The steps for setting up a business in Spain may seem excessively complex to some foreigners, with many different aspects that must be considered, each with its own stack of paperwork. Fortunately, the process can be completed quite quickly, provided that everything is done correctly the first time. Setting up a business in Spain is also not very expensive, although the exact cost of starting a business here will depend on the type of company and the personal situation of the business owners or partners.
In this article, we’ll guide you through some of the basics of setting up a business in Spain, including the general steps for how to open a company, the cost of starting a business, and the logistics of running a business in Spain as a foreigner.
Setting up a business in Spain: how to open a company
First, you will need to sit down and answer some preliminary questions: What type of company are you going to form? Will you be handling all of the filing and applications yourself, or will you hire a legal representative to do this on your behalf? The answers to these questions, respectively, will determine the necessary forms and capital requirements, and whether you need to grant your representative with power of attorney.
There are several different types of business in Spain from a legal perspective, with the most common being Sociedad Anónima (S.A., Public Limited Company/Corporation) and Sociedad de Responsibilidad Limitada (S.L., Limited Liability Company). A legal advisor with expertise in Spanish business law can help you determine which setup is the most advantageous for your company.
As a foreigner setting up a business in Spain, you will also need a tax ID number, which for natural persons is called a NIE and for juridical persons is called a NIF. This is a separate process that should ideally be started early.
You will also need to open a bank account in Spain to deposit your capital, which the bank will need to certify. Additional paperwork that needs to be filed includes the application for a company name clearance certificate, notarized articles of incorporation, registration with the Registro Mercantil, application and formalization of the company’s NIF, tax formalities, and legalization of the company’s business ledgers.
Cost of starting a business in Spain
The exact cost of starting a business will depend on the type of company, capital allocations, administrative fees, and the costs associated with other required procedures (such as applications for visas, NIE, etc.). However, a ballpark figure for an S.L. type company is €550 plus a capital allocation of €3000; likewise, the average cost of setting up an S.A. type company is around €750 plus a capital allocation of €60,000.
Obviously, this figure does not include tax liability that you may incur through the Asset Transfer Tax and any other relevant taxes.
Running a business in Spain
You will have different logistical aspects to consider depending on how you are planning on running a business in Spain. For example, if you will be taking a hands-on approach, you may also need to look into the process of applying for residency for you and your family. There is also the matter of understanding which taxes you will be required to pay, on a company level and on a personal level. If you haven’t already begun the process of looking for real estate property from which to operate your business, that is yet another matter that will need to be taken care of before you can get everything up and running.
Because of the complicated nature of setting up a business in Spain, it is wise to consult a legal professional for guidance during the process. This will not only help expedite everything, but will also provide an extra layer of protection for you and your business.