Setting up a business in Spain
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Spain encourages the setting up of small, medium and large enterprises across the country to boost employment prospects and the economy. Consequently, foreign investments are welcome from European and non-European countries. Anybody wanting to start a new business in Spain will have to go through a number of procedures and formalities, which are simpler for EU citizens than they are for people from non-EU countries. You are advised to seek information from the Spanish Ministry of Industry, Trade and Tourism before proceeding.

Types of companies in Spain

Tax benefits and local, provincial, national and European aid grants are available to foreign nationals looking to invest in the country. You can set up a business as a new company, an acquisition, a joint venture, a Spanish branch of an existing business entity, a representative office or as a self-employed person.

The main options for your business form in Spain are:

  • Sociedad Limitada or S.L.
  • Sociedad Anónima (Public Limited Company).
  • A partnership.
  • Sole trader.

For more information about any of this, speak to the Spanish embassy, consulate or economic mission in your home country or Spain. You can also seek out advice from binational Chambers of Commerce.

Note that 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.

 Important:

You've got a brilliant idea for a business in Spain, but before taking concrete steps, consult a Spanish lawyer and accountant (gestor).

How to establish your business in Spain

  • Ensure you have your foreigner’s identification number (NIE) and social security number.
  • Establish your company name with the Mercantile Registry (Registro Mercantil Central - RMC)
  • Obtain a CIF (Código de Identificación Fiscal) from the tax authorities at the Agencia Estatal de la Administration Tribiutaria.
  • Open a business 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 the company founding director(s).

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. You will need to show this to your notary for the deed of incorporation to establish your company.

 Good to know:

The entire process can take several weeks before you're permitted to trade. However, you can speed up matters with a fast track process called Sociedad exprés.

Self-employment in Spain

Note, you can work as a freelancer (autónomo) without having to register as a company. To become self-employed in Spain, you have to:

  • Obtain your foreigner’s identification number (NIE) and a social security number.
  • Register with the Spanish tax authority and complete 037 form (modelo 037) at the local tax office (Hacienda).
  • Register for the Spanish social security scheme for the self-employed (Régimen Especial de Trabajadores Autónomos, modelo TA0521).
  • In case you also want to register your own company, you will 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.

Your region'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 their quarterly returns. The tax system is complex, and rules tend to change frequently.

Freelancers in Spain

Many freelancers (autónomos) file VAT (modelo 303) themselves and ask a gestor to handle yearly income tax (RENTA). Monthly social security contributions are about 280 euros for autónomos and over 300 euros for company owners.

Spain offers financial advantages for newly registered freelancers during their first two years. The monthly amount they have to pay is reduced to €50 per month for the first 12 months of self-employment. The payments then rise to €137 per month for the first six months of the second year and then increase to €192 per month for the final six months. After this time, freelancers pay the standard monthly rate.

 Useful links:

Central Mercantile Register
Central Mercantile Register - Registering your company
Ministry of Industry, Energy and Tourism of Spain - Setting up a business

We do our best to provide accurate and up to date information. However, if you have noticed any inaccuracies in this article, please let us know in the comments section below.