How Spain is putting out the welcome mat for foreign entrepreneurs
Posted on November 28, 2014
Last year, after more than a decade in Silicon Valley, Stacia Carr helped sell the company she was running and went looking for a change of pace.
“The Bay Area is supersaturated,” she said. “It’s very expensive; it’s hypercompetitive.”
After a friend connected her with Iñigo Amoribieta, a former chief executive of GrouponSpain, Carr and Amoribieta started talking about creating an online video business together that would be based in Madrid, his hometown. Carr, 42, a Californian who has traveled extensively in Europe, long dreamed of living and working there. But as the founder of a startup company and as a US citizen, she assumed that it would be “next to impossible” to get a work permit at a time when many European economies were struggling to rebound from the financial crisis.
Then she learned of a law that Spain’s government passed in September 2013 to help domestic businesses and to woo foreign talent and investment. It included a visa category for foreign entrepreneurs, requiring them to have little more than a government-vetted business plan, health insurance and enough money to support themselves while living in Spain.
“I thought the entrepreneurship visa was exactly what I needed,” she said. The law went into effect as soon as it passed, but when Carr contacted Spanish consulates in the United States, she couldn’t find people who knew it existed, let alone how it worked. Convinced that word would eventually trickle down, she moved to Madrid from San Francisco in late November 2013 without applying for the entrepreneur visa, aware that Spain allows US citizens to stay for up to three months as tourists.
Early this year, she and Amoribieta, 37, incorporated their venture, Vidnex, while working from a business incubator in the Salamanca neighborhood of the city. Vidnex offers an online tool that allows fitness instructors to teach classes remotely, streaming live video to their students. The classes are interactive, not prerecorded, with the student and the instructor able to see each other and talk in real time. Students can’t see their classmates.
Setting up the business in Spain, Carr said, was more challenging and required more formal documentation than she had expected. And getting residency presented challenges. One of the first applicants to try to use the law’s new entrepreneur visa, she found government workers unprepared to answer her questions. It was harder because she didn’t speak Spanish, but Amoribieta helped her navigate the bureaucracy by preparing paperwork and scheduling appointments, including one meeting in which officials assumed that Carr was a personal trainer using the Vidnex service rather than a co-founder.
Still, she managed to gain approval for her renewable, two-year entrepreneur residency permit in March, about a month after she applied under the new rules. Carr acknowledged that Spain, a country where unemployment reached a record high of about 27 per cent last year, might seem an unlikely place to start a business.
But when compared with European startup magnets like London and Berlin, Spanish cities like Madrid and Barcelona have lower costs and fewer competitors – and still have a sufficient talent to get started, she said. Technical expertise can cost a quarter of what it would in Silicon Valley, Amoribieta said. Vidnex is housed in an incubator called Area 31, run by IE Business School. The incubator buoyed their efforts – founders at other startups helped them find a contract designer and interns.
Connecting with Madrid’s entrepreneurs “was like finding my tribe a million miles from home,” Carr said. The new law, known as the Ley de Emprendedores, is Spain’s latest effort to help domestic businesses and make the country more attractive to wealthy and talented people outside the European Union who want to start businesses, invest or work in the country.