Business in Spain: Set Up your Company

As opposed to some other EU countries, creating your own company in Spain is no easy task.

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Introduction

Welcome to our guide on establishing a business in Spain. Whether you’re a seasoned entrepreneur or venturing into business for the first time, managing the process of establishing a company in Spain can seem daunting. However, fear not! We’re here to provide you with clear guidance and support every step of the way. Spain presents a wealth of business opportunities, but it’s essential to understand the unique legal and regulatory landscape to ensure a smooth entry into the Spanish market.

Spain offers many advantages for entrepreneurs, from its strategic location facilitating international trade to attractive tax benefits and access to the vast European market. With a diverse and qualified talent pool, high quality of life, and an excellent start up ecosystem, Spain presents an ideal environment for business. Furthermore, there is a dynamic ecosystem of academic, institutional, scientific an private initiatives that support innovation, investment and trade.

Advantages of a Company in Spain

  • Strategic Location and Connectivity: Spain is strategically located at the crossroads of Europe, Africa, and America, making it an ideal location for international trade. The country boasts excellent infrastructure and connectivity, including modern airports, ports, and a well-developed road network.
  • Tax Benefits: Spain offers attractive tax benefits for companies. It has a competitive corporate tax rate and various incentive measures for investments, including tax benefits for innovation, impatriates and certain sectors and regions.
  • Access to European Market: As a member of the European Union, Spain provides access to the large European market, with over 500 million consumers. This facilitates business within the EU and offers opportunities for growth and expansion.
  • Talent Pool and Labor Market: Spain boasts a well-educated workforce and a diverse talent pool, with skilled individuals in various sectors, including technology, tourism, and business services. Additionally, labor costs in Spain are generally lower than in other European countries.
  • Quality of Life: Spain is renowned for its high quality of life, with a pleasant climate, stunning landscapes, and a relaxed lifestyle. This makes it attractive for both entrepreneurs and employees seeking a balance between work and personal life.
  • Innovation and Research: Spain is increasingly investing in research and innovation, with numerous research centers, universities, and technology parks. This provides companies with the opportunity to collaborate with leading institutions and benefit from cutting-edge technologies.
  • Cultural Diversity and Business Opportunities: Spain has a rich cultural history and offers a range of business opportunities in various sectors, including tourism, gastronomy, fashion, and renewable energy. The country attracts millions of tourists and investors annually, providing new opportunities for growth and development.

Steps to Establish a Company in Spain

  • Get Shareholder Tax Identification Numbers: To perform any legal or economic transaction in Spain, you or your company will need to have a tax identification number. This can be a Número de Identidad de Extranjero (NIE) or a Número de Identificación Fiscal (NIF, or CIF). The process of getting a NIE or NIF might take some time depending on the country of origin, layers and number of shareholders involved, translations, and legalizations. Our relocation team is there to assist you during this process.
  • Define Type of Company and Governance: Decide what type of company fits best to your objectives: a private limited company, a public limited company, a general partnership, a non-profit foundation, a branch office, or a subsidiary. Also, consider how the company will be governed: a sole director, joint directors, or a board of directors. Our corporate lawyers can advise you on the best options for your case.
  • Decide on Company Name and Brands: Prepare a list of five possible names to be registered in the Registro Mercantil Central, which will check the availability of those names. Additionally, consider registering a trademark in Spain or the European Union and reserving the corresponding domains for websites and social media platforms.
  • Prepare Company Statutes, Bylaws, and Deed of Incorporation: The deed of incorporation defines the company’s location, activities, start date, capital, shareholders, and directors. In the statutes, aspects like governance, decision-making processes, share transfers, and profit distribution are outlined. We are accredited as a PAE center and can handle both elaborate and fast-track constitutions.
  • Sign Before Public Notary: Once the company statutes and deed of incorporation are prepared, they must be signed before a public notary. All founding members must be physically present to sign the deed of incorporation, or this can be done through a power of attorney.
  • Obtain the Company’s Fiscal Identification Number (NIF): Request a fiscal identification number for the company from the Spanish tax agency (AEAT). This number also serves as the company identification number and VAT number.
  • Inscription in the Trade Register: Present the deed of incorporation to the Trade Register for inscription, which takes approximately three weeks. Once registered, the company’s bank account can be activated, and a digital certificate for the company can be requested.
  • Open a Bank Account: Once you establish your company in Spain, you will need to open a bank account for the company in a Spanish bank. This process can be slow and bureaucratic, but we have contacts with most recognized Spanish banks that can speed it up.
  • Get a Digital Certificate: In order to be able to interact with the Spanish administration, a digital certificate is required as all communication is conducted digitally through websites, applications and electronic mailboxes.
  • Register with the Tax Agency Census: Communicate the start date of operations, activities, and locations to the Spanish tax agency. This registration marks the start of the requirement to comply with tax obligations.
  • Obtain Corporate Social Security Number: If hiring employees, request an employer social security number (CCC) from the local social security office (TGSS). Employees must have a residence and work permit and a Spanish social security number (NAF).

Branch Office, Subsidiary or Acquisition

When planning to open a branch or subsidiary, consider the differences between them:

  • Share Capital: Opening a branch does not require capital, while a subsidiary needs €1 to €60,000, depending on the type.
  • Responsibility: The parent company is fully responsible for a branch, while the officers and administrators of a subsidiary have legal and fiduciary responsibilities.
  • Management and Shareholders: The organization differs for the two types, a Branch Office is ultimately just a representation of the parent company without a separate legal entity, board of directors or shareholders.
  • Taxation: A branch pays taxes as a non-resident legal entity, while a subsidiary declares taxes as a Spanish company. Tax advantages are available for resident companies but not for non resident entities.

Consulting with professionals can help avoid difficulties in opening your company and fulfilling accounting and taxation requirements.

Buying a Business in Spain

Buying a business can be an excellent investment. Consider the purchase price, financial situation, company assets, growth potential, uniqueness, and competitors. Due diligence is crucial. If interested, our team can assist you in every step of the process.

FAQs about Establishing Your Company in Spain

  • What are the tax implications of establishing my company in Spain? Spain offers attractive tax benefits, including a competitive corporate tax rate and various incentive measures for investments. Benefits are available for certain sectors and regions.
  • What are the bureaucratic procedures involved in establishing a company in Spain? The process includes registration, obtaining necessary documents, and potentially obtaining permits. The Spanish government is making efforts to streamline these procedures.
  • What are the opportunities and challenges in the Spanish market for my specific industry? The Spanish market offers diverse opportunities in industries like tourism, technology, and renewable energy. Understanding market size, competition, regulations, and trends is essential.
  • What is the labor market like, and how easy is it to find qualified personnel in Spain? Spain has a well-educated workforce and diverse talent pool. Despite high unemployment in some regions, companies can find qualified personnel, especially in technology, tourism, and business services.
  • What are the regional differences within Spain, and which location is best for my company? Spain’s regions vary in economic activity, regulations, and culture. Researching regions like Catalonia, Madrid, Valencia, and the Basque Country is important to choose the best location for your company.
  • What are some success stories of companies that have established themselves in Spain? Numerous companies have successfully established themselves in Spain. Learning from these cases can provide valuable insights and best practices.

How ACCOMPANY Can Help

Once your Spanish company is established, ACCOMPANY can assist in various ways. We help maintain accurate accounting records and ensure compliance with Spanish tax obligations, offering guidance on tax rates and legislation. Our team is available to address any questions or concerns, providing assistance with tax obligations and financial reporting. Additionally, ACCOMPANY offers strategic advice to optimize business operations in Spain, identifying tax-saving opportunities and streamlining administrative processes to maximize growth potential.

Conclusion

Embracing the opportunities of establishing your company in Spain opens doors to growth, innovation, and prosperity in a vibrant and welcoming business environment. With ACCOMPANY’s expert guidance and support, navigating the complexities of the Spanish business landscape becomes more manageable. From obtaining necessary documentation to ensuring compliance with legal requirements, our dedicated team is here to assist you every step of the way.

With ACCOMPANY by your side, you gain access to a wealth of knowledge and experience, allowing you to confidently navigate the intricacies of starting a business in Spain. Our ongoing support doesn’t end once your company is established – we’re here to provide assistance, address any questions or concerns, and offer strategic advice to help you maximize growth potential and achieve success.

So, if you’re ready to turn your entrepreneurial dreams into reality in Spain, let ACCOMPANY be your trusted partner. With our expertise and support, you can embark on this exciting journey with confidence, knowing that you have a dedicated team behind you every step of the way.

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The information contained herein is of a general nature, and subject to changes. Applicability to your specific situation should be determined through consultation with our tax or legal advisors.