Setting up a company evolves a titanic effort, but the process can be even more arduous when it is carried out by an expat. On this page, we have answered some of the most common questions that our clients have about establishing a company in Spain.
However, to optimise your results, it is best to contact us and make sure that one of our expert legal advisors can offer you a specialised services package. They are fully aware of regional advantages in terms of tax, regulations and other factors.
Who Can Set Up a Business in Spain?
The first requirement is to have the right to work and live in the country.
If you are from the EU, the free movement is granted as one of the most important principles of its citizens. You must be registered in the country and obtain the foreign national identification number NIE. This number is associated with each person and it will be needed to start any administrative process in Spain, for instance, is used by the Spanish HMRC, banks accounts etc.
In case you are from outside of the EU, it will be mandatory to hold a work allowance and visa before applying for the NIE.
In any case, this initial step can be carried out by us, using a power of attorney with a Hague Apostille, saving you time and unnecessary displacements.
How Can I Do Business in Spain?
The correct legal form of your business is crucial. Depending on how complex the structure of your business and future legal duties will be, there are three main options:
Sole Trader and Self-employed
(Empresario individual y autónomo)
If you intend to run your business on your own, and be involved in daily work this might be the simplest and smoothest way.
Autonomo is the Spanish term for self-employed. Registering as an autonomo is a really quick, simple and cheap way to make your business legal. There is some tedious administrative work to do, but the most important tasks include reporting to the Spanish tax authority and Social Security, the Spanish HMRC. Reports must inform about your VAT returns, Annual Income Tax Return (I.R.P.F), Social Security.
Spain offers six types of limited company. Their main advantage is that your liability remains separate from the performance of the business. Besides, there are specific types of businesses that must be set up as a limited company by law. The main differences between them are the minimum number of shareholders required, and the minimum amount of money you have to invest.
Partnership (Sociedad Civil)
If you are going into business with someone else, the best option might be to choose a partnership (Sociedad Civil) which requires a more complex process than being a sole trader. There is not a minimum investment required to set up a limited company. The partnership can be a general partnership ( Sociedad General) or limited partnership (Sociedad Comanditaria).
In any case, it will be necessary to create a partnership agreement and sign it before a notary, it is highly recommended being drafted by a lawyer, because there some law requirements, for example, the business must include the words Sociedad Civil in its business name.
Besides, there are administrative tasks to do like registering with the tax authorities, social security and might be necessary to apply for any licenses (including an opening license for your business premises).
Main Steps to Incorporate a Company in Spain
- The certificate that the name that you have chosen for your company is available, is needed to apply for that name in the Spanish Companies House.
- Tax Identification Code (CIF)
- Business Bank Account by the name of the company.
- Public deed of incorporation (must to be done before a notary)
- Register the company with the Spanish Tax Agency and Security Social (HMRC)
What Is the Cost of Setting Up a Limited Company in Spain?
It is difficult to define; it would depend on the model of business and the minimum investment required for each.
As a limited company, the minimum investment is 3.000 euros; with regard to notaries and administrative fees, the cost could be up to 1.500 euros. On the other hand, as Autonomo the cost is just the administrative fees and the monthly contribution to the Security Social (HMRC).
What Are the Tax and Accounting Obligations for a Company in Spain?
Set up your company in Spain with ease
At Del Canto Chambers, a highly experienced team of corporate law and dual-qualified lawyers based in Spain, we analyse your business plan and advise you at every step of the way.
Do not hesitate to make an enquiry at:
Our team of Spanish legal experts has many years of experience with company formation in Spain
To make a no-obligation enquiry, please call us on +34 91 080 08 85 or fill out the form below.