Spain is very conducive to foreign investment. Spanish authorities, in fact, greatly encourage the setting up of big, small and medium enterprises in the country in order to boost up its economy. Hence, foreign investors are welcome there, whether they come from European Union or non-European countries. Procedures applying to European Union citizens are however simpler than those applying to non-European citizens. You are advised to seek information from the Spanish Ministry of Industry, Trade and Tourism before proceeding.
Types of companies in Spain
Spain provides several tax benefits as well as local, provincial, national and European aids to foreign nationals looking to invest in the country. You can set up a business as a new company, acquisition, joint venture, a Spanish branch, a representative office, or as a self-employed person.
In general, foreign investors are likely to set up three different types of company statuses in Spain, namely:
- Sociedad Limitada or S.L.
- Sociedad Anónima (Public Limited Company)
Feel free to seek more information about these statuses from your home country's economic mission, embassy or consulate based in Spain, or via bi-national chambers of commerce.
Associates contributing to the company's capital can also act as managers or directors. However, they are not entitled to the company's dividends. They can only manage the company and its assets.
It’s best to ask advice from a Spanish lawyer and accountant (gestor).
How to establish your business
To set up a business in Spain, you are required to:
- obtain a personal identification number (NIE) and social security number
- book your company name with the Mercantile Registry (Registro Mercantil Central – RMC)
- obtain a CIF (Código de Identificación Fiscal) from tax authorities at the Agencia Estatal de la Administration Tribiutaria – AEAT
- open a bank account and deposit the minimum capital
- establish the articles of the company
- appear before a Spanish notary along with your business partners to apply to be appointed as company founding director(s).
Once you have booked the company name, it will be valid for three months following the booking date and can be renewed. Note that the bank account has to be opened in the name of the partners.
Once you have deposited the minimum capital a bank certificate will be issued.
Good to know:
The process can take up to 8-12 weeks before the company can start trading, although recent changes in the law mean that this process can be speeded up using a fast track, standardised company structure (Sociedad exprés) which can cut this down to 3-4 weeks.
Self-employment in Spain
Note, you can work as a freelancer (autónomo) without having to register a company. To become self-employed in Spain, you have to:
- obtain a personal identification number (NIE) and a social security number
- register with the Spanish tax authority and produce a duly filled 037 form (modelo 037) at the local tax office (Hacienda)
- register with the Spanish Social Security scheme under the self-employed (Régimen Especial de Trabajadores Autónomos, modelo TA0521)
In case you also want to register your own company, you’ll also need to:
- apply for a business licence at the nearest municipality or Gestión Tributaria office
- register your employees, if any, in the Social Security system
- keep accounting records.
The municipality's compliance services may then make an audit of your company's equipment and premises before issuing a compliance certificate.
Whether you are planning to work as a freelancer or run your own company, it’s advisable to consult a gestor (tax advisor). Most companies use a gestor to file tax quarterly. The tax system is complex and rules tend to change frequently.
As related formalities can be quite complicated, you are advised to hire a lawyer or a notary, or to seek the help of experts to set up your business.
Freelancers in Spain
The majority of freelancers (autónomos) file VAT (modelo 303) themselves and ask a gestor to handle yearly income tax (RENTA). Monthly social security contributions are about 270 EUR for autónomos and over 300 EUR for company owners. Spain offers financial advantages for newly registered freelancers during the first 3 years. This allows minimum social security fees starting at 50 EUR per month that gradually increase to the full amount after the 3 years.
Central Mercantile Register www.rmc.es
Central Mercantile Register - Registering your company www.rmc.es/Deno_solicitud.aspx?lang=en
Ministry of Industry, Energy and Tourism of Spain – Setting up a business www.circe.es
Invest in Spain www.investinspain.org