What are zombie companies?

• A zombie company is a company that cannot cover its financial expenses with its income.
• In the Community of Madrid there are 9,323 zombie companies, 19.4% of the total amount

Origin of zombie companies

"Zombie companies" is a concept that was coined in the 1980s in Japan to describe the situation of long economic stagnation. At that time, numerous companies remained productive thanks to very low interest loans granted by banks.

In a context of bursting financial bubbles, this situation created a vicious circle. Distressed banks helped companies that were not growing and deprived others of these resources.

Therefore, the existence of a high number of zombie companies may be a poor allocation of credits. This fact leads to a decrease in productivity and puts the capitalization of banks at risk.

Zombie companies in Spain

Currently, a zombie company is a company that cannot cover its financial expenses with its income.

During 2023, 48,049 zombie companies have been located, representing 3,67% of the total active companies in the INFORMA database. Compared to last year, the identified zombie companies have increased by 1,78%. The study has also detected that of the 47,350 companies identified as zombies last year, 46.09 % of them have not improved their situation and remain in this condition.

However, almost 48 % of these currently do not present indicators of over-indebtedness. Finally, only 6.27 % of last year's zombie companies have ceased operations, officially or unofficially.

Where are they in Spain?

The business activity in which we find the greatest number of these zombie companies is in the construction and real estate activities sector, with 28% of the total in 2023. This is followed by the commerce and business services sectors, which accumulate 20% and 14% respectively.

Madrid and Catalonia bring together almost 40% of these companies. Madrid is the community in which the most zombie companies are located, 9,323, 19.4% of the total amount. After it, Catalonia with 18.9%, Andalusia with 10.5% and Valencia with 10%. This means that only in four autonomous regions are around 60% of the Spanish zombie companies concentrated.