How To Set Up A Small Business In Spain

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Spain offers an bonny business surround, a skilled and bilingual workforce and multiple opportunities for companies in key business organization sectors like manufacturing, automotive, life sciences, the chemic sector, telecommunications or tourism. Foreign investors from Eu countries have the benefits of simpler visitor incorporation procedures in Spain, while foreign enterprises from countries exterior the EU are required to fulfill boosted requirements.

Quick Facts
Types of companies in Spain	- sole proprietorship, - stock corporation, - limited liability visitor, - partnerships, - branch role, - worker-owned company, - cooperative
Minimum share capital for LTD Company	EUR iii,000
Minimum number of shareholders for Limited Company	1
Time frame for the incorporation (approx.)	12-15 days
Corporate revenue enhancement rate	- 25% standard rate; - 15% for newly created companies
Dividend revenue enhancement rate	- xix% for natural persons, - 5% for companies
VAT charge per unit	- 21% standard rate; - 10% for foodstuffs, water, pharmaceutical products, social housing, confined, cafes and other catering units, etc., - 4% for certain foodstuffs and pharmaceuticals, books, newspapers, construction work, etc., - 0% for intra-community and international transportation, revenue enhancement of gold coins
Number of double taxation treaties (approx.)	94
Do you supply a registered accost?	Yes
Local director required	Yes
Shelf company available	Yes
Redomiciliation permitted	Yes
Electronic signature	Yes
Is accounting/annual return required?	Yes (both)
Strange-ownership immune	Yes
Any revenue enhancement exemptions available?	- lower corporate tax for newly founded companies, - taxation exemption of up to 95% on strange dividends and capital gains
Revenue enhancement incentives for opening a business in Spain	- for various types of concern activities, such as the performing arts and the film industry, - tax credits based on the place where the company operates (such as Mellila and Ceuta). - a special corporate tax government applies in the Canary Islands.

Even so, Spain welcomes and treats all foreign investors equally local ones.Our team of Castilian lawyers can assist foreign businessmen with legal advice on the investment regulations available here and can offer step-to-pace information on the procedures necessary to consummate when opening a local visitor.

Reasons to open a business in Kingdom of spain

Spain is i of the peak recipients offoreign straight investments in the European union. With several sectors such as tourism, renewable energy and research developing at a fast rate and with a pro-business organisation legislation, Espana promises to go one of the near developed industries in the European union.

Among the all-time reasons to open a business in Spain, many strange enterprises accept mentioned flexibility and the adaptability of the Government. The listing below summarizes some of the fundamental types of investment aid available to foreigners interested in setting up a company in Spain are:

tax benefits - the R&D tax credit amounting to 25% of the full R&D expenditure incurred during the year every bit well as special revenue enhancement credits for creative and artistic fields (cinema product, music, creative performances);
Gratis Zones - cities ports with preferential weather condition for doing business (the Gratis Zone of Barcelona is the most notable one in Spain);
employment aid - tax credits are also bachelor for the employment of special needs individuals and young workers;
privileged investment sectors - investments in the telecommunications industry, as well as the renewable energy industry, tend to be privileged and tin can benefit from special investment help.

An important consideration for foreign investors is that they have complete freedom of establishment for companies in Spain. Full foreign buying is permitted permitted and our team of Spanish lawyers can provide an in-depth presentation on the types of documents foreign investors must provide upon the registration of a local business.

Our Spanish lawyers can provide you with more data about the current programs developed be the government. Investors can also asking for legal advice on the tax advantages Spanish companies tin do good from. Our lawyers can offer help on the tax minimization procedures that tin be employed here, simply also on the procedures for registering for VAT purposes and applying for an EORI number in Spain.

We invite you to spotter a short video on opening a Spanish business:

What types of entities can one register in Spain?

As presented above, foreign businessmen can annals any of the legal entities that are prescribed under the state's national legislation. Some of the nearly mutual ways to open a business in Spain is past registering a limited liability company (usually preferred by businessmen who want to open a small or medium-sized company) or a public limited company (a type of business class that is addressed to big companies). Strange businessmen can also ready up the post-obit:

sole trader – the simplest manner to establish a business organisation in Espana, which is addressed but to natural persons who want to start a business in their own name;
the branch office – used by foreign companies to expand on the local marketplace (the branch is a construction legally dependent to its parent visitor);
the subsidiary – a similar structure with the branch office, with the distinction that the subsidiary is considered a separate legal entity;
the partnership – it tin can be set past minimum 2 investors, who will be considered partners;
new enterprise limited visitor – introduced in 2003, information technology represents a simplified form of the limited liability company.

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What are the advantages of a new enterprise limited company in Spain?

The new enterprise express company in Spain (Sociedad Limitada Nueva Empresa – SLNE) was established in 2003 with the purpose of encouraging the registration of new minor and medium-sized businesses in this land. Although information technology has the characteristics of a limited liability company, there are several substantial differences from the Spanish limited liability visitor.

For example, this business form has to be registered with a minimum upper-case letter of EUR 3,000, but information technology can't have a capital above the sum of EUR 120,000. In the case of a traditional limited liability company, its shareholders can be both natural persons and legal entities. Nonetheless, in a Spanish SLNE, the visitor's shareholders must all be natural persons, and their number can't be in a higher place 5.

While in a regular limited liability company, the company's proper name can be freely chosen, in the case of a SLNE it is legally required to add the name of one of the founders. The abbreviation "SLNE" must also exist included in the official trading name. Our team of Spanish lawyerscan further suggest on other characteristics of this business organization structure, besides the ones presented below:

information technology is a suitable vehicle especially addressed to modest and medium-sized companies in Spain;
information technology tin be formed by a single shareholder, who tin can be a foreigner;
the company tin be formed with 100% foreign buying and its founders will relish express liability against the visitor's debts;
the Castilian SLNE tin can have a single manager and the appointed person tin can also be the company's founder;
information technology benefits from a fast registration process, the online registration beingness completed in a unmarried 24-hour interval.

The principal steps for setting up a business in Kingdom of spain

Once the strange investor has chosen the type of entity they will ready up in Spain, the next step will exist deciding the visitor'southward name and preparing the incorporation documents. First, they must verify the authenticity of the company'due south trade name with the Castilian Commercial Register, which may accept upward to 2 days. The certificate issued by this entity is valid for three months; that means the registration must exist done within this period of time. Certificates tin can only be renewed in one case.

After this procedure is done, the founders of the company should open a depository financial institution account where they will deposit the share uppercase and obtain a proof from the bank. The documents necessary for the registration must be notarized and then submitted to the localTrade Registerin the boondocks where the company will take the registered address.

The main procedures for company formation in Spain

Secondly, you have to open a bank account and eolith the minimum share capital for the incorporation. The bank volition event the statement with the deposited amounts which volition exist used for the registration of the company. The share upper-case letter tin be also deposited by a notary in the company's bank business relationship. Thirdly, forthe registration of the new visitor, a public deed of incorporation must exist drafted. This document contains:

the names of the shareholders and the number of shares each shareholder owns;
a financial identification number for each shareholder and the payments made by the shareholders;
the company bylaws (representing the statutory documents of the company);
the name of the administrator and whatsoever other required information.

Yous too take to submit a form and receive the tax identification number, pay the required taxes, legalize the company books. For certain economic activities, yous may need special licenses or permits that can be obtained past apolice firm in Spain, if you don't want to go in front of the Spanish authorities and handle the unabridged process.

Weather for doing business organisation in Espana

All companies in Spain must comply with the Company Constabulary and the Commercial Law, including the relevant provisions of the Competition Law and other laws. The incorporation of a company, its dissolution, mergers and acquisitions and other aspects are regulated by constabulary and must exist observed by strange investors.

Investors must choose from 1 of the main forms of business organization entities, most commonly between the limited liability company and the public limited company. Foreign corporations tin can also open a branch in Kingdom of spain. Castilian companies are bailiwick to the accounting and filing requirements also every bit auditing for some types of companies (when a set of special weather are met, companies may skip the almanac account auditing).

In terms of business taxation, companies must pay the corporate income tax, the value added tax, stamp duty, real property revenue enhancement and other local or municipal taxes. One of our lawyers in Spain can give you complete details about the laws governing business organization revenue enhancement.

Hiring employees in Spain

After the incorporation, theTrade Annals will event a registration certificate and the incorporation will be published in the official gazette of theMerchandise Register and the company tin begin its economic activity and hire employees. All the employees must be registered with the local entities that are in charge with the social security, employment, and fiscal problems.

Simplified company incorporation in Spain

Foreign investors who desire toopen a business in Spaincan give the power of attorney to a localSpanish lawyer who will handle the entire process of incorporation. Foreigners don't accept to go in person to Espana and look for the incorporation. Local authorities offer diverse sets of incentives in order to encourage foreign investments.

Assistance in opening a company, offered by Spanish lawyers

The company formation procedure in Espana tin be quite complicated for foreign investors due to all the steps it requires. With a vast experience, our attorneys in Kingdom of spain tin assist you with the preparation of the incorporation documents and can help you lot file them with the Companies Registration Part.

We tin as well help you file for the appropriate business licenses and special permits, in case y'all need any. Our Spanish lawyers tin provide with legal advice with respect to the employment legislation in example you want to rent personnel and can also help you with the registration with the local social insurance authorities. Companies involved in import-export activities tin asking information on how to apply for EORI in Espana, which refers to an identification number required at the level of the EU for trading entities.

How tin foreign businesses expand in Spain?

In the case of a strange visitor expanding on the local market place, there is ever the possibility of starting a business here through a subsidiary or a branch office. When deciding to expand through a branch office or a subsidiary in Spain, the parent company should accept into consideration aspects such as its responsibleness towards the Spanish role, the minimum share majuscule required, the initial costs associated with the new investment, the revenue enhancement requirements and taxation benefits and numerous others, which tin can exist detailed by our law firm in Spain.

Still, the main aspect that makes the difference between the two structures refers to the level of responsibleness the parent company has towards the newly founded office. In the instance of a branch office, the parent visitor is fully responsible and fully liable for any debts, which is not the situation of a Spanish subsidiary as it represents a separate legal entity, with its own rights and obligations.

What are the formalities for registering a Castilian branch?

If the foreign company decided to set a branch office in Spain, a set of legal formalities will need to exist concluded. The branch office is generally selected for registration due to the fact that the foreign company will benefit from lower costs associated with its registration – for example, the Spanish branch does not crave any capital. Some of the main registration formalities are presented below:

provide a re-create of the parent company'south manufactures of association and memorandum;
provide a copy of the parent company's certificate of incorporation and its document of good standing;
engage a person who will have the quality of branch office representative;
obtain a tax identification number and apply for a trading proper noun.

When opening a company in Kingdom of spain every bit a branch office, the company's representatives have to prepare a set of documents that will be presented in front of a public notary, who volition notarize them. Such documents can refer to the identity of the applicant, the identity of the parent company (such documents generally have to be translated into Spanish and notarized) and information apropos its existence, as well as documents that confirm the determination of the parent company's lath to establish a co-operative in this country.

The procedure may also include boosted documents, such as the declaration of foreign investments, a certificate that tin besides exist necessary when setting up a subsidiary in Spain. This declaration is issued by the Register of Foreign Investment of the Directorate-Full general for International Trade and Investments, which operates under the Spanish Ministry building of Industry. Our law business firm in Spain can aid investors with more than information concerning this document.

The steps of purchasing a company in Spain

The process of buying a company in Spain is mainly represented by the contract drafted for the selling-ownership performance; after this, the next step is to transfer the company from the previous owner to the new i. The transfer tin can exist performed at same fourth dimension with the signing of the contract or afterwards that, within a period that is mutually agreed.

When a foreign investor decides to buy an existing company, he or she must pay special attention to the assets and liabilities of the visitor. In this instance, it is recommended to perform the due diligence process that can be handled by our team of Castilian attorneys.

Although it is not compulsory to perform this action, information technology is highly recommended to do and then before buying a visitor in Spain, peculiarly if the foreign investor isn't familiar with the Spanish legislation.

After the due diligence procedureis completed, the investor will receive a report on any debts the company may have. The lawyers tin also plant if the erstwhile owner of the company fulfilled his obligations related to tax payments, intellectual property issues and many other aspects.

As a general rule, most of the set up-made companies in Spain are incorporated asexpress liability companies, as this concern form represents the near common blazon of company registered hither. Furthermore, this blazon of legal entity tin can be fix upwardly as:

• public express visitor – the general public is immune to purchase shares in the visitor;

• private limited company – it is established by a number of investors, who have the right over the company'due south shares.

Information technology is important to know that a shelf company in Kingdom of spain already contains the following:

• statutory documents;

• an incorporation certificate;

• value added tax number.

How to find out data well-nigh a Spanish company

The entrepreneurs who need more details about a Spanish company may get to the local office of the Merchandise Register and ask for detailed information. An alternative manner of getting information is by using the database of the European Business Register. Y'all don't have to travel in order to admission this database because the data is available online. For companies registered in Spain, yous may get in bear on with Colegio de Registradores de la Propriedad y Mercantiles de Espana.

Why invest in Spain?

Spain provides a set of competitive advantages which can brand it a great business organization destination. Information technology represents one of the most developed economies of Europe and one of the leading markets at a global level as well. Spain likewise benefits from 1 of the most positive projections regarding the growth of the economy for the electric current year (2019). The International Monetary Fund (Imf) ranked Spain as the 2nd nearly developed economy at a global level for 2022, later the U.s. of America. Other relevant data on the Spanish economic system are presented below:

at a global level, Spain is the 13th largest economy, while at a European level, it stands out every bit the 5th economy;
in 2022, it ranked as the 11th largest global exporter of commercial services;
at the level of the same year, it was the 17th nigh important exporter of merchandise;
Spain it is also the leading destination for international tourists (1st rank at a European level);
on a global level, it represents the 2nd country on tourism matters, bookkeeping for a total of 82 million strange tourists;
when referring to the country'due south foreign straight investments levels, Spain stands out as the 13th largest economy.

The business registration procedure can take equally long as several weeks as it is related to the type of visitor. If the registration application is filed online the incorporation is simpler and information technology will last less. For details almost the business incorporation process, y'all may contact our law firm in Espana. Our Castilian lawyers tin can also help yous in choosing the right blazon of concern structure.

Source: https://www.lawyersspain.eu/opening-a-business-in-spain