Open a Business in Spain

The first steps you need to consider if you want to open 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 starting 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 the Spanish laws. 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 a share capital of at least EUR 3,000; as an exception to the minimum share capital rule, the Series LLC can be incorporated with less than the prescribed amount. Our lawers in Spain can give you more information about the conditions for the exception.
• 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 share capital of minimum 60,000 EUR;
• 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.

The general steps required 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. We provide services across 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. Our lawyers can also help you start an LLC in Spain in approx. 5 weeks

Start a business in Spain as a foreigner

Starting a business in Spain as a foreigner means selecting the structure in the first place and respecting the formalities imposed by the legislation. SL is Sociedad Limitada or the limited liability company, a flexible business form that suits most of the needs of local and foreign entrepreneurs. The Spanish SL must respect a few important requirements we present below, mentioning that at least one shareholder is needed for incorporation:

• EUR 3,000 is the minimum share capital required to register an SL in Spain.
• One must open a bank account in Spain to deposit the minimum share capital.
• The Articles of Association represent the main documents of an SL in Spain.
• Registration for taxation and social contributions is required when starting a business as a foreigner in Spain. A tax identification number will be assigned at the end of this phase.

A sole proprietorship or Empresa Individual is another proper business form that can be selected for future activities by foreigners in Spain. This has the simplest business structure because there are no minimum share capital requirements or strict measures for incorporation. More about business in Spain for foreigners can be discussed with our company formation specialists in Spain.

Purchasing a shelf company in Spain is also available for foreigners who want to start a business in this country. A shelf company is normally the choice of international entrepreneurs who want to start the activities right away instead of dealing with the entire company registration formalities. This means that a ready-made company is already incorporated in Spain and once the transfer of ownership is concluded, the operations can commence. You can discuss with our company formation agents in Spain and see how you can purchase a shelf company in Spain. Business in Spain for foreigners is straightforward and allows entrepreneurs to start operations in a fast and reliable manner.

Corporate tax and filing requirements in Spain

Investors who open a business in Spain follow the aforementioned company incorporation process. However, once the new legal entity is registered, entrepreneurs have ongoing tax compliance requirements.

Our Spanish lawyers highlight some of the most important taxes for companies:

• The general corporate tax is 25%;
• Banks in Spain are subject to a 30% corporate tax, and companies with a net turnover below EUR 1 million in the previous tax period pay a 23% rate;
• In some cases, newly incorporated companies pay a 15% corporate tax;
• Dividend payments to resident companies/individuals are usually subject to a 19% withholding tax rate;
• The standard value-added tax rate is 21%, with reduced rates of 0%, 4%, 5%, and 10% applying to certain types of goods and services;
• Social security contributions are mandatory and the employer will generally pay 30.48% of the employee’s contribution base.

As far as compliance requirements are concerned, companies are expected to prepare annual financial statements and follow the IAS/IFRS accounting standards.

Relevant tax filing rules include the following:

• The tax year cannot exceed 12 months;
• Groups of Spanish resident companies can file consolidated returns, however, companies need to first qualify as a group;
• The corporate income tax is filed and the taxes are paid within six months and 25 days following the closure of the fiscal year;
• Spanish companies make advance income tax payments in April, October, and December;
• The penalties for underpayment can range between 50% to 150% of the unpaid tax. Other penalties can apply in addition or in lieu of this for infringing the tax laws;
• Late or undue payments are subject to a surcharge when the taxpayer makes this payment voluntarily.

Our tax lawyers in Spain can give you detailed information about the relevant tax laws and regulations.

Why is Spain attractive to foreign investors?

Opening a business in Spain offers many advantages, such as 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.

Spain encourages foreign direct investments, and the investor visa is a direct proof thereof. This type of visa grants residence rights to foreigners who can make a substantial capital investment:

• 2 million euros in Spanish public debt securities;
• 1 million euros in stocks or shares of Spanish companies;
• Real estate investments of at least EUR 500,000 (subject to conditions). If you need guidance for real estate purchases, our property lawyers in Spain can assist you;
• Starting a business project in Spain that is believed to be of general interest (because of the jobs it will create, due to its socio-economic impact, or because of other criteria).

If you need more assistance in opening a company in Spain, please contact our team.