A Guide to Starting a Business in Spain
Spain has a great business landscape that encourages entrepreneurs from across the globe to start their initiatives here. With great infrastructure, a talented labor force, and an entrepreneurial ecosystem, Spanish cities like Barcelona or Madrid, are attractive places to kick-off your business venture.
Nevertheless, starting a business in a new country comes with its own set of uncertainties and challenges. This guide will navigate you through all the steps involving in starting a business in Spain to ensure that you have a hassle-free experience.
Who Can Start a Business in Spain?
Whether you’re a foreigner or a local, anyone can start a business in Spain. However, the only requirement is for you to be a legal resident of the country. While this may sound easy, the process can get quite complicated for some, depending on their country of origin.
How to Start a Business in Spain
Here’s a step-by-step process to help get you started.
Find the Right Business Idea
Finding the right business idea is the key to setting up your business anywhere in the world. If you don’t have a solid business idea and a well-structured business plan, you’ll be setting yourself up for failure. So, before diving into anything, come up with an idea that will make your business stand out, list your goals, and calculate the feasibility of your potential venture.
Decide Your Business Structure
The next step is to decide the type of business you want to set up in terms of its legal structure. This decision usually depends on the available capital, business idea, and personal preference. There are many different company structures in Spain, including:
With the simplest business structure and an easy legal process, sole traders are the best options for small one-man companies. Although there’s no limit on the amount of capital a sole trader must have, as the only owner, there is no distinction between the company’s assets and the owner’s personal assets.
Limited Liability Company
A Limited Liability Company is the most popular business structure in Spain mainly due to its flexibility, minimum capital investment, and limited liability.
This legal structure is reserved for large companies that deal with stock trading. It is a preferable option for those looking to list their company on the stock market.
Get Your NIE Number
As a foreigner looking to set up a business in Spain, it is mandatory for you to get your NIE number. Only by getting this identification number will you be able to be tax identified and open a bank account. Although the process to get an NIE is quite simple, the time it takes to obtain your NIE depends on whether you’re an EU citizen or not. If you’re an EU citizen, you will probably receive this number with 3 to 5 days. On the other hand, if you’re a non-EU citizen, obtaining your NIE will depend on your immigration office.
Register the Company Name
After you’ve obtained your NIE number, you will need something known as a ‘certificate of uniqueness.’ The document states that the name of your company is now under your possession. For this document, you will need to list three potential names for your company and sent them to the Corporate Register of Spain to check their availability. This process can take up to 48 hours, after which they will accept one of the three suggestions.
Set Up a Company Bank Account
Now that you have your NIE, it will be easier to open your company bank account. If you’re starting a Limited Liability Company, you will have to deposit €3,000 in the newly created account. This contribution will generate a bank certificate that shows the payment. This document will have to be brought to the notary on constitution day.
Create a Shareholder Agreement
At this step of the process, you must decide how many and who will be the company’s shareholders. It is also important to determine the director of the company. Once you’ve decided on the director, create the shareholder agreement. This agreement lists down shareholder names along with their share percentage.
Register Your Company
Once you’ve received your NIE number, bank certificate, and certificate of uniqueness, it is time to go to the notary and sign the deed of incorporation to establish the shareholders and administrators of the business. Along with these documents, you will need to introduce the address of your business and list down the activities that your company will engage in the present and future. This process will take almost three weeks after the notary registers your company in the Company Registry. However, just as you’ve signed the setup of the company at the notary, you will be given a provisional VAT number under which you can start your operations.
You will have to pay taxes as soon as you start your business operations. So, once you’ve obtained the deed from the notary, you will have to visit the Spanish Tax Agency to register that documentation and get it stamped and to get your final Tax identification number (CIF) of your company.
Registering with Social Security
The last step of the process is to visit your social security office for the registration of your new business. Different regimes will apply depending on the structure of your business, mainly if you’ve registered as a sole trader.
The Bottom Line
Spain has become a thriving business center in Europe during the past few years. Cities like Madrid and Barcelona have grown into commendable entrepreneurial hubs that have all the elements to make a business successful. From great local and foreign talent to a diverse market and good logistics and infrastructures, Spain is the perfect place to enjoy your entrepreneurial journey. Although starting a business in Spainmay seem tedious at first, we hope this guide can help you easily navigate through the process.