Challenges to Barcelona’s Startup Scene

As you may have alread heard, Barcelona has a growing startup scene. This is the case because Barcelona is a city that offers a variety of favorable conditions for new businesses and independent workers who, after visiting the city and doing some research, end up choosing it as their new home. Some of those conditions include the fact that the cost of living in Barcelona is not very high, the fact that there is a constant flow of newly qualified labor fresh from some of the city’s most prestigious colleges, and an abundance of coworking spaces that can be rented for affordable prices.

Yet, as with any city, there are some limitations and challenges entrepreneurs must overcome. Some of these issues are slowly being dealt with. However, there are still many obstacles that entrepreneurs will have to find a way around. This article will highlight a few challenges and possible solutions.

Spanish Paperwork

On the top of the list of challenges for local entrepreneurs is that Spain is one of the most difficult countries in the EU to set up a company in. This is largely due to the bureaucracy and relatively high taxes involved. For example, if you wish to become a freelancer or ‘autonomo‘, you’ll have to pay a monthly fee of over €250 a month for social security as well as taxes of 20% or higher. If you’re under 30 years old, you will pay less for social security for the first 2 years, ranging from 50€ to 200€. If you wish to register your company, the process will be more costly.

The most common alternative is simply not registering or to register in another country like Andorra. For example, if your business is online, you can become an e-Resident of Estonia, which lets you quickly open a business and pay taxes based on profit and capped at 20%. The reality is, if you want your startup to be profitable, it’s a good idea to consider the alternatives. We advise you to consider only alternatives that are legal and that you take the time to think about which will serve your business best.

Related article: FuckUp Nights Barcelona

Finding Investors

In terms of money, there is also the question of finding investors. The number of investors in Barcelona who can offer you the proper funding are fairly rare. Most of the successful startups in Barcelona tend to go abroad to the UK, Germany, or even the US to find investors. This is one of the reasons why many successful startups in Barcelona or Spain move to the country where their investors are. This creates a further divide of the quality of financial support and mentorship that is available in Spain. Yet it’s promising to see more foreign startup support starting to come to Barcelona.

Related article: Best websites for entrepreneurs in Barcelona

Cultural and Language Divide

Last but not least there is the matter of the divide between locals and foreigners in Barcelona. This is likely due to the language barriers and the cultural differences. For example, when it comes to scheduling events, locals often prefer meeting during the week, while foreigners often have more time on the weekend. Also, the local startup communities are typically in Spanish and the foreign communities are in English. Some startup communities like Startup Grind try to alternate the language of their events. Yet, in the end, it still remains a challenge to get a 50/50 split of locals and foreigners in the same event. Why is this mix of locals and foreigners important? Locals tend to have a good network of people and potential employees and foreigners tend to have more financial resources and networks abroad. To seamlessly merge these two would greatly strengthen Barcelona’s startup scene. A hard truth locals may need to accept is if they wish to receive support from abroad or want to expand globally, English remains the #1 language!

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