheless, the risk of trying to manage legal controls internally is considerable, leading some to delegate these responsibilities to experienced professionals, often done too late. Regulatory pressure becomes even more critical when it comes to growth. Berrocal mentions that many entrepreneurs think twice before considering increasing their workforce beyond 30 employees, as surpassing the threshold of 50 employees entails a significantly greater regulatory burden. This situation can limit the growth of entire sectors, with agriculture being one of the most affected. Moreover, the Public Administration, which should facilitate regulatory compliance, often finds itself overwhelmed and lacking resources. This negatively impacts SMEs, which must take on self-regulation functions that should correspond to the administration. The consequence is clear: many small businesses are penalized for failing to meet requirements that do not even pertain to them. When addressing this issue, experts insist on the need to simplify regulations. Greater sensitivity from lawmakers towards the reality of SMEs is essential to achieve a balance that does not hinder their growth. The solution does not lie in eliminating controls but in rationalizing them and making them more accessible, avoiding an unsustainable burden. Finally, it is vital for authorities to recognize the impact that current regulations have on small and medium-sized enterprises. Creating a more unified and less bureaucratic regulatory framework could be a decisive step in helping this sector, which is fundamental to the country's economy. SMEs require an environment that allows them to develop without the constraints of excessive regulation, as ultimately, their success positively impacts economic growth and job creation.