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Expat Guide: How to start a company in Spain

How to start a company in Spain

Guide: How to start a company in Spain

Starting a company in Spain is full of chances. It has a thriving startup ecosystem

Spain’s location gives it robust infrastructure and access to global talent

This helps companies grow in a global market.

Knowing about Spain’s culture and business ways is important. It’s as important as knowing logistical and admin benefits. 

Communication in Spain values politeness and personal relationships. This affects how people negotiate and do business.

Spain’s Ranking in Ease of Doing Business

Spain ranks high for ease of doing business. This shows how easy it is to start and run a business there. 

In 2017, nearly all new companies were sociedad limitada (S.L.), or limited liability companies. They are easy to start, need only €3,000, and take about 3 weeks to set up. 

This makes S.L. popular among entrepreneurs.

Cultural Insights for Business Owners

Cultural insights are important in Spain. Business owners should value relationships more than just transactions. It’s important to respect Spanish customs, like siesta hours and preferring in-person meetings.

Starting a company in Spain can be quick, sometimes just in 5 days. This shows how straightforward Spain’s admin processes are. Benefits for foreign investors and special tax systems make Spain attractive. Plus, R&D tax benefits are a bonus.

Being part of the EU lets businesses avoid double tax and follow unified rules. This helps Spain offer a smooth business environment.

Who Can Open a Business in Spain?

Starting a business in Spain is an appealing idea for many. It’s vital to know the rules for setting up a business there. This applies to both Spanish people and outsiders. 

Your EU citizenship or non-EU status will guide your next steps.

If you’re a British person wanting to start a business after Brexit, you need the right visa. You can get this visa from Spanish consulates in London, Edinburgh or Manchester.  

It’s smart for everyone, including UK folks, to get a TIE card. This card makes paperwork easier and helps at borders.

Did you register in Spain before 6 July 2020? If so, your green A4 certificate or card-sized paper still proves you live there. Bringing family to Spain is easy due to the Withdrawal Agreement. 

But, non-EU family might have to get a visa first. Luckily, this visa is free.

Traveling in the Schengen area? You must have your residency document or worker permit and a passport. Different EU and Schengen places have their own rules for entry you’ll need to follow.

Want to start a business in Spain, not just live there? Then you need to register your business. This gives your business legal status in Spain. It lets authorities and people know vital info about your business. For companies started outside Spain, this makes you equal with Spanish businesses.

If your business does things like have an office, hire people, take orders, and pay taxes in Spain, you might need to register. Not doing this can cause big problems. You could face fines or even lose the right to take legal action in Spain.

The registration process has several steps. You’ll need to check if your business name is free, find a local contact person and get a certificate of good standing from where your business started. Embracing this process shows you’re serious about your business. It also makes you a trustworthy business owner in Spain.

So, whether you come from inside or outside the EU, you can start a business in Spain. You just need to live there legally and follow Spain’s rules. Get ready, gather your papers, and look forward to joining Spain’s exciting business world!

Legal Structures

Starting a business in Spain means choosing the right legal structure. Being a sole trader is simple and lets you control everything. But, there’s a catch. All business debts might affect your personal money.

Choosing a Limited Liability Company (SL) keeps your personal stuff safe from business losses. Plus, being an SL can mean paying less tax if you make over 60,000€ a year.

  • Non-residents need an NIE (Número de Identificación de Extranjero) to start a company.
  • To start an SL, you need 3,000€ or stuff worth that much and a business bank account.
  • Signing up with Spain’s Commercial Registry is a key step, taking up to two weeks.

Big businesses fit well with Stock corporations (Sociedades Anónimas or S.A.) since they involve lots of investors. They also keep your personal assets safe and follow strict rules. Branch offices are parts of foreign companies and share risks with them.

Know the taxes and risks for each structure to avoid wasting time and money. In Spain, businesses face quarterly VAT, yearly company tax and must keep accounts right.

Each business model offers different benefits, risks, and tax rules. Your choice depends on your business type, money, and how much risk you can handle.

How to Start

Starting a business in Spain is exciting and easier thanks to a good system. Spain is ranked 28th for ease of doing business by the World Bank. This guide helps you start your business in Spain.

Necessary Identification Numbers and Certificates

To start business activities, you must get important documents first. You need an NIE, your tax number, for all business activities. A CIF is also needed for taxes. Both help you follow Spanish laws.

If you’re working for yourself, you’ll do VAT and income taxes regularly. People from outside the EU need a work permit and a business plan. They also need to prove they have enough money.

Articles of Association

The articles of association outline your company’s aims and rules. This document is very important. It sets the foundation for your business and future decisions.

Notaries in the Incorporation Process

A notary is crucial for starting a business in Spain. They help officially declare your company’s start. This step is a must for limited companies, offering protection from debt but requiring more duties.

While individuals don’t need this, a limited company needs at least €3,000 to start. You’ll need to take steps like proving your company’s name is unique, opening a bank account, and signing official papers. Finally, you register your company with Spanish authorities.

By using this guide, you can make the most of Spain’s business environment. With the right ID numbers, your company’s articles of association, and a notary’s help, you’re set to start your business in Spain.

Financial Essentials

Starting a business in Spain means you need to know financial basics. This is key to your success.

Administrative Requirements

To set up your business finances you need a bank account. This is very important. You’ll deal with government and tax offices too.

Opening a Business Bank Account in Spain

Business Permits

Getting the right business permits is crucial for your Spanish company. Check with a lawyer if permits are required for your new business. In some industries, permits may be required so check this before you get started.

Corporate Taxation Details for New Companies

It’s important to understand taxes for new businesses. You’ll look at tax rates and what forms to fill. 

Spain is a good place for your business, thanks to beneficial tax agreements.

One tip is to find a good accountant who can help you get it right from the start.

This helps protect your profits.

VAT Implications for Businesses

VAT rules for businesses are complex. You must be careful with your VAT returns and follow the rules. Starting a business in Spain is quick, taking about two weeks. This means you can quickly move from planning to doing.

Managing Employee Social Security Contributions

Joining Spain’s social security is key for payroll planning. Employee social security contributions show Spain cares about workers. 

Employers provide benefits, showing they value their employees. There are also perks for self-employed parents.

Spain is great for business with lots of foreign investment and support from the government. Getting to grips with the financial essentials puts your business on strong footing. 

You’ll do well in one of Europe’s top places for business.

Employing Staff in Your New Spanish Business

Starting a business in Spain means you need to know how to hire staff well. You’ll deal with things like job ads, interviews, and understanding work contracts. They help set your company’s culture and make sure you follow Spain’s strict job laws.

Hiring in Spain means looking at the costs too. The total cost for hiring someone is about 31.90% more because of social security and other benefits. You need to plan for these extra costs. Also, knowing about Spain’s minimum wage, which is 8.45 EUR per hour, is important. It helps keep things fair and meets legal rules.

Spain values work-life balance and looks after its workers. 

Laws say you must give 22-30 days of paid leave each year. There are good policies for parents too, like 16 weeks of leave for both mums and dads. Plus, you get extra leave for things like marriage or losing someone close. 

There are strict rules about paying workers when they leave. Health insurance, pension plans, and more are must-haves, not just nice to have. 

Knowing these rules is key when you’re building your team in Spain.