How easy is it to start a business in Spain? What obstacles may foreign nationals face?

In Spain, there are a variety of structures when setting up a company, which may depend on the size and scope of your overall plans. Choosing the right business legal structure, such as a sole trader or limited company, may alter the company formation process and the documentation required. To address these potential issues, it is important to consider certain elements that may help the process run smoothly.

This guide will explore the process of setting up a company in Spain, how easy it is for foreign nationals, and any issues that they might face.

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Find out the benefits of starting a Spanish business for foreign nationals.

Examine the different elements that may make company formation in Spain easier.

Discover the different obstacles a business owner may need to address when setting up a Spanish business.

Find out the considerations and how international lawyers can help the company formation process.

The most asked questions on setting up a company in Spain.

What are the advantages of setting up a limited liability company in Spain?

One of Spain's most common business legal structures is the SL; a limited liability company, or sociedad limitada. SL incorporation can be registered with a single partner or multiple shareholders. This type of business legal structure is ideal for small to medium-sized businesses.

Although this structure does require the business owner to file their own VAT returns (IVA), there are various benefits to this type of company, especially for non-Spanish citizens looking to start a business.

Sociedad Limitada (SL) is a highly flexible business structure and will be seen and operated as a 100% Spanish company. This may be beneficial for foreign business owners who want to run their Spanish limited company from their home country without having to emigrate. In addition, they will be able to benefit Spain's tax advantages, as there is a reduced tax burden compared to other countries in the European Union.

Discover more benefits of starting a business in Spain here.

The minimum share capital is €3000 for a Spanish limited liability company, which is considered low compared to other incorporation rates. Incorporation also protects the owner from personal liability in the event of bankruptcy.

Despite the many advantages setting up a company in Spain has to offer, there are still issues that may need to be addressed. To ensure a smooth company formation process in Spain, work with international and multilingual lawyers (Abogados) who can advise you at every step.

Contact Giambrone & Partners today to find out more information.

How easy is it to start a business in Spain?

There are no limitations to who can start a business in Spain. For an EU citizen, this is a fairly straightforward process. However, additional documentation will be required for business owners from countries outside the European Union, such as British nationals. Foreign national business owners must apply for a work permit if they intend to move to Spain.

Smiling Waiter Holding Chalkboard With Open Inscription In Cafe

Spain is one of the countries that provide the Golden Visa programme to prospective entrepreneurs. Foreign national business owners looking to make large investments in the Spanish economy may be liable for this entrepreneur visa, and in return, offered residency in Spain. This can help ease the company formation process, not only benefiting the business owner looking to move, but also the general Spanish market.

What documentation is required to set up a Spanish business?

Due to its flexibility, setting up a company in Spain can be an easy process. However, as various documents are required and additional taxes, it is recommended to seek legal advice as soon as possible. The documentation required included:

  • An NIE (foreigner's tax identification number)
  • Registering the company name at the Mercantile Registry
  • A company tax identification number (CIF)

As long as there is a strong business plan that details how the company will benefit the Spanish economy, starting a business in Spain is easy. However, seeking legal advice from an international law firm with a deep understanding of Spanish employment laws is still recommended.

To find out more about setting up a company, browse through our Spanish hub, which provides guidance on all aspects of company formation in Spain.

Are there any potential issues a foreign national may face when setting up a company in Spain?

There are many advantages to setting up a company in Spain. However, like any transaction, certain issues may need to be considered, and a solution found to address them.

Liable to carry out accounting

Business owners looking to set up a limited liability company (SL) will need to undergo their own accounting. This may lead to future issues without professional help. To avoid this issue, you can consider selecting an alternative business structure, such as a sole trader (empresa individual) or partnership (sociedad civil).

Language barrier

Although English is typically conversed between businesses, there may be instances where there is a language barrier. For example, if you have Spanish employees or want to communicate with local and smaller businesses that may not understand English. During the company formation, you may also find that not understanding Spanish is an issue, like when setting up a Spanish bank account or translating certain documents.

To address this issue, consider working with multilingual lawyers who understand and can speak both English and Spanish.

Giambrone & Partners is an international law firm operating in a variety of jurisdictions. With over fifteen years of experience providing legal advice, our lawyers will be able to guide you through the Spanish company formation process and ensure you have a full understanding of what is expected from you as the business owner.

Contact Giambrone & Partners today to find out more information.

What considerations should you make when starting a business in Spain?

Along with working with international lawyers who will be able to guide you through the process of starting a business in Spain, there are other considerations you should make.

As Spain is typically more relaxed than other countries, business owners should consider adapting to this type of working environment beforehand. Not understanding the business structure may make you and your company seem unprofessional and ill-prepared.

In addition, consider whether you want to move to Spain. Overseas business owners will require a tax identification number (NIF) alongside the NIE. There also may be other visas and permits required that will need to be considered.

If you are considering starting a business in Spain or opening a Spanish branch of an existing company, make sure to seek legal advice as soon as possible.

Contact Giambrone & Partners to arrange an appointment with one of our expert lawyers.

Frequently asked questions

What do you need to open a Spanish branch of an existing company?

When opening a Spanish branch of an existing company, you must provide legal documentation that proves the incorporation of the parent company (no matter where this business is based). You will also need to provide evidence that this company is in good standing, including financial documents and a power of attorney that has been legally notarised.

Find out more about setting up a company in Spain here.



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