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Open a Business in Spain

Open a Business in Spain

The first steps in opening a business in Spain involve choosing a suitable legal structure and registering your business with the appropriate government authorities. There are various legal structures for setting up a company in Spain, such as a sole proprietorship (autónomo), a partnership (sociedad civil), a limited liability company (sociedad de responsabilidad limitada or sociedad anónima) etc. Our lawyers in Spain can help you select the right structure for your business needs, explain the registration procedure, and handle all the required documentation. We will also ensure that you comply with Spanish legal and tax obligations.

 Quick Facts  
Main types of Spanish companies/structures

– limited liability company (SL),

– newly created limited liability company (SLNE),

– stock corporation (SA),

– jointly owned company (CB),

– partnership,

– cooperative,

– sole proprietorship

Foreign entities in Spain

– branches,

– subsidiaries,

– representative offices

Minimum share capital to open a company

– EUR 3,000 for SL/SLNE,

– EUR 60,000 for SA

Bank account required for share capital (YES/NO) YES
General steps to open a company

– select the company type,

– obtain tax identification number (NIE),

– register with the Mercantile Registry (RMC),

– obtain the company tax identification number (CIF),

– prepare documentation, etc.

General required documents

– deed of incorporation,

– identification documents of the shareholders,

– tax identification number (NIE),

– proof of deposited capital, etc.

Special licenses and permits

Required for specific industries (healthcare, transportation, finance, hospitality, etc.)

Corporate income tax rate

– 25% (standard),

– 15% for SLNE under certain conditions

Personal income tax for sole traders

From 19% to 47%, based on earned income

VAT Registration

Mandatory for all legal entities selling taxable goods/services in Spain.

VAT rates

– 21% (standard);

– 10%, 4% (reduced)

Minimum shareholders required

1 for both SL/SLNE and SA

Virtual office possibility (YES/NO)

YES

Residency requirement

Foreigners need to obtain the appropriate visa to conduct business in Spain.

Assistance by our law firm in Spain

Our lawyers will help you select the suitable legal entity type for your business and assist in the entire incorporation process.

We invite you to watch a video about starting a business in Spain:

Legal structures for opening a business in Spain

If you open a company in Spain, you must choose a legal structure, to define how your business will be organized and governed under Spanish law. Here are the main types of legal entities in Spain, as detailed by our Spanish lawyers:

  • Sole proprietorship, which implies a straightforward process, but makes you personally liable for business-related financial risks;
  • Limited Liability Company (SL), suitable for businesses with few partners and requiring minimum EUR 1 for share capital;
  • Newly Created Limited Liability Company (SLNE), designed for new companies, with a simplified application process compared to a regular SL;
  • Stock Corporation (SA), which is a publicly-traded company requiring a stockholding of 60,000 EUR or more;
  • Jointly Owned Company (CB), where partners work together and share full liability for the business and any debts incurred;
  • Cooperative (S. Coop), owned by members and operating for their mutual benefit;
  • General partnership, which is similar to CB;
  • Limited Partnership, where partners’ liability is limited to their paid-in capital.

Additionally, you can also open a branch, subsidiary, or representative office in the country. Our attorneys in Spain can help you select the appropriate legal structure when you decide to set up a business in Spain.

General procedure to open a company in Spain

Setting up a business in Spain means following a simple procedure, especially if you seek assistance from a professional legal team. Our services are all over the country, and you can contact our lawyers in Barcelona for assistance in this specific area.

In general, here are the steps you need to follow to start a business here:

  • Foreign citizens must first obtain a Tax Identification Number (NIE);
  • Register your company name with the Mercantile Registry (RMC);
  • Obtain the Company Tax Identification Number (CIF);
  • Open a business bank account;
  • Sign the Deed of Incorporation, which officially establishes your company;
  • Register your company and submit the required paperwork to the Mercantile Registry;
  • Register with the Social Security System, if your business has employees.

Please note that the company registration with the Mercantile Registry may take several weeks to be completed. Our law firm in Spain can help you open a company remotely, through a power of attorney. We invite you to watch a short presentation on starting a company in Spain:

Why open a business in Spain?

Opening a business in Spain offers plenty of advantages. It offers access to a strategic location, investment incentives, a skilled workforce, and entrepreneurial support. If you want to open a company in the capital of Spain, our lawyers in Madrid can provide support. They can also set up a company in Spain on your behalf if you don’t want to travel to this country.

An advantage is that new limited companies can benefit from tax breaks during their initial years. They pay a reduced tax rate of 15% on the first 300,000 euros of profit and 20% on profits exceeding this threshold for the first two years. After this period, they are taxed at the general rate of 25%.

Additionally, here are some statistics that prove that the Spanish economy is showing potential for business growth:

  • As of 2022, Spain’s GDP was approximately 1417.8 billion US dollars, nearly 0.61% of the global economy;
  • In the third quarter of 2023, Spain’s GDP from the manufacturing sector increased to 42,280 EUR million;
  • In October 2023, Foreign Direct Investment (FDI) in Spain increased by 854 EUR million.

If you need more assistance in opening a company in Spain, please contact our team. We can also assist in real estate matters, through our property lawyers in Spain.