New commercial company registrations dropped by 14.4 percent in July, totaling 7,180 registrations versus July 2021, marking the lowest July figure since September of the previous year. The data, released this week by the National Institute of Statistics (INE), show that over 6,600 firms were established during July, highlighting a quieter month for new business formation.
July also saw a continued decline in the establishment of chain companies, with a four-month downward trend continuing. Year over year, the fall followed earlier decreases of 8.2 percent in April, 4.6 percent in May, and 6.8 percent in June.
For the 7,180 companies founded in July, the combined subscribed capital reached €318 million, down 37.2 percent from July 2021. The average capital per company fell 26.7 percent year on year to €44,340.
While new company formations eased in July, there was an 8 percent rise in liquidations, reaching 1,624 closures compared with the same month last year.
In the first seven months of the year, the total number of company formations declined by 3.3 percent, while the number of dissolutions rose by 7.7 percent versus the same period in 2021. Of the 1,624 closures in July, 74.3 percent were voluntary, 13.7 percent occurred due to mergers, and the remaining 12 percent were attributed to other reasons.
During July, 20.6 percent of newly formed commercial companies focused on trade, 17.8 percent on real estate, and 17.8 percent on activities within the finance and insurance sectors. Among dissolved firms by main economic activity, the highest dispersal occurred in trade at 18.6 percent and in real estate, finance and insurance at 16.7 percent.
Conversely, capital commitments associated with new formations declined by 5.3 percent, totaling 2,070 registrations in July. Committed capital in these registrations exceeded €1,582 million, a 63.9 percent drop from July 2021, while the average capital stood at €764,261, representing a 61.9 percent decrease.
Madrid and Catalonia led in July
The regions with the most company formations in July were Madrid with 1,665 registrations, Catalonia with 1,391, and Andalusia with around 1,200. The regions recording the fewest new firms were La Rioja (22), Navarra (32), and Cantabria (49). All regions showed fewer company formations in July than in July 2021, with the most pronounced declines in La Rioja (-46.3%), Asturias (-28.8%), Castilla y León (-27.1%), and Galicia (-26.8%). The smallest declines occurred in Cantabria (-2%) and the Balearic Islands and the Valencian Community (-4.1% in both cases).
In terms of dissolutions, Madrid led with 555 closures, followed by Andalusia (247) and the Valencian Community (173). The autonomous communities with the fewest dissolutions were Navarra (5), La Rioja (6), and Cantabria (12).
Ten communities increased the number of business closures in July, with Murcia (+175), Asturias (+65%), and Cantabria (+50%) showing notable rises, while seven communities, notably La Rioja (-50%), the Basque Country (-32.7%), and Galicia (-30.1%), recorded declines in closures.
Monthly rate slowed by nearly one-fifth
On a monthly basis, new company formation fell 19.4 percent between July and June, while the overall rate of dissolutions declined by 4.4 percent. These shifts represent the largest monthly drops for July within the last five years, signaling a cautious climate for new business activity in the mid-year period.
Overall, the month reflected a broad slowdown in both formation and closure activity, underscoring a challenging environment for entrepreneurs during mid-year months. The figures come from INE and are used by policymakers and analysts to gauge trends in business dynamism and regional economic health. (INE data; attribution: National Institute of Statistics of Spain)