Tag Archive for: Starting a Business

When starting a business in Spain, you will have to choose the types of company entities you want to establish. There are five general types of legal structures in Spain, and each one has its own set of benefits and drawbacks. In this article, we will give an overview of each type of Spanish legal structure that can help you make an informed decision when starting your business.

Business entities in Spain

The following business entities exist in Spain:

  1. Autonomo or Empresario Individual – Sole Trader/Sole Proprietor
  2. Sociedad Limitada (SL) – Private Limited Liability Company
  3. Sociedad Anonima (SA) – Public Limited Liability Company
  4. Sociedad Limitada Nueva Empresa (SLNE) – New Private Limited Liability Company
  5. Sociedad Cooperativa (S. Coop.)

Sole Trader/Sole Proprietor – Empresario Individual or Autónomo

The Autonomo or sole trader is the simplest entity. The Autonomo is an individual person, (single owner). For tax purposes, the Autonomo is ideal for freelancers with limited startup capital and income below 50.000 euros.

However, the sole proprietor is responsible for all business activities and for all of the company’s liabilities. Registration is simpler than the other business entities. In general, no VAT registration is needed to start trading as an Autonomo.

Many people start with the Autonomo entity but later switch to a more professional business structure, due to the liability.

Business entities in Spain

Sociedad Limitada (SL) – Private Limited Liability Company

In Spain, the most common limited company is the SL company. SL stands for Sociedad Limitada. It is similar to the US limited liability company (LLC) and the German GmbH, but it has some additional requirements to its structure.

A VAT number is required for the SL. The company must be registered with the Commercial Registry.

Only one person is required to be appointed as a director of the company, there is also an administrator needed. Other characteristics are:

  • The number of shareholders the SL can have ranges from 1 to 50.
  • The minimum share capital is 3,000 Euros.
  • The fiscal domicile of an SL Company is in Spain.
  • The 25% Spanish corporate income tax applies to an SL Company.
  • Shares can be freely transferred.

Disputes between the shareholders can be managed by setting up proper articles of association. A general meeting of the members is required to be held at least once a year. The annual accounts have to be submitted to the trade company registry.

Sociedad Anonima (SA) – Public Limited Liability Company

Just like the S.L company the SA company has limited liability for the shareholders. The S.L however is made for larger corporations (with larger investments), whereas the Sociedad Anonima is meant for smaller companies.

The minimum share capital is 60.000 Euros. 25% of the minimum capital needs to be contributed to the business at the beginning. There should be at least one director and an administrative body present for this type of company.

The public limited company or SA is the business entity most commonly used for public trading. This type of company has an open structure, which means reports need to be made public. This sort of structure is typically constructed to entice investors to do large projects.

Sociedad Limitada Nueva Empresa (SLNE) – New Enterprise Limited Company

The maximum number of partners is restricted to five, and they must be natural persons rather than legal entities. Similar to the other limited entities, there should be a General Meeting of partners and an administrative body.

The Sociedad Limitada Nueva Empresa is simpler than the SL. A drawback of this type of company is that the corporate name will consist of the full name of one of the partners, following the SLNE.

The advantages of this type of company are that it is easier to manage and it is easier to create.

Sociedad Cooperativa

A partnership comprises two or more people and no money is necessary. In general, the members of the partnership are responsible for any financial obligations and the company’s debts. Partners divide the company’s expenses equally among them according to their investment.

In general, civil society is a pact between the participants in which they combine their money, property, and other assets to achieve a shared objective.

To start a partnership, both parties need to make a civil pact before the notary. They will also need to register their economic activity and form a new entity before a notary. In addition, the name of the firm must contain the words “Cooperative Society” or its abbreviation “S. Coop.”

Both parties will carry equal losses and profits, in other words, there is a liability for both parties.

With the collaboration, each party is taxed as an individual and as a self-employed person, not the company. This means that you will be taxed through your personal income tax.

There are many types of partnerships possible, and you can find more information on the IPYME website about these types of legal entities.

Starting a business in Spain

A word from SpainDesk

You can choose from a few different types of company entities in Spain. We’ve outlined the most common ones above. If you need assistance determining which one is best for you or want to outsource the formation of your company to us, our corporate attorneys can assist.

In addition to company formation services, we can also offer accounting services to help you keep track of your company’s finances. Our team can help you stay on top of your business’s financial health, so you can focus on growth.

Disclaimer: Information on this page may be incomplete or outdated. Under no circumstances should the information listed be considered professional legal or financial advice. We highly recommend seeking guidance from a legal or financial expert if you lack extensive knowledge or experience dealing with any of the procedures outlined in these articles.

If you are looking to set up a company in Spain, there are a range of questions that you will likely have. This blog post will provide answers to some of the most Frequently Asked Questions (FAQs) about Spanish Company Formation. We will cover topics such as the different types of companies available, the minimum capital requirement, the procedures for registering a company and more.

Company Formation in Spain

If you are considering starting a business in Spain, it is important to understand the process of Spanish company formation. Spain offers a favorable business climate with a stable economy, strategic location, and access to a large market.

Whether you are a foreign investor or a local entrepreneur, setting up a company in Spain can be a rewarding and lucrative opportunity. However, the process of company formation can be complex and time-consuming, involving several legal and administrative requirements. Below you will find frequently asked questions to clarify your doubts.

Company formation in Spain

What types of shareholders’ companies can be formed and recognized in Spain?

The two main types of companies that are recognized in Spain are the public limited liability company, which is called the Sociedad Anónima (S.A.), and the private limited liability company, which is called the Sociedad Limitada (S.L.).

What is the difference between a Sociedad Anónima and a Sociedad Limitada?

The main difference is that the Sociedad Anónima Company is most appropriate for large companies. In contrast, the Sociedad Limitada Company is a better fit for shareholders that do not need a large amount of capital. However, there are many other differences between the SL and SA as well.

Can I set up a company as a sole shareholder?

Yes, a single person may establish a Spanish firm, and you can be the company’s only director, administrator, and shareholder.

What is the minimum share capital required to incorporate a company in Spain?

The minimum share capital will depend on the type of legal entity you adopt. For the Sociedad Anónima company, the minimum share capital is € 60.000, while the Sociedad Limitada costs € 3.000.

Can I start a different enterprise in Spain through a limited liability company?

Yes, a limited liability company can accommodate almost any type of investment. However, sectors such as pharmaceutical, fund management, insurance, or banking must be carried out through a Sociedad Anónima. Please contact us for help with your incorporation.

Do I have to be a Spanish citizen to incorporate a company?

No, foreigners can incorporate a company in Spain. However, you will need a unique identification number (NIE) to carry on with the process.

How long does it take to incorporate a company in Spain?

Incorporating a company in Spain usually takes 3 weeks. However, it depends on the complexity (i.e NIE requirements and shareholder’s nationality). Also, the timing of the case, bureaucracy, appointments, and validating documents can increase this quite a bit. We can help you speed up this process and reduce your waiting time.

Do I need an address in Spain?

Yes, all companies need a registered address in Spain. If you don’t have one, SpainDesk can provide you with a service address. This is for collecting mail from the tax authorities. We can help you get a post box address, that will forward all your mail to another place without you having to be there physically.

Can I form a company in Spain under a parent company?

Yes, you can, we can register this for you in the by-laws. We can also assist you in reducing your tax burden by advising on the best approach to move funds from the parent firm to the new Spanish business.

What type of company formation is best for a foreign investor?

The private limited company, also known as the Sociedad Limitada (S.L.), is a good option in most cases since it can be run through a foreign country.

Are there any restrictions for foreign investors in Spain?

There are very few restrictions for foreign investors in Spain. However, non-European residents are not permitted to invest in certain critical sectors, such as telecommunications, without a special permit. The labor market, on the other hand, is subject to greater regulation. The maximum working week is 40 hours, and all employees are entitled to six weeks of paid vacation a year.

How old do you have to be to form a company in Spain?

A person must be 18 years old to do a legal Spanish company registration.

Company formation in Spain

What languages does the Spanish government require me to use?

In general, the Spanish government communicates with companies in Spanish. It is, therefore, a good idea to have someone take care of your business in Spain, if you are not familiar with the language.

Do I have to come to Spain for my new company?

No, this is not necessary. We can schedule a meeting with the Spanish consulate in your country, and you’ll be able to sign for the company at a notary in your home country.

What is the procedure for opening a bank account under my company?

A certificate of registration with the Commercial Registry is required to open a business bank account.

How easy is it to recruit staff in Spain for my company?

Recruiting staff and employees is not as easy as in some other countries. It can be difficult to find the right people, and the amount of paperwork is quite extensive compared to other countries. The laws for recruiting and firing staff also make this process very complicated and time-consuming. Payroll rules are different in Spain from other European countries.

What documents will be issued to me after setting up a company in Spain?

The Spanish Mercantile Registry will issue a certificate of incorporation and a document confirming the identity of the company’s shareholders.

What are the company statutes and can SpainDesk take care of them?

The company statutes or the memorandum of association is the internal rule book for your company. It includes how shareholders, directors and board members are selected and the duties, rights and privileges each holds. It also includes rules for taking board resolutions and managerial decisions. We can sign the company statutes at the notary for you through the power of attorney.

Do I have to open a company in Spain if I already have a foreign company?

If you are doing business in Spain, you will probably want to form a company in Spain. It can be a branch of a foreign company or a new Spanish business.

What is the best way to find out more about Spain’s company registration?

Our corporate lawyers are here to help you with your questions. They can answer any questions you might have and give advice on the best way to proceed. We recommend that you consult your lawyer before doing a Spanish company registration, and reach out for help if you encounter any difficulties before starting up.

Do I need a registered office for my company formation in Spain?

Yes, a registered office is a requirement in Spain. This can be an address or a PO Box number and is the place where official notifications for the company are sent to.

What are the main issues I can run into when forming a company in Spain?

Going through the incorporation process for a new company in Spain can be a complex process. Below are some of the issues you can face when forming a company.

  • The complex process of incorporation can be confusing without the help
  • Spanish bureaucracy can be time-consuming
  • Not being properly registered in the mercantile register
  • You need to perform the steps in the right sequence

What are the main requirements when setting up a company in Spain?

The company law stipulates that:

  • You will need to have company statutes
  • You will need an address in Spain
  • You will need to go through a notarial procedure
  • You will need a company deed
  • You will need a company director
  • You will need a share capital, in the case of a Spanish SL this is 3.000 euro

Need help with your company formation in Spain?

If you want to start your company in Spain, we offer a full range of services to help you from the beginning, including company formation, business taxes and legal advice.

SpainDesk can help you with all the paperwork and procedures involved in setting up your business in Spain. We provide ongoing support and advice as your business grows. Contact us today

Disclaimer: Information on this page may be incomplete or outdated. Under no circumstances should the information listed be considered professional legal or financial advice. We highly recommend seeking guidance from a legal or financial expert if you lack extensive knowledge or experience dealing with any of the procedures outlined in these articles.

Spanish companies offer various competitive advantages compared to many other business entities in other countries. With many incentives for foreign investors, establishing a company in Spain can be a tax-efficient and profitable way to conduct business in the EU and beyond. As much as S.A. companies (or Sociedades Anónimas) and S.L. companies (or Sociedades Limitadas) have many similar characteristics, the two most common types of Spanish business entities are not quite the same.

Sociedades Limitadas is the most commonly used business entity option due to organizational flexibility and minimal capital requirements. That being said, the most preferred choice for an investor primarily depends on the expected business activities in Spain. Let’s explore the ins and outs of Sociedades Anónimas and Sociedades Limitadas in Spain.

SpainDesk makes your company formation easy, fast, and worry-free.

Share capital difference between SL and SA

Share capital contributions can be in a wide array of assets including cash, credit rights, and real estate property, among others. S.A. companies (or Sociedades Anónimas) are designed for medium to big enterprises. In this regard, they have a minimum share capital of 60,102 Euros, 25% of which must be paid up during incorporation. The remaining 75% may be settled within a timeframe stated in the company’s bylaws.

For SA companies, owners are free to transfer shares. However, the company bylaws may establish some additional requisites. On the other hand, Sociedades Limitadas require a minimum share capital of at least 3,006 Euros. This must be fully paid before company formation. When it comes to sharing transfers for SL companies, Spanish law provides some limitations concerning the transfer of company shares to third parties. Such limitations may vary depending on the bylaws.

Company bylaws difference between SL and SA

One of the profound differences between SL and SA in Spain is with regard to company laws. SL usually have flexible bylaws. In this regard, the company can contain some variations from the legal regime. On the other hand, SA companies have rigid bylaws in that there are minimal possibilities of having variations to the legal regime.

The company bylaws dictate the attendance and majorities at shareholders’ or partners’ meetings for both S.A. and S.L. It’s worth mentioning that S.A. usually has several calls while there is only one call for S.L.

Company ownership

Sociedades Anónimas and Sociedades Limitadas both require a minimum required appointments of 1 director and 1 shareholder, who can be of any nationality and residence. One of the profound benefits of Spanish S.L. is that the shareholders are liable for the company’s debts only to the extent of their share capital contribution. Also, the business entity allows registration with 100% foreign shareholders.

It’s worth noting that the legal structure and mechanisms to establish and operate an S.L. are less complicated than those of an S.A. It’s thus not surprising that S.L. is ideal for small or family-run enterprises.

Who can start a company in Spain?

Regardless of whether you are a foreigner or a Spanish citizen, you are allowed to start your business in the country. That being said, you have to be a Spanish legal resident. The process can get complicated depending on your region of origin.

When it comes to foreigners, the process of starting a business in Spain is especially straightforward for persons from the European Union.  You are legally required to have NIE and EU registry certificate and then you can start the registration process. Non-EU citizens need a working visa to start a business in Spain.

If you are a foreigner looking to establish a Sociedades Anónimas or Sociedades Limitadas, you might want to consider some business factors including the industry and kind of business the company will conduct, nationality of the owners and employees, and existing trade agreements or relationships.

Company compliance

Every Spanish company is legally required to maintain proper books of accounts. Also, companies must prepare audited financial statements. However, Sociedades Anónimas don’t need to submit to an internal audit. Following Spanish tax laws, every company has to file annual corporate income tax returns.

As a company operating in Spain, you are subject to Spanish social security requirements. Also, you might need particular permits depending on your business activities. More often than not, company compliance is handled by local advisers at a minimal cost.

Separate regions may have varying rules, costs and availability. In this regard, we highly recommend consulting relevant professionals, for example, business advisors, legal experts, accountants and others based on your needs.  Get in touch with SpainDesk and we’ll go through your specific situation, so you know exactly where you stand in terms of legal compliance.


The Spanish tax regime is similar for both SL and SA companies. Taxation for companies in Spain primarily depends on the kind of enterprise you are running. Corporation tax in Spain is usually levied on the worldwide profit realized by the company.

It’s worth mentioning that new companies in Spain benefit from various tax breaks. For example, Spanish limited companies pay a 15% tax on a profit below €300,000 within their first year of operation. The tax is usually 20% on all profits above the €300,000 threshold. After two years, limited companies are liable to pay a general tax rate of 25%.

Dissolution of Spanish Companies

In case the shareholders of Sociedades Anónimas (SA) decide to dissolve the company, the agreement of the company dissolution should be published in the Official Bulletin of the Mercantile Registry and the newspaper. This is not necessary for the SL.

Steps to Registering a Company in Spain

So, what are the specific legal steps when forming a company in Spain? Let’s take a brief look:

Step 1

First, you have to register a company name at the National Mercantile Register. At this point, the relevant authorities will make sure the name chosen is unique. In case the company name is taken, then you have to choose a different one.

Step 2

After successfully registering the company name, you subsequently start drafting the company statutes and by-laws. You can choose to hire a professional to help with this.

Step 3

Get a temporary tax ID number (CIF) for the company.

Step 4

Communicate with the notary. At this point, you review all the necessary documents. Subsequently, all the shareholders or their representatives must sign the necessary documents at the notary’s office.

Step 5

Making payment for transfer tax and stamp duty

Step 6

Company registration process at the local mercantile registry. The company information is then published in the Mercantile Registry’s Boletín Oficial.

Step 7

Finally, you can acquire a permanent tax ID number (CIF) for the company. The entire company incorporation process typically takes 3 weeks. For foreigners, you can choose to avoid the trip to Spain by giving a legal professional of choice the power of attorney.

Due diligence when starting a Spanish company

The majority of local and foreign investors in Spain prefer SL, primarily because of the lower investment needed. Also, company management is much more flexible. That being said, large companies and multinationals may find an SA ideal for their business.

Are you ready to start your investments in Spain? SpainDesk can register the company on your behalf, without even the need to travel to Spain.  As an investor, you want to make informed decisions, especially regarding the best corporate structure for your firm. We provide a one-stop shop where you can get all the relevant formalities done professionally and hassle-free!

There are many steps involved with creating a company in Spain. We can make it easy for you with our company formation service. Next to this, we offer legal and accounting services. This way you can focus on your business. Contact us for an appointment with our team.

Disclaimer: Information on this page may be incomplete or outdated. Under no circumstances should the information listed be considered professional legal advice. We highly recommend seeking guidance from a legal expert if you lack extensive knowledge or experience dealing with any of the procedures outlined in these articles.

SpainDesk makes your company formation easy, fast, and worry-free

The Spanish company registry, or “Registro Mercantil“, offers transparency and allows the public access to information about companies in Spain.

An owner of a company can’t keep the information about his business a secret, everybody can find out basic data such as the name of the company, its activity, its managing director, and its shareholders.

Questions about Company Registry Spain

Company Registry Spain: Doing a Company Search in Spain

What is the Spanish Company Register?

The Spanish company register is a public registry that records the information of all companies in Spain, including sole traders (freelancers).

Who can search the Central Mercantile Register?

The public registry is open and accessible to anyone, regardless of whether they want to search for a specific company or check out how their competitor is doing.

How to register your company with the Mercantile Registry?

When forming your company in Spain, you will need to register it with the Spanish company registry. The first step for registering a business in Spain is getting your NIF (CIF), an identification number that will be used by the commercial registry as well as the Spanish tax office.

How does the Registro Mercantil work?

The Registro Mercantil collects and stores the basic information of all Spanish companies. It offers transparency and allows the public access to information about every business, from small units to large corporations.

The Spanish company register is open to the public, so everybody can find out basic data about a business entity that interests them. You can search for companies in the Spanish company register by name, industry, and location.

What can you do at the Registro Mercantil?

There are many things you can do there, depending on what you need.

  • When you want to start a company

    The first step in starting a business in Spain is to go to the Central Mercantile Registry and request a name. If you are not sure if your name is taken you can have a look in the Spanish Commercial Registry to see if it is available.

  • If you want to know if a company is active

    You can either search for the company by name or NIF number (CIF). If you are searching by name and it’s not available, try adding an ‘S’ at the end of the name. This is, if you are searching for “Sociedad de Gestion”, try also searching for “Gestion S” or simply, “Gestion”.

  • If you want to know the directors and owners of a specific company

    You can also search by name and NIF number (CIF). If you don’t know the exact name use one or two first letters and choose between “Possible Individuals” or “Possible Legal Entities”. Notice that you can only access information about individual people if you have a legitimate interest.

  • If you want to check the company’s solvency and creditworthiness

    You can request their balance sheet which will show you all of their assets, liabilities, credits, and guarantees in addition to the names of the current directors/owners.

  • If you want to check if a company is registered or not

    You can search for its entity number which will tell you whether the company was successfully formed and is currently active, inactive (dormant), dissolved (liquidated), or bankrupt.

  • If you want to know which companies operate in certain industries or specific business activities in Spain

    The company register also offers lists of companies in certain industries, for example, the list of companies operating in different areas (districts) throughout Spain, or the list of car dealers.

How can a company register with the Registro Mercantil?

To establish a company in Spain, you must file it with the Registro Mercantil Central. The method of company formation in Spain is guided by a set of paperwork that must be signed by the company’s officials. Among these are the information of the shareholders, and articles of association. If you need help with company formation we can help you. Contact SpainDesk.

Company Registry Spain: Doing a Company Search in Spain

What types of companies are registered in the Trade Register in Spain?

The mercantile register regulations require every company in Spain to be registered here. The most frequent type of business entity registered in Spain is the limited liability company. This business form offers some of the best conditions for entrepreneurs and may be used for a wide range of commercial purposes. Other popular company entities that you can find in the Spanish central mercantile register are sole traders, partnerships, and public limited companies.

Types of company registers in Spain

You can find company information in different places. Below are the most popular types of registers that you can look for companies in:

  • Registradores: This type of register is the most widespread and populous, so it’s useful if you want to find information about companies in certain areas (provinces).
  • RMC: the commercial register in Spain is a database with all the companies which have an R.M.C. number. You can obtain this information by going to any local commercial registry office or requesting it from the Spanish Commercial Registry (RMC).
  • BVDinfo: This website provides a list of all companies registered with the Spanish Trade Registry. You can find the company code, its NIF number, and date of registration, among other data.
  • EBRA: The European Business Registry Association (EBRA) is a database similar to the Spanish commercial register. It offers company data in all EU member states.
  • Infoempresa: Infoempresa is a website with information on companies and business activities. It also includes the list of companies operating in certain areas (districts) throughout Spain or the list of car dealers.
  • Companysearch.es: this is another website that provides information about companies operating in Spain. You can find clearly what kind of information is included on their website.
  • Info-clipper: Info-clipper is another site with company information on Spanish companies. It also offers information about companies from other countries.

As you can see there are many options to find information on companies in the Spanish central company register. The official Registro Mercantil is a safe choice. However, other sources might have more information available.

How reliable are the documents in the Spanish Company Register?

The central commercial register in Spain is public and open to all, so anyone can request information about a company. In general, the data is reliable and authentic, especially when it comes from a governmental source like the Central Registro Mercantil.

Still, sometimes we come across information that we believe is inaccurate or outdated. We also see some cases where the documentation on a company isn’t available, even though they are legally required to keep it up to date and accessible to everyone. This can happen because of database errors or a company incorporation process that went wrong.

What are the costs involved with the company register?

There are small costs involved in accessing several of the services offered by the company register. Depending on the number of companies you want to see, the price will increase. The price can also increase when you want to find different types of company documents.

What company documents can you find in the company registry?

Company documents you can find in the mercantile register are:

  • Company financials such as the filing of annual accounts and legalized official books. Balance sheet, income statement, annual report, changes in equity, and cash flows.
  • Registered office
  • Brands under company
  • Social capital
  • NIF-IVA number
  • Representatives, directors, attorneys, and contacts
  • Stock data for listed companies
  • Original filings/images
  • Detailed corporate structures
  • Business activity

What do you need for a company search in Spain?

You can search for Spanish companies by company name, key officers, NIF (CIF) number, finance, and even by business activity. If you need to know what kind of company is this and its legal status you will find the required information in the National Company Register (Registro Mercantil).

Disclaimer: Information on this page may be incomplete or outdated. Under no circumstances should the information listed be considered professional legal or financial advice. We highly recommend seeking guidance from a legal or financial expert if you lack extensive knowledge or experience dealing with any of the procedures outlined in these articles.

Opening a new office? With the right planning and execution, it can be a very successful move for your business. Here are a few tips to help make sure your new office is off to a good start.

1. Evaluate the need

Opening a new office abroad can be challenging, especially for companies that are not familiar with the local business landscape and regulations. To successfully establish an overseas presence, it is first important to evaluate why you need the office in the first place. Some key considerations include:

  • Is there potential for growth in the market?
  • What is the level of competition?
  • What are the business regulations?
  • Are there any existing trade barriers?

To get an idea you can research market research reports, speak to other companies that are already operating in the market, or hire a consultant to help you evaluate your options.

2. Legal and tax considerations

Establishing a new office in a foreign country can be a complex process, and there are several legal considerations that must be taken into account.

First of all, it is important to obtain the necessary permits and licenses from the local authorities.

Additionally, it is essential to comply with all applicable tax regulations, failure to do so could result in severe penalties. Therefore it is a good idea to get accountant services on board to help with this.

Furthermore, it is important to ensure that all of your employees have the proper work visas and other documentation before they begin working in the new office.

Finally, companies must also be aware of any employment laws that may be applicable in the new country. For example, there may be restrictions on hiring foreign workers or specific requirements for providing employee benefits.

It is advisable to consult with a local attorney to ensure that you are taking all of the necessary legal steps to establish your new office. They can assist with the company formation, obtaining the required licenses and permits, and drafting any necessary employment contracts.

2. Research the cost of opening an office

An important step is to research the cost of opening an office in your target location, including all essential expenses such as rent, taxes, and equipment costs.

You will also need to assess the feasibility of staffing your office with local employees versus hiring workers from your home country or outsourcing some or all of your administrative functions.

Additionally, you should think carefully about how to manage your budget so that you can maximize efficiency while minimizing expenses. By taking these steps early on, you can rest assured that you have calculated all of the necessary costs associated with opening a new office abroad and have planned accordingly.

3. Find a location for your office

There are a few factors to keep in mind when searching for office space abroad.

First, consider the amount of space you will need and the type of layout that will best suit your needs.

Then, take into account the accessibility of the location, both for employees and clients.

It is also important to consider the cost of rent and utilities as well as any special permits or licenses that may be required. The cost of living surrounding the area should also be considered, as relocation can be a big expense for employees.

5. Furnish and equip your office

If needed you need to furnish and equip your office. First and foremost, you need to have an adequate amount of furniture and equipment in order to support day-to-day operations. This includes items like desks, chairs, computers, printers, and filing cabinets, as well as smaller but no less important pieces like doormats, wastebaskets, phone chargers, and extension cords.

Additionally, it is important to account for any specific needs that your employees may have based on their roles within the organization. For example, if you have salespeople who regularly travel overseas on business trips, you should consider investing in sturdy suitcases and packing materials that can stand up to frequent use.

With a little foresight and preparation, you’ll be ready to hit the ground running once your new workspace opens its doors!

6. Hire employees

If you’re planning to open a new office abroad, one of your priorities should be to hire employees. But before you start the hiring process, it’s important to do your homework and research the local labour market. What skills are in demand? What salary levels are typical for the positions you’re looking to fill? Once you have a good understanding of the market, you can start the process of recruiting and interviewing candidates.

Even if you don’t speak the local language, it’s important to have at least one person on your team who does. This will help ensure smooth communication and avoid misunderstandings with the local community. In addition, be sure to check with your company’s HR department to find out what laws and regulations apply to hiring employees in your new location. By taking the time to do your homework and plan ahead, you can ensure a smooth transition for your new office abroad.

7. Train your current employees for expansion

One important step in expanding to a new location is ensuring that your employees are prepared and trained for the transition. After all, they will be responsible for representing your business in this new environment, so they need to be fully equipped to handle any challenges that may arise.

Some strategies for effective training include providing role-playing exercises for your current employees, which gives them the chance to practice their skills in hypothetical scenarios involving coworkers or clients from the new country.

Another useful technique is giving presentations on local cultural norms and etiquette in order to help current employees understand what is expected of them during interactions with customers from that region.

Overall, by investing time and resources into employee training for an overseas opening, you are sure to reap many benefits down the road.

Spain is the ideal place for foreigners from around the globe to start their own company. Excellent infrastructures, internationally renowned talent, and an entrepreneurial ecosystem make Spain a favoured choice. Having a business idea is great, but starting a business in Spain is not as easy as it sounds. In this guide, we discuss the most important steps and answer frequently asked questions. This guide will cover all you need to know, from the company formation to the accounting and bookkeeping.

The attraction for starting a business in Spain

Foreign investors and foreign companies that move to Spain want to expand in the attractive local market of Spain. Spain has an ideal landscape with incredible weather and an affordable lifestyle. Which makes it attractive for foreign investors to start a company and employees to work at. Spain’s business culture is liberal and very open to new opportunities, and foreign investments are always welcome.

So you are ready to take the leap and start a business in Spain. Whether you have made a business plan or want to extend your parent company with a local office. The steps you should take to successfully incorporate your company in Spain are tricky and not straightforward. This blog discusses the steps needed to set your company up properly and provide answers to FAQs. Read the following simple steps that will help you navigate through the process of starting your business in Spain. After covering the steps, we will discuss what kind of businesses are popular to start in Spain.

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Starting a business in Spain

Apply NIE (Foreign Identification Number)

Whether you’re an EU citizen or a Non-EU citizen, you will need to obtain your unique Foreign Identification Number /Número de Identificación de Extranjero (NIE). A foreign identification number is one that every Spanish employer and a self-employed person needs. You can get your NIE at the Oficina de Extranjeros (Foreigners Office). This process may take up to two weeks, depending on which location you want to get it.

You can get the NIE number also through the consulate in your home country or the Spanish embassy. When you are dealing with a Spanish embassy, we recommend that you make a reservation for an appointment.

Usage of the NIE number

You need the NIE number to open a business bank account in Spain, get the company formation number (NIF or Numero de Identificación Fiscal), and open a corporate business entity. It also serves as your personal tax identification code and is needed to do your personal income tax return. Doing your personal tax return is obligatory in Spain, whether you’re a business owner or not. Besides that, you need it when dealing with any government authority. It is your identification code on all kinds of governmental and medical forms.

The NIE number differs from the NIF number, a company tax identification number. Starting a company in Spain requires you to get yourself an NIE number and then apply for a NIF (company tax ID) at your regional revenue office, called Agencia Tributaria.

The NIE format has ten characters, begins with a letter and ends with a letter.

Registering a company in Spain

Getting your NIF number (Tax number)

The Spanish NIF number is the equivalent of a Company’s Tax Number and is required to start paying taxes. The NIF number is necessary for the limited legal entities and not for the individual owner of the company.

To set up a company in Spain, after you get a NIE number you need a NIF number. The NIF number helps the tax authority identify your company for all kinds of tax purposes, such as paying corporate income tax. Corporate tax is payable by the company, not by its shareholders.

The first step to get it is gathering all your personal documents. These include your passport, ID card, and NIE number. Then you fill out a NIF request and present it to a local company registry office together with your personal documents.

The application process may take between one and two weeks, but some offices are faster than others. Make a copy of everything before handing it over; they usually want the originals back after checking them. You can bring your documents in person or by mail.

Getting the NIF through the embassy can be done at your nearest Spanish consulate. Make sure to make an appointment first before heading there. The process usually takes up to 15 days to submit all the necessary documents. Make sure that you have all documents required at hand. It doesn’t hurt to check beforehand if they are up to date.

The CIF number ‘Certificado de Identificacion Fiscal’ is another tax identification number, but the Spanish tax agency replaced it with the NIF number. You can both use a CIF or NIF number to pay tax.

Local Tax Office in Spain

Choosing the type of company you want to start

After getting your Spanish tax identification number, you must choose a business form. There are many different business structures you can choose from, and the Spanish legislation already becomes tricky here. There are two main categories. The first is for self-employed individuals, the second one is limited liability companies.

The general types of legal entity structures you can choose from in Spain are:

Business structures for individuals

  • Sole trader – Empresario Individual (Autónomo)
  • Joint owned company – Comunidad de Bienes
  • Private partnership – Sociedad Civil Privada

Business structure for corporations

  • Limited liability company – Sociedad Limitada (S. L)
  • Public limited company – Sociedad Anónima (S. A)
  • Worker-owned company – Sociedad Laboral
  • Cooperative company – Sociedad Cooperativa
  • General partnership – Sociedad Colectiva
  • Limited partnership – Sociedad Comanditaria

Other unique types are

  • Branch Office
  • Private partnership – Sociedad Civil Privada

The Autónomo (self-employed worker) is the most straightforward legal regime for a sole trader or self-employed person. You will have the same liability as a natural person with this business form. It doesn’t have a minimum investment required, and you don’t need to prepare a balance sheet or an annual report. Therefore it is easier for you to deal with the Spanish tax authorities. It is mandatory for you to keep a registered book of all the issued invoices and a book of sales and income to collect all the invoices and income that you are issuing or receiving in the development of your activity. Also, if you do not have a residence permit in Spain, you can get a self-employed worker visa in some cases. In this case, though, you must show that one or more Spanish firms have signed up for your services.

The Sociedad Limitada (SL) entity is the most popular corporate legal entity for companies in Spain. The SL is also popular for foreign investors and as a parent company because of the limited liability. The company incorporation of the SL is complex and, therefore, involves a business lawyer. It has a minimum share capital investment of at least 3,000 euros. You can set it up with one single shareholder or several shareholders who all have unlimited personal liability if the company goes bankrupt. It is the go-to Spanish Limited Company.

Choosing your company name

After choosing your company’s name in Spain, it is necessary to check if someone has already used that name before. You can do this by going over all past and current trade names at the Commercial Registry (Registro Mercantil). Our service also includes this step, so you don’t have to worry about this. We only need you to think about four other possible company names. This is in case your first choice is taken.

Registering a company name

Drafting the company’s Bylaws or Articles of Association

Think about this step if you incorporate a corporation, such as a Spanish SL. When you start a Limited Liability Company in Spain, it is required for you to have company Bylaws and Articles of Association.

This document collects the essential information that will govern the operation of a company. In other words, it will include all the rules applicable to your business. Your lawyer will draft the company’s Bylaws or Articles of Association in Spanish called the “Estatutos Sociales”. Once this document is ready, you will be given your company name of choice by the Mercantile Register, and you will invest the minimum capital share (if required). The company owners will sign the Bylaws and Articles of Association before the Spanish notary.

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Get a certificate from the Spanish Mercantile Registry

Registering a company with the Spanish Mercantile Registry will get you your certificate so you can do all kinds of business activities in Spain. The digital certificate is created to verify identity using an ID card or passport. It is an online identification document that will allow you to carry out any procedures, including filling in the specific document and signing it, with the Spanish Tax Authorities over the Internet.

When you have registered the company, you will receive a copy of the public deed in which your name will be listed. This public deed is also called Memorandum of Association / Deed of Incorporation. It includes, amongst others, the company name, names of the shareholders, business activities, company objects and powers, for instance, who holds the manager/administrator charge in the company.

This will make it easier if you are ever asked who owns what part, especially when someone asks for money or wants to sell their share of the company. This could also be useful should there ever be any legal proceedings against the company.

As a foreigner, you have to register your company in the Commercial Registry (Registro Mercantil) within 30 days from its foundation. To do this, all shareholders living abroad need to get their copy of the public deed authenticated by a notary who is legalised by an Apostille or legalised with the Spanish Consulate where they live.

The Spanish Tax Authority

The Spanish tax agency can also get information from the Commercial Registry (Registro Mercantil). This means that they can easily determine how much you paid for your assets, who owns what percentage and other details about your business structure. They will also be able to see what type of legal entity it is, such as a sole trader, limited company or another form.

The local tax office will also see which taxes have been paid and when. This can come in handy if you ever get audited by the tax office because they would already know all your details – saving yourself time explaining how everything works from scratch.

Open a Spanish bank account

According to the law, opening a bank account isn’t strictly necessary when you start a business in Spain. However, in the specific case of the SL, for instance, to establish the company, it is required to invest a minimum capital share of EUR 3.000. Usually, you will put this share capital on a new business bank account. Also, it makes sense since it will be easier for you to analyse your results and manage your business. In general, you can’t easily navigate your day-to-day business activities without having a bank account. The bank will only request the certificate stating the company name to open it.

Having a Spanish business bank account gives you a better overview of your costs, revenue, profits, and tax payments. Furthermore, you can get help easier on your bookkeeping by linking your account to an accountant system.

If you are looking for a bank in Spain suitable for your company, we can assist you with the whole procedure. From choosing the right bank to setting up an appointment, we can make it as easy as possible for you.

Get a Spanish sim card or phone number

When you are coming from outside of Europe, it is smart to save costs by getting a Spanish sim card or phone number. This is useful for your business since you can save money on international calls. The Spanish mobile phone market offers prepaid sim cards, which are an easy way of getting a local number and keeping the costs low compared to having an office or renting one.

If you feel more comfortable owning your landline telephone, it might be better to get a fixed-line telephone service (Servicio de teléfono fijo). However, this will cost significantly more than just using pay as you go services such as Vodafone, Movistar, Orange and Yoigo offer. You can also get a discount deal by getting the internet connection simultaneously set up at your business premises. We can help you get your Spanish sim card or phone number as well, so you are set up properly right away.

Investing in Spain

Getting a postal address/register property at the authorities

The next step is choosing an official postal address. This will be where you get all correspondence and notifications, for instance, letters from the tax authorities. Your business premises can also serve as your postal address, a post office box is also okay. Don’t confuse the postal address with your business address, which is the ‘Domicilio Social’, the place where the main administration and operation is located, not just an address for notification purposes. You only find the ‘Domicilio Social’ in corporations, not with sole traders.

It is important to use the Spanish name of your company in the registered office address. Getting a registered postal address is essential for starting a business in Spain. Our experts are ready to provide you with a solution.

Filing your Tax Declarations, Forms and Annual reports

Whether you are a sole trader, limited company or have any other business form, you must fill in certain tax forms. Different regions in Spain have different tax laws and tax rates, and therefore we advise you always to consult an experienced company formation agent.

In general, sole traders (freelancers) have the following tax obligations

In general, limited companies have the following tax obligations

  • Impuesto de Sociedades (IS) – Generally 25%
  • VAT (IVA)
  • Annual report (or ‘certificado de existencia y representación’ in Spanish)
  • Different tax forms (i.e. importing products, renting, and buying property forms sometimes have to be filled)

At SpainDesk, we have a team of tax advisors offering a wide range of accounting services, including VAT registration, audit services, the preparation of the annual financial statements, and tax minimisation solutions. Our accountants can take care of the tax compliance in Spain for you.

Next to the tax obligations, there are also other forms (Modelo’s) that may need to be filled.

Business Taxes in Spain

Set up an online accounting system at the start of your business in Spain

We can help you set up an online accounting system at the start of your business in Spain. Starting a company or opening a bank account without an idea of what’s going on in your finances is not only confusing but also risky and potentially costly for your business. Technology solutions have improved every aspect of bookkeeping. Businesses need an intelligent accounting solution that is fast and reliable.

By linking to our professional accounts team through cloud-based technology, we can make sure that you have one less thing to worry about during this important stage as well as provide more time to focus on growing your new Spanish enterprise while keeping track of all transactions and expenses.

Contact us to enjoy numerous benefits of our accounting solutions, including real-time reporting, access to an online accounting system, scan modules, and the latest financial information that aids business decisions. We can also offer you a very basic accounting and bookkeeping services package to get you started. We can understand that you don’t want to run up costs when you first start a business in Spain, which is why our basic services will provide you with the essential tax declarations and most basic guidelines that you need.

Commercial contracts for your business

There is a need of dealing with business contracts and conditions when starting a business in Spain. For your now existing company, the sales and purchase contract is probably the most important one. Contracts for providing services, leasing a property or buying a Spanish company are also very common in Spain. Other commercial contracts can be about providing certain services/ products or buying a company.

Drafting contracts

When dealing in the Spanish local market it is important that contracts are drafted in Spanish and checked carefully by a legal professional with experience in dealing with such business matters before they are finally signed.

At SpainDesk, we can prepare all types of commercial contracts and conditions for your Spanish company. We provide accurate advice that will protect your interests while maximising the benefits from the agreement throughout its period.

We have a wide range of services related to legal aspects in business matters, such as property transactions or employment law issues. Our team is always available to provide you with accurate advice and guidance to protect your interests in business matters, including commercial contracts. We will make sure that you are aware of the legal requirements of terms and conditions as well as any new clauses required by law.

Signing contracts

When you are not an expert, always seek legal advice before signing commercial contracts. It is important to have a Spanish legal professional review the contracts and conditions before they are signed. While it may seem like an unnecessary step, having someone look over your contract terms will help ensure that you do not miss any potential issues that could cause problems for both yourself as well as the other contracting party in future.

Next to this, we can also represent your company and sign contracts through the Power of Attorney. If you are the manager of a company in Spain but cannot sign contracts, we can help. The Power of Attorney is an important document that allows someone to perform certain acts on your behalf. Contact us today for more information about our services and benefits.

Commercial contracts in Spain

Payroll administration and management

When you want to have personnel working for you, you need a structured Spain payroll plan. You will have to make sure that everything is legally correct, and you meet the payroll requirements set by law. Payroll administration is defined by the Spanish government as a set of measures, processes and controls that the employer must ensure are followed with regards to salaries paid to employees.

As your company grows in Spain, you will be responsible for more people working for you than just yourself or other partners from time to time. Starting up a business is always challenging but having personnel on staff will certainly help.

Our payroll management in Spain will make sure your payroll-related activities are completed in a timely manner with as little disruption to business operations and resources as possible.

Spanish payroll administration services

Our lawyers, accounting, and recruitment experts are ready to assist you with the following services.

  • Salary payments.
  • Calculation of salaries and tax deductions.
  • Preparation of payslips, including those in English or Spanish language.
  • Creation of employment contracts.
  • Timesheet calculation and management for employees that are required to hand in timesheets at the end of every month or week depending on their contract terms.
  • Preparation, printing and mailing of reports.
  • Payment of employers’ Social Security contributions.

If you would like to know more about our payroll management and services, please do not hesitate to contact us today for a free consultation. We provide guidance on the most suitable solution that meets your needs based on your company.

You will get an optimised solution for payroll management that helps your business run smoothly.A fully automated solution will ensure compliance in your payroll administration as well as management throughout the year, even if numbers change or new regulations are introduced during the year.

Employees on payroll in Spain

Social security management

Social security is an important aspect for people that work in Spain. If you or your employees work in Spain, you will have to be registered at the Spanish social security authorities.

Social security contributions are paid every month and paid by the employer. So in the case you own a business, you will need to pay contributions for your employees via their payslip.

At SpainDesk, we can help our clients every step of the way with their business. These steps include the payroll and social security part. We will ensure that social security payments are correct and that you know all the rules and regulations related to labour law. We offer a wide range of services in social security management for both companies and individuals, such as:

  • Social Security registration in Spain
  • Preparing and submitting Social Security declarations
  • Calculating employers’ and employees’ Social Security rates to the corresponding Spanish Government Agencies.

SpainDesk will always keep you updated on the payments that should be made and prepare all necessary documentation for your employees’ social security, employers’ and personal contributions to Spanish authorities promptly matter.

You must register at the RETA as a freelancer and registered as an Autónomo. We can also help you with this registration and tell you which amount you need to pay.

Limited Liability Company in Spain

Do you want assistance with starting your business?

With most of the above points, we can assist you. If you need more details about starting a business in Spain, you can contact SpainDesk. Our experienced team has an excellent record for concluding business agreements and contracts for foreigners to start in Spain.

Frequently asked questions

How much does it cost to start a business in Spain?

Our company formation services in Spain cost 1.500 euros and upwards. It depends on the type of company and services you need. This price includes all legal costs, administrative fees and accounting services like VAT registration, bookkeeping accountancy or audit service within a year. Starting a business in Spain doesn’t have to be expensive with us. Contact us, and we will give a price that fits your unique situation.

Starting a business in Spain takes approximately three months if you do it as an individual. You will need to be physically present, deal with the notary yourself, and fill out various legal forms. Starting a business by yourself is not easy, especially if your legal Spanish language skills aren’t good enough.

What do I need to pay when starting a business in Spain?

When you start a business in Spain, some legal costs are involved. These include the cost of registering a company in Spain and setting up an office space. Getting electricity, water, and an internet connection can also be expensive. As with every country on our planet, you have to pay business taxes when you have a business.

Can foreigners start a business in Spain?

Foreigners can start a business in Spain, and non-residents can also own a business. Business registration for non-residents can be more challenging and lengthy.

How long does it take to start a business in Spain?

The whole process of starting a business from scratch usually takes around three months. Starting a business in Spain as an individual can take up to six weeks because it takes time for you to receive your company’s number, which is called NIF/CIF (Número de Identificación Fiscal). While depending on the circumstances, starting a business with us will take around a month, and we will assist you with the whole process.

Is it easy to start a business in Spain?

Starting a business in Spain is easy as long as you have the right support. When speaking about the limited liability company, starting the business on your own can be very complicated and time-consuming because there is much to do. The paperwork you have to fill in will be in Spanish, but we can assist you with the whole process. Starting a business with our team makes the whole process much easier for you because we take care of all the legal steps and paperwork.

Is Spain a good place to start a business?

Spain is an attractive place to start a company. Starting a business in Spain is not only easy but also relatively cheap. The Spanish market has been growing for the past years and it becomes more international every day. Popular business industries in Spain are energy, IT and tourism. You can also find many businesses in the food industry, the automotive industry, clothing industry and real estate industry.

Do I need a business visa to have a company in Spain?

No, you don’t need a visa when starting a business in Spain. Yet, starting your own company is a way for foreigners to live and work legally in Spain. In any case, if you stay longer than three months in Spain, you need a visa. You can get a business visa within two weeks, and we will assist you with all of the administrative steps that have to be done correctly before opening your bank account.

As a foreign company, do I need to pay income tax?

Starting a company in Spain means paying taxes on profits if you are generating income from the Spanish market. When you are a foreign citizen and profit, you will also need to pay income tax.

What type of taxes do I need to pay when starting a business in Spain?

When registering a company, companies usually hire an accountant in Spain who will assist them during their first months (or years) of operation by preparing the monthly accounting reports required by law. Once your new company has been formed it’s automatically registered with tax authorities. You will then need to file your taxes and forms (Modelo’s). The type of taxes and forms you need to file depends on the type of business and your activities.

Business in Spain

Do I need legal assistance when starting a company?

When starting a company it’s always recommended to get legal assistance. Starting a business in Spain can be done as an individual, but this requires understanding the process, which includes Spanish paperwork and legal documents. It requires a significant amount of due diligence on your part. It’s normal (for Spanish citizens) to get help with starting a business, so it is highly recommended for a foreigner.

It’s always recommended to get assistance when starting a company, especially when making a foreign investment. Next to helping with the company incorporation, it is also smart to get an accountant and bookkeeper involved and let them guide you in dealing with the Spanish Tax Office, or your local tax authority.

What are the benefits of the Spanish Limited Liability Company?

The Spanish limited liability company has the following main benefits:

  • Limited Liability: Shareholders only can lose their investment
  • Foreign Investors: Foreign investments can own 100% of the company
  • One shareholder: The minimum of shareholders is one
  • Low capital investment: The minimum share capital is 3.000 euros
  • Flexible Management: The minimum number of administrators is one

What are the benefits of the Spanish Sole trader (Autonomo)?

The Spanish sole trader has the following main benefits:

  • Low capital investment: The minimum share capital is 0 euros.
  • Flexible Management: There is no minimum number of administrators. You only have to hire a bookkeeper who prepares your accounting reports at least once per year and sometimes an accountant/lawyer for advice on taxes and legal affairs.
  • Deductibles on profit: You can deduct the costs of normal business activities such as telephone bills, office equipment, and supplies.
  • Easy to set up: Starting a sole trader business in Spain is easy and quick, you can do it with a minimum of documentation.
  • Social security coverage: Starting a business in Spain as a sole trader entitles you to social security coverage.

Where can I find my local tax office in Spain?

Tax administration in Spain is decentralised, and you can contact your local tax office for any questions or concerns. Regional tax offices in Spain are responsible for different aspects of taxation, such as SUMA offices in Alicante or ATC offices in Catalonia.

Do I need a business plan when starting a business in Spain?

It is not a legal requirement to register a company in Spain. However, starting a company without anything written down can result in a confusing situation and problems if something doesn’t go as expected.


Starting a business in Spain can be great. Spain has an interesting local market and expanding international business culture. The main business structure, the Limited Liability Company (SL) offers many benefits. These include that it can be run by any number of shareholders (including foreigners), with only one administrator, who must have less than 3.000 euros invested. Being a freelancer in Spain also has its perks: you’re not required to invest capital upfront or hire administrators; just make sure you get advice from lawyers and accountants when dealing with taxes and legal affairs.

At SpainDesk, we can help you for a fair price as your business advisors, business lawyers, bookkeepers and accountants in Spain. While we have explained a lot in this guide, we do recommend you waste any time and money figuring everything out yourself. We would love to help you get your company registered and provide you with all the necessary advice to run a successful business in Spain.

Disclaimer: Information on this page may be incomplete or outdated. Under no circumstances should the information listed be considered professional legal advice. We highly recommend seeking guidance from a legal expert if you lack extensive knowledge or experience dealing with any of the procedures outlined in these articles.

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Spain is a great place to start a business. The country has a rich culture and history, and it is home to some of the world’s largest companies. There are many different businesses you can start in Spain, and each one has its own unique set of challenges and opportunities.

Popular businesses

The most popular businesses in Spain are tourism-related businesses. Spain is a popular tourist destination, thanks to its sunny weather, stunning architecture, delicious food, and friendly people. There are also many opportunities in the Spanish market for retail businesses, technology companies, and manufacturing firms.

1) Restaurants

Spain is a great place to start a restaurant business. The country has a rich culture and history, and it is home to some of the world’s most renowned chefs. There are also many different types of restaurants you can start in Spain, and each one has its own unique set of challenges and opportunities.

Why it can be profitable

Starting a restaurant in Spain can be very profitable for several reasons. First, the country is a popular tourist destination, and restaurants are always in high demand. Second, the Spanish market is growing rapidly, and there are many opportunities for new businesses to succeed. Finally, the cost of doing business in Spain is relatively low compared to other countries in Europe.

Tourism business in Spain

2) Bars and nightclubs

Spain is a great place to start a bar or nightclub. Like restaurants, bars and nightclubs are in high demand in Spain because it is a popular tourist destination. Also, restaurants, bars, and nightclubs have a lot of competition in the Spanish market. Although there are many opportunities for success, you will need to offer something unique to stand out from your competitors.

Why it can be profitable

Bars can make a lot of money because they offer a unique service that people are willing to pay for. They provide a place where people can relax and socialize with friends, which is something that most people enjoy. Additionally, bars are relatively cheap to operate, so they are able to keep their prices low while still making a profit. Finally, the Spanish market for bars is growing rapidly, so there are many opportunities for new businesses to succeed.

3) Online businesses

The most popular type of online business in Spain is the e-commerce business. There are many opportunities in the Spanish market for businesses that sell products and services online. Additionally, there are many Spanish companies that are looking to expand into the online market, so there is a lot of potential for growth.

Why it can be profitable

There are many ways to make money with online businesses. One way is to sell products and services online. This can be done through e-commerce websites or through social media platforms. Additionally, many Spanish companies are looking to expand into the online market, so there is a lot of potential for growth in this area. Another way to make money with an online business is to sell ads on your website. This can be done by placing ads on websites, or it can be done through other means like search engine optimization (SEO). Selling ads directly from a website is very profitable and can bring in a lot of revenue.

Hotel business in Spain

4) Hotels

There are many reasons people might want to start a hotel business. Perhaps they are passionate about travel and want to help other people experience the world. Maybe they have extensive experience in the hospitality industry and want to use their knowledge to start their own business. Or, it could be that they simply see the potential for success in the hotel market and want to capitalize on it.

Why it can be profitable

Starting a hotel is an excellent business opportunity in Spain because there is a high demand for hotels. It’s estimated that the tourism industry generates nearly twelve percent of the country’s gross domestic product (GDP), and around 12 million people visit Spain every year. That means more than ten million overnight stays per year, generating approximately €20 billion annually.

5) Tourist attractions

People might want to start a tourist attraction because they are passionate about travel and want to help other people experience the world. Perhaps they have extensive experience in the hospitality industry and want to use their knowledge to start their own business. Or, it could be that they simply see the potential for success in this market and want to capitalize on it.

Why it can be profitable

Another reason people might want to start a tourist attraction is that there are many opportunities in the Spanish market. Spain has thousands of attractions, whether they are natural or man-made. They range from cultural and historical sites to outdoor activities. Because of this, there is a huge market for tourism in Spain.

6) Clothing stores

Spain has a lively fashion industry, with many fashion designers coming up with new designs every year. There are many Spanish fashion magazines, and people are very fashionable in general. This makes the clothing market attractive for big and small businesses. Brands like Zara and Desigual have done very well in Spain, and that is because people like to shop here.

Why it can be profitable

There are many reasons people might want to open a clothing store in Spain. One reason is that there is a large market for fashion in Spain, especially among young people. Another reason is that this type of business gives the entrepreneur the ability to connect with customers directly and get instant feedback about their products or services

7) Electronics stores

There are many reasons people might want to open an electronics store in Spain. For one, the market for technology is growing rapidly. People love their smartphones and tablets, so if you own a business that provides these types of products, there will always be customers coming through your doors. Furthermore, if you can differentiate your product or service somehow, you will have a large advantage over your competition.

Why it can be profitable

Electronic devices are always in demand, and even more so in Spain where people are very technologically savvy. Competition is not too high for this type of business, especially if you sell products or services that your competitors do not provide yet. Succesful electronic stores in Spain include Carrefour and Media Markt.

8) Furniture stores

People might want to open a furniture store because they see potential in the Spanish market. Furthermore, there is an increasing demand for quality furniture, both locally and internationally. Furniture stores are especially popular around Christmas time, as people decorate their houses with new items. The margins on this business are high, which

Why it can be profitable

Furniture in Spain is very attractive and unique. People like to combine modern styles with pieces that are rich in history and tradition. This makes the furniture industry one of the most profitable industries, as the margins can be very high. Furniture can be seen as art, and people are willing to pay for it.

9) Car dealerships

Spain has its own car industry, and that is a good reason people might want to open up a car dealership. Furthermore, if you sell exclusive brands, your store will be highly profitable as the demand for those products will be high. People love their cars, so it’s a good idea to open up a car dealership if you want to capitalize on this strong passion.

Why it can be profitable

Car businesses in Spain might be profitable because people love their cars, and there is a large market for second-hand cars as well. Many affluent families have at least one luxury car, but the middle class also drives expensive models from German automakers. Owning a car dealership can therefore bring in considerable revenue.

10) Bike shops

Bikes are very popular in Spain, where the weather is good for biking most of the year. People use their bikes to commute to work or school, and they are also used recreationally. Owning a bike shop in Spain is ideal for someone who loves bikes, and someone who wants to make money out of their passion.

Why it can be profitable

Good bikes are expensive, and people are willing to pay for them. Furthermore, if you can provide your customers with specialized services (like repairs) the business will be profitable even without many sales.

11) Real estate and property rental

Starting a property business is a great business opportunity. Although the real estate market is not at its highest, you can still make a lot of money off this business provided that you have some capital and knowledge of what you do. There are many undeveloped pieces of land in Spain, so if you have some capital you can buy these pieces of land cheaply and develop them yourself. The process is can be complicated so whenever you are ready to buy contact a property lawyer who can guide you through the legal procedures.

Why is it profitable?

The best part about this business is that since it’s an industry where people are constantly buying and selling, there will always be demand for this kind of service. You can lease properties then renovate them and resell them for profit. You can also become partners with other real estate agency owners and lease properties for them, split the profit.

12) Agricultural business

If you have some land that you do not use, then this is a good business opportunity. You can plant any crop, or raise animals such as cattle and goats that will sell to the market at a later time. An agricultural business is great for retiring, living, and working abroad, as the land is usually cheaper and you don’t need to work all year round. Popular agricultural products from Spain are olive oil, wine, almonds, and oranges.

Why is it profitable?

An agricultural business in Spain might not seem like the most profitable business, but because demand for produce in Spain is high and it’s usually priced higher than its worth, you can still make a profit.

13) Financial services

Financial services in Spain usually include insurance, trading, currencies, and banking. You can set up a financial services business in Spain with some capital, but be aware that the market is very competitive by nature so it’s not easy to stand out from everyone else.

Why is it profitable?

Although most people just prefer to use banks for their finances, there is still a big market for those who prefer to do it themselves. That’s where financial services businesses come in, so if you have experience or knowledge about these types of business then this might be a good opportunity for you.

14) Healthcare services

Spain’s healthcare system is generally public, so the government tries to keep costs cheap for everyone. As a result, it’s difficult to set up a business whose main source of revenue is healthcare.

Why is it profitable?

If you’re capable of establishing connections with different private clinics and hospitals in Spain then you can start your own health care business without having to rely on the public system.

15) Transport and logistics industry.

Spain is a big country and there’s a lot of transportation going on every day. There are several markets for this type of business such as industry, business to consumer, and business to business. You can invest in vehicles or your own logistics company.

Why is it profitable?

Transport and logistics are always needed, as the demand for this type of service is never-ending. If you can afford your own logistics company and can keep the costs low, then you’re in for a good profit.

Business in Spain

Understanding the business culture in Spain

Before starting any business in Spain, it’s important to understand the unique cultural and economic landscape of this fascinating country. Doing business in Spain, for example, is very different from doing business in the United States. Characteristics of Business in Spain are generally more relaxed, and Spanish workers tend to expect a higher degree of independence. In the U.S., for example, it’s common practice for employees to punch a time clock before and after their shifts. In Spain, however, most people work from 9:00 am – 2:00 pm with an hour for lunch in between. Because of this, Spanish workers tend to stay later at the office than their American counterparts.

Business dress in Spain is also different from that of other countries. Most men wear business suits with ties, and women typically wear blazers over skirts or dresses. However, most people working in service-related careers, such as hotels and restaurants, do not dress formally.

Doing business in Spanish

Starting a business in Spain is similar to starting one anywhere else. You will need to do some market research, get licenses and permits, set up your office space, hire employees, etc. However, there are some important differences you should be aware of when starting a business in Spain:

Tax laws in Spain are very complex, and they can vary greatly depending on the size of your business. Researching tax law before starting your business is crucial to ensuring that you don’t end up spending too much or too little.

Office space and personnel are cheaper in Spain than in other western European countries, but the employees may expect a higher degree of independence since workers in Spain tend to be more relaxed.

Finally, the majority of people in Spain speak Spanish. That means that if you want to do business in Spanish then hiring employees who speak both English and Spanish will give you access to a wider market.

Also, remember that if you’re planning to hire employees then having a solid contract, payroll administration, and understanding of Spanish payroll laws is very important in Spain.

Companies in Spain

A word from SpainDesk

The most popular type of business in Spain are those that have to do with services. However, you can find good profits in several other industries as well, especially if you’re willing to deal with some unique challenges associated with doing business in Spain. If you are ready to start your business in Spain, then we can help you with the company formation process.

Already have an existing company? Then we can help you with any of your accounting, payroll, and/or bookkeeping needs! Feel free to contact us for more information. We also have a quick guide to starting a business in Spain that might be useful if you’re familiar with the process already.

Spain is a great place to start a small business, and the country has been ranked as one of the most entrepreneurial in Europe. There are many freelancers in Spain, and many small businesses are started every year in Spain.

What is an Autónomo?

An Autónomo in Spain is someone who works for themselves in Spain. In other words, an Autónomo is a sole proprietor in Spain. This means that they do not have a contract of employment. Instead, the Autónomo is their own boss and is responsible for setting their own hours and making their own profits. While an Autónomo does business independently, it is not the same as the Spanish limited liability company called SL. The main difference is that the Autónomo is responsible for their company’s debts.

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Self employed workers

What is needed to become an Autónomo?

Depending on your circumstances, you will need certain documents to become an Autónomo. Below we give an overview of the most common situations.

Spanish Citizens

As a Spanish citizen, you will need the following:

  • NIF number
  • Registration with the tax office
  • Registration with the social security office

E.U. Citizens

As an E.U. citizen, you will need the following.

  • NIE number
  • Registration with the tax office
  • Registration with the social security office

Non-EU Citizens

If you come from outside the EEA/Switzerland, you will need the following:

  • NIE number or TIE card
  • Registration with the tax office
  • Registration with the social security office

Registering as an Autonomo in Spain

How to register with the tax office as an Autónomo?

Every Autónomo must pay Autonomo tax, and they need to register with the Spanish tax office Agencia Tributaria. The tax office is also called the Hacienda and AEAT.

It is required to register the economic activity you will perform as an Autónomo. So that they can charge you with the Economic Activities Tax (Impuesto de Actividades Económicas IAE.

To get registered, one of the things you will need to do is fill in a Spanish tax form (Modelo 037 or Modelo 036). These forms are available at the tax office. You can also register at the tax office by going to the local tax office and requesting the forms.

Completing these Modelo’s will legally confirm that you will have to pay the tax that is required by your economic activity. There could also be other modelo’s involved with your Autonomo registration, e.g. when you are importing alcohol.

Autónomo’s pay tax through their personal income tax in Spain. The amount of tax you will have to pay, as an Autónomo, will depend on the amount of money you make. The personal income tax is a progressive tax, which means that the more money you make, the higher percentage of tax you will have to pay.

If you are not registered for personal income tax in Spain, you must fill in Modelo 030. This form will obligate you to pay personal income tax in Spain.

Annual income tax payments

When you are self-employed in Spain, you will have to do income tax returns. The amount of tax you have to pay as an Autónomo in Spain depends on whether you are considered a tax resident or tax non-resident.

Furthermore, tax rates in Spain differ depending on the province, so the fees vary across the country. According to income earned, residents of Spain are taxed at a rate ranging from 19 to 47 per cent.

The IRNR, or Impuesto Sobre la Renta de No Residentes in Spanish, is the income tax paid by non-residents for tax purposes.

From April until the end of June, all tax residents, including Autónomos, in Spain must file a tax return for the previous year. The tax return is known as the declaración de la renta.

VAT tax

When you’re an Autónomo, you must pay VAT tax in Spain, just like when you run a business. In Spain, the vat tax is known as IVA. The VAT rate is 21 per cent. The rates for certain goods or services are 10% and 4%. Even if freelancers provide services outside of Spain, the VAT applies to all their work.

Freelancers are required to submit a quarterly tax return and pay any outstanding amounts. The quarterly VAT return, known as Modelo 303, is used for this purpose. You must still submit it even if you have nothing to declare.

Tax returns for autonomo's

How does the social security contributions work?

As an Autónomo, you are obligated to pay for social security contributions. The contributions you pay as a self-employed in Spain will give you access to this system.

The social security system in Spain

The public system in Spain is excellent, and it is one of the most developed systems in Europe. The plan covers a wide range of costs, including illness, retirement, maternity, paternity, work accidents, and unemployment.

Cost of social security as an Autonomo in Spain

The minimum quota for 2021 has increased to 67 and 289 euros per month. At the same time, the maximum fee has reached 998 and 1,245 euros per month in 2021. The range comes from discounts in the first months of starting as an Autónomo.

The more you pay, the more you receive when you retire or if you fall ill. A person who is sick at work and pays the minimum amount would get 18 and 23 euros per day. If he paid the maximum contribution, he gets between 80 and 100 euros.

Autonomo social security payments

Social security payments for Autónomo’s are made on a monthly basis. The social security office will send you an invoice for the social security contributions you have to pay. You can also find this information online on the website of Social Security Treasury. If you work with an accountant in Spain, they will help you with the monthly payments.

How to register with the social security office?

To be eligible to enrol in the Autonomo social security system (RETA), you must have a social security number. If you don’t have your Social Security number in Spain, you are obligated to get one. As an Autónomo, you will have to sign up at the General Treasury of the Social Security. You must register at sede.seg-social as a person that is an owner of an Autónomo. Registration is done through the Special Regime for Self-Employed Workers. Next to this, the company must register at the social security office with the associated Economic Activity of the company, in order to affiliate itself with the registered person.

Social security is tax-deductible

Any RETA payments are tax-deductible. This means that you can deduct any social security payments you have to pay from your Autónomo tax. So if you make any money, you can easily nullify any social security payments.

tax returns for self employed

Frequently asked questions about freelancing in Spain

Below you can find some of the most Frequently Asked Questions when it comes to freelancing in Spain

Can I work for a Spanish company as a freelancer from another company?

Yes, you can. You can work for a Spanish company as a freelancer from another company. However, if you pass a threshold of income, you will have to pay taxes in Spain as well.

Do I need an accountant?

It is recommended that you have an accountant to help with your taxes and social security payments. However, it is not obligatory. Our team of accountants is ready to assist you if you choose. Learn more about our accountant services in Spain.

Do I need to pay social security if I receive no income?

Yes, you will have to pay social security, even if you receive no income. However, you can stop your Autonomo registration when you have no income. If this happens, you don’t have to keep paying your social security.

Can you help me with registering as an Autonomo?

Yes, we can help you with registering as an Autonomo. We have a full company formation service that can help you with everything from setting up your Autonomo to getting your social security and tax numbers.

Do I need a bank account?

While you don’t need a bank account, you will benefit from having one. It is recommended that you have a bank account to receive any money that might come your way. When you are using an accountant, a separate bank accountant is also recommended, as you will need to keep your accounts separated.

How strict is the agencia tributaria?

The Spanish tax authority is strict when it comes to paying your taxes. Make sure that you pay them on time and always keep receipts to prove any transactions.

When is it wise to create a limited liability company?

If you require any borrowing for your business, creating a limited liability company is wise. Also, around the threshold of 60.000 euros, the company is cheaper to operate than the self-employed company in Spain because of taxes.

The most common Spanish limited company is the Sociedad Limitada or S.L., the minimum shareholder requirement is 3.000 euros.

Setting up a limited liability company is more complex than Autónomo in Spain. It includes bylaws, different company registries, and a notary. When you have a limited liability company in Spain, you will also have more obligations.

We can take care of these for you, so you can run your business without any worries. Contact us for a quote on these services.

How to become an autónomo workers and be self-employed in Spain

Do I get a certificate when I become an Autónomo?

Yes, you will get a certificate from the government when you become an Autónomo. This certificate is proof that you are self-employed, and it is essential to keep it safe as you will need it when you file your taxes.

What are the benefits of being an Autónomo?

There are many reasons why you might be considering starting your own business in this country, but before we get into those, here’s some information about what it takes to start a company in Spain. A summed up list is as follows:

  • Being your own boss
  • Flexibility with your time
  • Work from home
  • Work for multiple companies at the same time
  • The social security system in Spain is very good

Can I also get private health insurance instead of the social security regime?

No, you cannot. If you are Autónomo in Spain, you will need to pay into the social security regime. You can still have private health insurance if you prefer this, but you will need to pay into the RETA of Spain.

Is the registration process difficult for Autonomo’s?

Company formation professionals often do the registration process for Autonomo’s in Spain because the process is complicated and tedious. The process includes filling several Spanish documents and an appointment for identification numbers and registrations at the social security and tax offices.

If you are unfamiliar with Spanish, it is faster, recommended, and easier to use a company formation service since they will ensure that all documents are filled correct.

What are the most common small business jobs in Spain?

Popular jobs that the self-employed in Spain have are marketing and communication, design, web development, writing and translation, personal assistant, business consultant. But you can also find bar owners, gastronomy owners, commercial agents and other professions.

Autonomo in Spain

A word from SpainDesk

We hope you enjoyed reading about the basics of being an Autónomo in Spain. Being self-employed or running a business is not easy to do alone. Our Autonomo registration services in Spain will help you get all of the paperwork and registrations done quickly and correctly so that you can focus on your business. We also offer other services such as property purchase guidance, personal tax advice/returns, and corporate law advice. With this, we hope to improve your stay in Spain. If you are interested in our services, don’t hesitate to get in touch with us, and one of our consultants will get back to you shortly.

Disclaimer: Information on this page may be incomplete or outdated. Under no circumstances should the information listed be considered professional legal advice. We highly recommend seeking guidance from a legal expert if you lack extensive knowledge or experience dealing with any of the procedures outlined in these articles.

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The VAT number in Spain is an essential part of doing successful business within the Spanish Market. The Spanish market is the 5th biggest market in the European Union, and this makes for great opportunities for foreigners to get in on the action. This article will talk about the different aspects of the VAT number in Spain, the number you will get when you form a company in Spain. Topics that we will discuss are VAT registration, the Spanish tax system, NIF number, VAT purposes, VAT return, and the purposes of the Spanish VAT.

What is a VAT identification number?

In business, the VAT identification number is a one-of-a-kind identifier for sole proprietors, partnerships, and limited liability companies. If the Tax and Customs Administration considers you an entrepreneur for VAT purposes, they will need you to have this number.

The VAT identification number is a taxpayer reference code, and all kinds of organisations and clients can ask for it. You also use your VAT ID number when interacting with consumers, such as on invoices and websites. In a nutshell, you communicate this to your company’s external communications.

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How is VAT registration done in Spain?

The Spanish Tax System assigns each business that is incorporated a NIF number (número de identificación fiscal). This will be your company’s identification number. When you are about to get started with your business in Spain, you must get your NIF number.

To get this number you must register with your (local) branch of the Administración de la Agencia Estatál de Administración Tributaria (AEAT). The Spanish Tax Administration will assign you a NIF number after checking that your business is registered, has an address, deeds of incorporation, bylaws, and a variety of other formalities. It is recommended a Spanish lawyer handles your incorporation so you are compliant with all necessary corporate laws. Don’t hesitate to contact us if you want us to help you with the company incorporation.

Spanish VAT number

What is the Format of the Spanish VAT number?

In Spain, the VAT identification number is known as “Número de Identificación Fiscal” (short form: NIF) and is required for EU commercial exchange. The Spanish VAT number was formerly known as the CIF number (Código de Identificación Fiscal). It is very common (and normalised) to refer to a business number in Spain as a CIF number.

Spanish VAT number is formatted as:

ES + Letter + 8 digits or ES + Letter + 7 digits + Letter

So what does it stand for:

  • ES = country code
  • Letter = type of entity (e.g. B for Sociedad Limitada)
  • First two digits: stand for province company was registered
  • Last five digits: random digits
  • Last character (digit or number): control character
  • Example: ESX12345678

When do you need a VAT number in Spain

In general, all firms and legal entities in Spain must be registered with the Spanish Commercial Registry and carry a Spanish VAT. The main reason for Spanish VAT registrations are:

  • If you store goods in Spain, you must have a Spanish VAT number. This is true even if you are not making any sales and therefore never charging customers or clients for services rendered.
  • If you are a foreign seller that imports more than 35.000 in sales, you must register for a Spanish VAT number.
  • If your company operates within Spain, you must register for a Spanish VAT number even if the turnover does not meet the level of the threshold mentioned.

Is one of these scenarios apply to you? Obtain a VAT ID through the request form on our company formation page, and we will take care of all your Spanish tax registration formalities.

Documents required by the tax authorities to get the VAT

Various papers are needed in order to register the VAT ID. It’s a good idea to get them all at once rather than waiting for them one by one. You will get your VAT number during the incorporation of your company. The general documents you will need for the VAT registration are:

  • The filled-in application form.
  • A copy of a valid ID/Passport
  • Proof of the deed of incorporation

If you would like the Spanish company to be under your home country’s holding company, you will need:

  • VAT certificate
  • Articles of Association and Bylaws
  • Certificate of incorporation

Because every company formation has different aspects, we suggest contacting a company formation agent to get your VAT number to handle all the documentation for your company incorporation.

VAT number Spain

Paying taxes using your VAT number

Like in any other country in the world, your company will have to do certain tax returns. The tax office in Spain is known as the Hacienda, AEAT, and Agencia Tributaria. The tax office will ask you to pay various taxes in Spain, including revenue tax (VAT return) and corporate income tax.

Filing VAT returns

Each quarter, you must file a revenue account for VAT purposes. For the first year, it is recommended that this happens based on three.

Your VAT in Spain is used to report your taxable income and revenue tax. Typically, your VAT return in Spain is due four times a year, quarterly and one time annually. It is also possible that you need to file monthly VAT returns.

The regular value-added tax rate (IVA in Spanish) in Spain is 21%. However, there are also other rates which are 10% (for basic items like food and medical products), and 4% (for even more basic items like bread and books).

Filling corporate income tax

Corporate income tax in Spain is 25%. The corporate income tax filings have to be done after six months ending the financial year, within 25 days. So usually between 1 July and 25 July of the following calendar year.

The tax also has two advance payments during the first six months of the company’s tax year and the second before the end of the year.

Where can you find a company’s VAT number in Spain?

In general, every company with a commercial establishment in Spain must display their VAT number on invoices, letters and commercial documents. In the case of online business, it is necessary to have a national VAT number that anyone can find on your website or invoice. Spain’s tax authorities are strict about companies not displaying their VAT number, so it is important to get your company registered for this purpose.

Verifying VAT numbers

If you can’t find a company’s VAT number, or you want to verify a company’s VAT number. You can look it up at the mercantile registry if it is registered. There are also other websites that index VAT numbers of Spanish companies, so there are various options.

VAT Number in Spain

Frequently asked questions

Below, you can find some frequently asked questions regarding the VAT number Spain.

Are NIF and VAT the same?

No, NIF and VAT are different. The NIF is the Spanish taxpayer’s identification number as established by law. Meanwhile, the VAT number is a commercial identifier that only companies need to have. The NIF is sometimes called NIF-VAT.

How do I get a Spanish VAT number?

To get a Spanish VAT number, you need to register as a company in Spain. Registering as a company includes getting all the necessary documentation and formalities for your business purpose, including obtaining a vat number. We will provide all the information regarding this process after we have received your request.

Do I need a VAT number when I have sales in Spain, but I am in another country?

When you have distance sales of over 35.000 euro, the Spanish government requires you to have a unique identifier. The sale of goods or services to Spanish customers is illegal in excess of this threshold.

Do people in Spain also have a VAT number?

Citizens and residents in Spain have a NIF number, which functions as a VAT number. Non-residents in Spain that need a tax identification number will get an NIE number.

Can I get an NIE Number or NIF number when I am abroad?

Yes, via The Hague Apostille, you can get a power of attorney signed in Spain. Your lawyer, who will be your Spanish representative, can then take care of your Spanish company formation and sign you up in the trade register.

Save time getting your Spanish VAT number

Get help from an expert and save time, money and headache. We offer a range of services from company formation to tax accounting. Fill in the form below, and we will get back to you right away.

Disclaimer: Information on this page may be incomplete or outdated. Under no circumstances should the information listed be considered professional legal advice. We highly recommend seeking guidance from a legal expert if you lack extensive knowledge or experience dealing with any of the procedures outlined in these articles.

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The NIF number and CIF number are often used interchangeably when speaking about tax identification numbers for businesses. It can be quiet confusing when you are forming a company in Spain. In this article we discuss why this is the case, and what the codes really stand for.

The CIF number was replaced by the NIF number in 2008

In 2008, the NIF number replaced the CIF number as the Spanish tax ID for businesses. Before 2008, the NIF number was only used for residents. Currently, both businesses and individuals use the NIF number as their tax id number. Below is more information about the differences.

What is the CIF number?

The CIF number stands for Código de Identificación Fiscal. This was the tax ID for all Spanish businesses up until 2008, with the entry into force of the Royal Decree 1065/2007, 27th of July (in Spanish, the Real Decreto 1065/2007). The CIF number was a tax code that all companies needed to have. The code helped keep records of their business and their employees in order to report and pay taxes and social security contributions within the appropriate time frame. It was then replaced by the NIF number, also known as Número de Identificación Fiscal. Currently, you will need a NIF number to start a business, and it serves the same function as the CIF used to do, only now the name has changed.

The CIF number is still mentioned very commonly in Spain for identifying business numbers. When you are searching for a business number, it makes sense to search for a CIF, because then it is clear you are looking for a business right away, and plenty of sites still have the CIF number instead of the NIF one. Google also indicates that two to three times more searches are done on CIF numbers (red) compared to NIF (blue).

Many business websites still refer to business tax numbers as the CIF number. For example, if you want to find SpainDesk’s CIF number you can see that other websites also refer to our tax number as the CIF number. As we have mentioned, it is not weird to use the CIF number to still refer to businesses. Old habits are sometimes hard to change.

NIF and CIF number

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What is the NIF Number?

The NIF number stands for Número de Identificación Fiscal. Translated to English, it means it is a Spanish tax identification number. It is a unique identification number that facilitates the payment of taxes and regulatory compliance. It is a key identifier for the Agencia Tributaria.

There is no separate number VAT number in Spain. So, if you are dealing with a business, you can also find this number on the invoices.

When do you need the NIF number?

If you are participating in any economic activity in Spain, you will need to get a NIF number. The NIF number is used for both people and businesses that need to pay taxes in Spain. So when you are starting a business in Spain, you need to get a NIF. Below we discuss the tax identification numbers related to Spanish citizens, ex-pats, self-employed, and businesses.

Spanish citizen: You will have your own personal NIF number when you are a Spanish citizen. This number is necessary for many formalities, such as opening bank accounts and signing contracts. This number will also be required when paying taxes or applying for a job.

Expats in Spain: When you are an international in Spain, you need a NIE number. This number is necessary for many purposes such as starting a business, opening a bank account, signing contracts, and working in Spain.

Autónomo in Spain: Self-employed people in Spain are called Autónomo. Because self-employed are not separate entities from the owner, the owner will pay Autonomo tax on their personal income tax. Therefore the owner’s NIF number or NIE number is used also as a VAT number for the Autonomo registration.

Businesses in Spain: When a Spanish limited liability company is set up, it needs to get a NIF number for itself (also called a CIF number). While the owners need a Spanish tax identification number to set up the company, the company will get its own VAT number. Foreign companies also need this number to open a branch in Spain.

CIF and NIF Tax ID number in Spain

What do the numbers of the NIF number mean?

The NIF comprises nine characters: a letter followed by seven numbers, followed by a character that is either a letter or a number. The first letter in the code designates the sort of company or institution. Find below the meaning of each letter:

A. Public limited liability companies
B. Limited liability companies
C. Affiliate
D. Commendatory companies 
E. Communities of property
F. Cooperative companies
G. Associations
H. Communities of owners
J. Civil societies
P. Local companies
Q. Public institutions
R. Religious Congregations and Institutions
S. Bodies of the State Administration and the Autonomous Communities
U. Temporary Joint Ventures
V. Other types that are not defined in the other keys
N. Foreign entities
W. Permanent establishments of entities non-resident in Spain.

The two numbers following the first letter identify the province in Spain where the company was originally created. With this, you can learn a lot about the entity by knowing the NIF number.

Find a NIF number in the company registry

If you are looking for a company or business name, you can check that it is not already used by searching the companies registry in Spain.

The company registry is a database of all officially registered companies and other business entities in Spain. The information about each entity’s legal status, place of registration, owners and managers is available to the public.

Important takeaways on the CIF and NIF number

The NIF number is the tax identification number that facilitates the payment of taxes and regulatory compliance. As you can see, the NIF, priorly known as CIF, is vital in getting a business started in Spain, since every time you are dealing with tax, accounting, invoices, the Tax Office or any Spanish institutions, this is what will identify your business.

At SpainDesk, we can help you in the process of applying for a NIF number and everything that comes with forming a company in Spain. Don’t hesitate to contact us at contact@spaindesk.com if that is the case or you want any more information on the matter.

Disclaimer: Information on this page may be incomplete or outdated. Under no circumstances should the information listed be considered professional legal advice. We highly recommend seeking guidance from a legal expert if you lack extensive knowledge or experience dealing with any of the procedures outlined in these articles.

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When you want to start a limited company in Spain, knowing the meaning will make you feel more prepared to take on business in Spain. We have compiled a list of 9 must-knows for when you want to start a limited liability company in Spain:

It takes time to incorporate a limited liability company in Spain

Foreigners often underestimate the amount of time it can take to start a limited liability company. There are many steps involved in setting up a limited liability company in Spain, and before you make the first sale, these must be correctly done.

SpainDesk makes your company formation easy, fast, and worry-free

Spanish business administration is often more complicated than in other countries, and this is due to its history as a relatively new democracy. While this is a negative of starting a company in Spain, it also brings opportunities as the Spanish economy is still growing and giving way for your new company to grow.

Tasks when setting up the limited liability company

For example, you have to register your company name at the mercantile registry, establish a registered office, apply for a NIF with the tax authorities, sign up for your Social Security payments, get the deed of incorporation, and recruit your employees.

We recommend allowing at least one to two months before you open the doors of your business. Especially when incorporating from abroad, consult with a lawyer to see what the exact process will be for your company.

The minimum share capital for a limited company is €3.000

To start an SL company in Spain, you must have a minimum share capital of 3.000 euros, but most companies would be better off with a minimum of 6.000 euros to 12.000 euros to run it properly and hire the proper personnel.

Depositing your minimum share capital

It is recommended that the starting capital of shareholders be deposited in a Spanish bank account. While technically, the money does not have to be deposited with a Spanish bank. It must be available for drawing any time by the shareholders or managers at their request.

Banks have unique products and services for companies, and some of them also have payment portals that are translated into a variety of languages. Dealing with banks in Spain can still be a challenge since Spanish people tend not to speak many foreign languages.

Limited company in Spain

Incorporate your company in Spain with the help of a lawyer

A specialised lawyer does the incorporation of companies in Spain typically. It is best to go with a law firm specialising in business rather than one that deals with civil and criminal cases, which could be the case if your lawyer only works for individuals. Some specialists also work through the internet and can provide you with all of the required legal documents via email.

Tasks a lawyer can handle

When you have given a lawyer the power to handle your company incorporation, they will cover the documentation and registration process.

Tasks the lawyer can handle related to the incorporation are, for example

  • Tips on choosing the type of company
  • Getting your Spanish personal tax identification number
  • Dealings with notary
  • Registering you at the mercantile registry
  • Registering you at the social security office
  • Getting your business tax identification number
  • Setting up a bank account
  • Registering you at the tax office

Additionally, the lawyer can manage business contracts and employment contracts tailored to your needs.

You need to present the company’s Spanish Articles of Association and Bylaws

The Spanish company’s Articles of Association and Bylaws must include a set of required provisions. The basic ones are the name of the limited liability company, its registered office, and shareholders. It also contains several chapters, dealing with various aspects of the corporate structure and management.

These include chapters about the rights and obligations of the company’s founders and directors. Both the Bylaws and the Articles of the Association are an essential part of your incorporation. It will explain the relationship between the partners involved in the company and their duties and rights.

Get a Spanish lawyer to write your Articles of Association and Bylaws

It is best to have a lawyer create the Articles of Association for your company. This way, you can be sure that everything is done according to Spanish law.

The lawyer can also advise you on any potential pitfalls you want to avoid when drafting your company’s Articles of Association. When written by a Spanish lawyer, they include all the needed provisions and will be prepared correctly in compliance with current company laws.

Companies must keep detailed accounting records

Every business in Spain must maintain a set of accounting records, which the business must keep records for a minimum period determined by the Spanish tax authorities. These should include a register of all your transactions and receipts from day to day, plus any legal or financial documents of the company. All businesses must keep these documents for five years. The tax office may request them during an investigation carried out by the tax office.

The Spanish public administration demands this information to prevent tax avoidance and fiscal fraud, among other things. Furthermore, annual statements need to be kept very well organised to fill in the tax return forms.

Get a Spanish accountant to take care of your tax obligations

Startups often overlook accounting records. We recommend hiring a Spanish accountant at the start. For medium and large companies settling in Spain, accountants are also essential to running the business smoothly. They will assist with paying out payroll, dividends, and avoiding tax penalties.

Hiring a Spanish accountant will free up your time and allow you to focus on what is essential: making decisions about the future of your Spanish business. In addition, accountants can keep track of all financial statements and keep invoices for you.

It’s also feasible to expand the services they provide tailored to the company’s growth. We offer services ranging from tax declarations, bookkeeping, cash flow forecasts, and payroll administration. This way you can scale your business with us accordingly.

sociedad limitada nueva empresa

The most popular limited liability company in Spain is the Sociedad Limitada (SL)

While there are other types of business structures and limited companies in Spain, The Sociedad Limitada (SL)is the most popular of them all. This is because it is easier to set up, but it does everything you would expect from a limited company to protect you from your business’s debts.

The minimum share capital of SL and SA

There is also another limited company in Spain that is popular. This is the Sociedad Anónima (SA). There are a couple of differences between the SL limited liability company and the SA limited liability company. For example, the SA has a minimum shareholder capital of 60.000€, compared to the SL’s 3.000€.

The corporate income tax rate in Spain is 25%, but newly created companies pay 15%

The Spanish corporate income tax (CIT) rate is 25%. Depending on the type of firm taxed and the kind of business it conducts, other tax rates may be levied.

You might need to pay only 15% corporate income tax for the first two years you are in business. After the first two years, this is increased to 25%.

Dates of filing your limited liability tax

The limited liability company must file quarterly and yearly corporate income tax declarations. These have to be submitted on the 15th day of the month following the quarter or yearly period that is being declared.

The yearly corporate income tax must be filed within the first 25 days of the six months following the year-end. Companies that operate on a calendar year basis (99%) must submit their tax between the first and 15th July in the following year. You must make the quarterly corporate income tax payments during the year, and they are due on the 20th of April, October, and December of the same year.

Every business in Spain also needs to declare its VAT (IVA). The general VAT in Spain is 21%. This also has to be declared on a quarterly and yearly basis.

Understanding how your business will be taxed in Spain can seem confusing, but it does not need to be an obstacle. Hiring a Spanish accountant from day one will allow you to avoid any unforeseen taxation issues and may

Limited liability company spain

Spain can offer you cheap labour, but employment issues can arise quickly

Spain has some of the best talents in Europe. You can find highly skilled workers that speak English, French, Italian, and German. There is also unlimited access to clientele, with the largest consumer market in southern Europe.

However, you need to consider ‘how’ you hire new staff since the employment laws are more complex than in most other countries. When you are a starting, it is best to keep labour costs as low as possible, so you need to be extra careful about how you hire your first employees.

Your company must provide work contracts for all its employees that comply with Spanish labour law. You can hire a lawyer if you have any questions about employment laws in Spain.

Employment must-know in Spain

When you hire your first staff members in Spain, your company must adhere to employment laws. Some essential aspects of employment in Spain are:

  • Both maternity and paternity leave is 16 weeks.
  • There is a strong focus on social security contributions and social security benefits.
  • Safety and health representatives should be in place at all businesses with more than five employees.

We suggest reading our article on employment law in Spain and contacting a labour lawyer if you have questions about hiring your first employees.

You can hire a Spanish lawyer from the outset, so there are no unexpected difficulties when starting your limited liability company in Spain. Hiring a lawyer will allow you to avoid any possible legal problems and is well worth the investment for peace of mind.

Limited Company Spain

Business in Spain is booming

Since the European market has been united, the business has been growing in Spain, and it is currently (2021) the fourth biggest economy in the European Union.

While many large multinational companies are starting their limited European company in Spain due to Spain’s cheaper labour and attraction, small and medium-sized companies are also becoming more and more common.

It seems the Spanish market will continue to grow as more companies from other European countries find their way to Spain, and the government seems to encourage investment in the country’s business market.

Common sectors where limited companies are present

Companies in Spain are working in many different business areas. Some of the more common ones are:

  • Tourism and restaurants
  • Real estate
  • Finance
  • Agriculture, farming, hunting, fishing, forestry
  • Services (including technology, finance, and consulting)
  • Retail

There are also many other sectors where Spanish companies are working. If you have a business idea that can be developed in Spain, take into account the growing Spanish market. You could be part of the economy’s monetary growth, and there are a lot of opportunities to build a successful business.

Concluding the must-knows for setting up a limited company Spain

The limited company in Spain has some necessary legal requirements. Suppose you want to start a Spanish Limited company (Sociedad Limitada) or an SA (Sociedad Anónima). In that case, you need to carefully check the legal requirements and be aware of the consequences when not complying with them.

We recommend contacting a certified Spanish lawyer to help you with the limited liability company formation in Spain. Next to this, an accountant in Spain can help you with the tax requirements the company will have. We would be happy to provide you with these services and support you with the success of your business in Spain.

Disclaimer: Information on this page may be incomplete or outdated. Under no circumstances should the information listed be considered professional legal advice. We highly recommend seeking guidance from a legal expert if you lack extensive knowledge or experience dealing with any of the procedures outlined in these articles.

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Every person that is self-employed in Spain is required to pay autónomo tax in Spain. The autónomo tax consists of three parts. The income tax, the vat tax, and social security contributions.

Both income tax and vat tax are paid with a quarterly and annual tax return. Social security contributions are paid monthly. In this article, you will learn about the autónomo tax obligation, autónomo returns, and deductibles.

Every autónomo in Spain is responsible for preparing his/her annual income tax return. It is very common to transfer your annual tax return preparation to an accountant, this way you don’t have to worry about the deadlines and calculation of your autónomo tax in Spain. However, if you decide to prepare your autónomo return, it is important that you know and stays up-to-date with taxes in Spain that apply to you.

Autónomo income tax Spain

When you are a freelancer or self-employed in Spain, your income is taxed at the same rate as other individuals in Spain. The rules of the personal income tax, also apply to you when you are self-employed in Spain. The Agencia Tributaria doesn’t have a different income tax rate for freelancers.

In Spain, there is a resident tax and a non-resident tax. You are a tax resident if you spend more than 183 days in Spain during a year. You are a non-resident for tax purposes if you spend less than 183 days in Spain during a year.

The income tax Spanish tax residents are paying is called the IRPF, it stands for Impuesto Sobre la Renta de las Personas Físicas. In Spain, freelancers are subject to a progressive tax rate. As a result, rates vary depending on how much money is earned.

Remember that different regions of Spain charge taxes at varying rates, so the rates differ across the country. For tax residents, income tax in Spain varies between 19 to 47%, according to income earned.

The income tax Spanish non-residents for tax purposes are paying is called the IRNR, it stands for Impuesto Sobre la Renta de no Residentes.

The amount of tax you have to pay as an autónomo in Spain depends on whether you are considered a tax resident or tax non-resident.

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Modelo 130: Quarterly income tax returns

Every quarter, you must submit this form to the Hacienda to declare your gross income and deductible expenses. If positive, small business owners must make a payment on account of their ultimate tax obligation.

Modelo 100: Annual income tax return ‘Renta’

The payments on account taken every three months will be used in calculating the final tax bill on this return. It is due by the 30th of June. Even if you are not required to complete an annual return, it can be useful to do so because then you know your income and expense figures for the full year.

When you have overpaid on your quarterly returns, you can claim a refund by completing this form. When there are additional taxes to be paid, the form is used to declare it.

The tax year in Spain comes to an end on December 31, and all autónomos must submit their Spanish and international earnings by June 30.

VAT taxes in Spain

Autónomo VAT Tax Returns

Just like limited companies when you are an autónomo you also need to pay vat tax. The VAT tax rate in Spain is a fixed tax that you need to pay over the revenue you generate throughout the year. The vat tax is called IVA in Spain.

In Spain, the general VAT rate is 21%. Depending on the type of goods or services, the lower rates are 10%, or 4%, respectively. The VAT applies to all services rendered by freelancers, even if they are performed outside of Spain.

Goods and services that have a lower tax are items such as educational services, artistic endeavours, and some forms of independent writing.

VAT within the European Union

If you engage with business clients outside of Spain but within the EU, you may be eligible for VAT exemption. This is because they pay the VAT at their own country’s rate, not at yours.

If you plan on doing this, you’ll need to register with the Agencia Tributaria to get a tax identification number and submit quarterly reports regarding your intra-community business.

Modelo 303 and 390: Quarterly and Annual VAT returns

Autónomos must submit a quarterly report and pay any outstanding amounts. The quarterly VAT return called Modelo 303 is used for this. When you don’t have anything to declare, you still have to submit it.

It can be carried forward if the quarterly return results in a negative balance. Any refunds that you may receive can be applied to your account at the end of the year.

Autonomo tax in Spain

Social security contributions and benefits for self-employed workers in Spain

If you work as a self-employed individual (Autónomo), you are obligated to pay social security contributions. After you’ve paid into the scheme for 15 years, your contributions will be matched by the government, and you’ll receive a pension as well.

At the same time you register to pay income taxes and VAT, you must also register for social security. To receive your autonomous classification, you must complete a new form indicating your status. This is because several types of employment result in different social security payments, so if your work is considered hazardous, you will have to pay more in contributions. The Spanish Social Security system is comparable to the National Insurance program in the United Kingdom.

Even if you don’t earn anything, you must make payments to avoid being fined 10% of your bill. You will not be eligible to use public health facilities, get a pension or sick pay, or take paid parental leave if you do not make the required payments. Self-employed individuals who take maternity or paternity leave are not required to pay into Social Security, as they are not considered employees. They will however need to have at least 12 monthly payments.

Social security rates for freelancers

In 2021, the starting amount in Spain ranges from €944.40 to €4,070.10. This number is then multiplied by 30.6 per cent, resulting in a monthly payment of at least €288.98 (Autonomous- Employee Contribution). In other words, in 2021 the minimum contribution is 289 euros per month.

The more you pay into the scheme the more you will get. In other words, the amount of social security contributions paid is a factor in determining how much social security benefits are received.

The amount you pay in social security payments each month is calculated using the base salary amount and the multiplier to arrive at it. Social security payments are on a progressive scale, the more you earn, the more you will pay out over time.

Registering for freelancer tax in Spain

To become a freelancer in Spain, you must complete both phases of the procedure. The first step is to register with the tax agency (Agencia Tributaria or Hacienda). To do this, you must fill out Form 030, which is available from the government website.

You’ll need a Spanish national insurance number (An NIE) and a Spanish bank account for the autonomous registration. If you’re not from Europe, you’ll need a work visa or residency permit. You can have an immigration lawyer in Spain help you with this.

Then you must join the autonomous social security system (Regimen Especial de Trabajadores Autonomos or RETA). To enrol in the autonomous social security system (RETA), you must already be a member of the social security system.

You must be a resident of Spain to register for the Agencia Tributaria, so you must complete the Modelo 36 or Modelo 37 forms and submit them to the Hacienda.

The form requires you to state your name, address, and type of business activity. You must indicate where your firm is located and whether you will pay VAT in Spain.

You may want to hire a professional to assist you in becoming an Autónomo or with starting your business. We provide specialized company formation services in Spain, so make sure to get a free quote.

Autonomo in Spain

Costs that are deductible on Spanish Income Tax

Any expense that may be deducted is limited to your economic activity as a freelancer. This implies that you cannot deduct anything from your income taxes that may not be used to generate extra money through your day-to-day activities.

The most important aspect is to properly explain them. If you do not provide sufficient documentation, it will be much more difficult to argue their validity in the future.

You can still use goods and items for personal or family expenses, but they must be marked as such. In this case, these costs should not be deducted from your income tax liabilities.

Freelance tax deductions often apply to business expenses. However, other costs can be deducted from your income if they meet certain guidelines outlined by law.

Utility and supply expenses

If you work as a freelance from home, you may deduct 30% of your utility or supply expenses related to your business. These costs can be deducted from income, but you must be able to prove that these are related to your business.

The costs associated with the work’s location are deductible in the proportion of the m2 impacted and the percentage of ownership.


The expenses of food for the company are deductible for income tax purposes if they are charged to a credit card and paid in a restaurant and catering business. This is the most crucial distinction because if a payment is made in cash, it will not be accepted. In Spain €26,67 per day is deductable, abroad that is €48,08.

Health insurance

The costs of health insurance premiums paid by taxpayers and their spouses or partners, as well as children under the age of 25 who live with them, are deductible to the extent they comply with these limits:

  • € 500 for each individual
  • € 1,500 in the case of disability

Expenses you can deduct entirely

Below you can find some key expenses that can be deducted in full from your income for tax purposes:

  • Your monthly social security payment.
  • Purchases of inventory or stocks made as a result of your company’s activities
  • Supplies (such as pens, toner, and ink cartridges)
  • Costs coming from advisor agencies (accountants, experts, tax advisors, or lawyers).
  • Mail charges
  • Bank charges for business accounts.
  • ICT services (server, website, etc.)
  • Costs for business travelling
  • Any marketing or advertising expense
  • Any expenses associated with retaining personnel, such as wages or educational costs
  • You can also deduct the franchise fee if you have established a franchise.
  • Expenses related to your office (for example rent)

There are more expenses related to your company you can deduct, but it is good to keep in mind that the expenses must be related to your business. You can best check with a tax advisor to see if your expense is deductible from your Autónomo tax in Spain.

It is important to keep the invoices of the expenses, as well as their date and location. You can then adjust these expenses when filing your annual income tax return.

Deductibles on VAT as an autónomo in Spain

The VAT quotas paid in the course of an economic operation are only deductible for supplies, services, or imports that are directly affected by the business activity and justifiable by invoice.

If something is only partially intended for your business, you can deduct a percentage of the VAT. This percentage is determined by your invoice and its related activity.

For example, in case the company buys a car. The company’s VAT obligations are based on the vehicle’s total mileage. If a car is used in your business, you can deduct any repairs, gasoline, tolls/fees, or parking charges at the same rate as your firm’s activities.

These quotas are deductible from VAT on income obtained during the same taxable period. It must be under the name and number of the taxpayer’s registry, as well as having an invoice of payment.

Freelancer tax in Spain

Frequently asked questions

Below you can find some of the most frequently asked questions about deductibles as an autónomo in Spain:

What invoices should I keep?

You must keep any invoice or receipt you receive from your supplier for any purchase. Any expense, such as gas or food, requires a receipt to be deductible.

How long do I have to keep my invoices?

It is required by the Tax Administration’s standards to maintain all invoices and documentation for at least four years. This is the tax statute of limitations, which allows the Treasury to undertake an audit and examine the employer or self-employed individual’s tax records for 4 years after declaration.

What expenses can I deduct?

Taxpayers may only deduct the business expenses they need to carry out their activity, which is exclusively related to it. Expenses that do not benefit your business cannot be deducted.

What is the difference between a Spanish autónomo and a company?

First of all, it is important to understand that there are two different kinds of Spanish companies: the limited liability company (S.L.) and the corporation (S.A.). It may be necessary to consult with a tax advisor in terms of which type of company will best suit your business structure.

Do I need an accountant as an Autonomo?

Yes, it is recommended that you keep your records and use an accountant in Spain to prepare your annual income tax return. It will be more secure and save you time and headaches.

Concluding the autónomo tax Spain

In this article, we have discussed the different taxes, deductions, and documentation in filing your taxes as an autónomo in Spain.

Keep in mind that the deductions must be related to your business, and not for personal use and that you keep your invoices saved securely.

Contact us if you would like help with filing your taxes. Our tax specialists can function as your tax advisor, accountant, bookkeeper, or simply help you file taxes online. We will create a quote tailored to your needs.

Disclaimer: Information on this page may be incomplete or outdated. Under no circumstances should the information listed be considered professional legal advice. We highly recommend seeking guidance from a legal expert if you lack extensive knowledge or experience dealing with any of the procedures outlined in these articles.

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The UK’s exit from the EU became an eye-opener for businesses, public administrations, and citizens when they understood the various trade barriers this exit would bring to their doorsteps. If you consider starting a business as a UK citizen in Spain, you should be careful with the new rules and regulations you will run into as a non-EU citizen. It is therefore recommended to hire a lawyer that can assist you with the new obstacles in tax, trading, and starting a company formation. This article is intended to provide information about the changes for UK individuals who want to start a company in Spain.

Can I start a business in Spain after Brexit?

You can still start a business in Spain since you don’t need to be a resident to start a business in Spain. If you want to incorporate a new company, our bilingual corporate lawyers can help you with everything. You can read more about our services on our company formation page. Next to this, we have another article that explains the complete process of starting a business in Spain.

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What new requirements and taxes are after Brexit in Spain?

At the end of December 2020, new tariffs, duties and compliance’s for UK citizens were implemented. It is important to meet all the necessary standards of imported or exported goods and conform to international legal and trade obligations. Just like the UK, these new policies will help prevent illicit activities and smuggling of products, including foods, disease control, and safety products for Spain and the EU

Moreover, the customs would give an affirmation that will aid the governments in collecting information about the specific products after importing or before exporting every product. The customs declaration will have information on the type of goods, value, shipment method, tariffs or duties paid. Likewise, different checks and licenses might be required and applicable for importing goods, such as plants, animals, animal origin products, agro-food products, pharmaceuticals, chemicals, alcohol, tobacco, etc. You can find more about these policies here.

Companies should also make a point to check the personal data shared between UK and EU businesses and make sure they comply with the General Data Protection Regulation.

Another one is that if you sell digital goods online to Spanish customers, they should be recorded either in the Spanish VAT system or an EU VAT MOSS system.

Our corporate lawyer is ready to assist you with the forms and regulations you will have to go through. Just contact us, and we will be happy to help you with your situation.

Popular companies you can register in Spain

Depending on the type of company and activities you want to start in Spain. Foreign investors must register either the limited liability company which is privately held called the SL (Sociedad Limitada) or the public limited company called the SA (Sociedad Anónima). There are many differences between the S.L. and S.A. For example, the SL limited liability company requires an investment of 3.000 euros and can have 1 to 50 partners, the Sociedad Anónima a minimum of 60.102 euros and can have an unlimited amount of partners. Both have different aspects that make them interesting for individuals and organisations.

At SpainDesk, we can provide financial and legal assistance and support you through the company incorporation process, as well as the bookkeeping and accounting. Contact one of our lawyers to get a free quote.

Living in Spain after Brexit

If you want to start a business in Spain, and want to live in Spain, then you need to apply for a visa. When you are starting a business, most likely this will be applying for a Business Visa or Self Employed Work Visa. We suggest contacting us for consultation with our immigration lawyer. Additionally, if you are willing to invest about 500.000€ in the Spanish economy, including real estate or qualified financial investments, you can apply for a Golden Visa in Spain. Having a work permit makes it eligible for you and your family members to reside in Spain as well. You can also use in the Beckham law to live in Spain but as a non-resident.

Living in Spain with the Beckham Law

Individuals that will be working in Spain can also apply to the Beckham rule if they are qualified. It licenses you to live in Spain but as a non-resident. This option comes with a unique tax regime at a fixed rate of 24 per cent of your Spanish employment income, unlike the progressive tax rates applicable to Spanish residents. We can help you with your application for the Beckham rule, take care of your tax declarations, and provide you with practical advice.

Living in Spain for ex-pats that arrived before Brexit

British ex-pats that were already living in Spain before the Brexit can register as a resident in Spain at the Immigration Office (Foreigners Office). As a resident, you will be able to get health care, a driver’s license and enjoy other resident perks. If you would like assistance with this, our lawyers can help.

Living in Spain ex-pats that arrived after Brexit

British ex-pats that want to move after Brexit to Spain will need to meet the normal Spanish immigration requirements for countries outside of the Schengen territory. This also means that UK Nationals that want to visit Spain are subjected to the following rule: you can stay 90 days in any 180-day period within the Schengen area. Just like the Spanish immigration requirements, this rule applies to countries outside the EU If you would like to know more about living in Spain for UK nationals, we would suggest looking at the official information from the UK government.

Disclaimer: Information on this page may be incomplete or outdated. Under no circumstances should the information listed be considered professional legal advice. We highly recommend seeking guidance from a legal expert if you lack extensive knowledge or experience dealing with any of the procedures outlined in these articles.

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The SL Company in Spain is the most chosen limited liability company for the Spanish market. The reasons why are pretty understandable since this legal entity provides many advantages. In this article, you will find the basic information about the structure, benefits and restrictions, registration and tax obligations that come with this business form in Spain.

What is the Spanish SL?

SL stands for Sociedad Limitada. It is a legal form of business in Spain and provides entrepreneurs with a simple and easy-to-start company structure. It is similar to the US limited liability company (LLC) and the German GmbH, but it has some additional requirements to its structure.

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The main purpose of this business form is to provide limited liability protection to its owners (shareholders) since they are not personally liable for the company’s debts or obligations.

Spanish SL company

What are the main characteristics of SL Company?

The most significant features of the SL are the following:

  • It is the leading limited liability company for start-ups and medium-sized companies.
  • Its minimum founding capital is 3,000 Euros.
  • The maximum number of shareholders is 50.
  • The capital of an SL company is divided into shares.
  • The minimum requirement for the founding members is one person, which can be natural or legal.
  • The shareholders can freely trade the shares of the company.
  • It is possible to create an SL company through a sole shareholder.
  • The company’s articles define the decision-making and shareholder percentages.
  • An SL Company has its fiscal domicile in Spain.
  • An SL Company is subject to Spanish Corporate income tax of 25%.
  • The legal form requires a separate VAT (IVA) number registration.
  • The General Meeting of Partners, the administrators, and member rights are components of a Limited Company.
  • The Spanish Mercantile Registry holds the company registration (Registro Mercantil).

SL Spain

The benefits of the SL limited company in Spain

The main reason why the SL Company Spain is so popular for many entrepreneurs and investors. Because it offers many benefits that other business models do not provide. The main benefits are:

  • Low share capital required.
  • Limited liability for directors.
  • Not personally responsible for any debts.
  • No social security necessary for owners.
  • International recognized corporate form.
  • The sole director and administrator can run it.

The disadvantages of an SL limited liability company in

There are a few disadvantages with going for the SL Company in Spain. Some of the disadvantages are:

  • For the final documentation, a public notary in Spain is required.
  • A registered office in Spain is necessary.
  • A share capital of 3.000 euros is required.
  • In some cases, fiscal monthly tax return.
  • Must adhere to corporate governance requirements.
  • Shares can not be traded or capitalized on the open market.
  • For shareholders who do not work for the company, no dividends are permitted.
  • SL Company can not have more than 99 shareholders.

Initial Investment SL spain

The initial investment of shareholders

The initial shareholder investment is a minimum of 3.000 euros. The cash capital is paid to the companies bank account when the company is registered. After incorporation, the directors/management of the company can use the money to invest in the companies activities.

Corporation tax for SL companies

The main corporate taxes involved with the SL entity are corporate income tax and VAT (IVA). The corporate income tax applied to this business form is 25%, while the VAT (IVA) applies to all of the company’s transactions.

There are also other taxes involved related to your business activity. For example, you will need different fillings for real estate, vehicle ownership, employees, import-export, construction, transport, tourism.

SL in Spain

The risk associated with this type of limited company

Loss of initial investment: The shareholder of limited liability will lose his initial investment/capital contributed to the company.

Loss of limited liability: By not keeping separate bank accounts, following the Spanish law, and keeping accurate records, companies may fail to properly keep a gap between the company’s business assets and the members’ personal belongings. Consequently, in the course of litigation, a court might find grounds to pierce the veil and target personal belongings.

Time waste on tax declarations: The corporate tax regime and form filing obligations involved need to be done. If you need to do this yourself, you might waste a lot of time figuring out the proper processes.

Disputes between shareholders: Because this Spanish limited liability company often has multiple managers, the members may come into conflict. While these disputes can be healthy for the business and help the business grow, some arguments might be more severe and irreconcilable. It is good to have the bylaws checked by a corporate lawyer, so everybody knows their responsibility before signing it at the public notary.

Questions around the Spanish SL

Frequently asked questions

Below you can find some frequently asked questions about the SL Company in Spain. To provide you with an even deeper understanding of the SL limited liability company.

How to form the SL limited company?

If you want to form an SL, we offer company formation services in Spain. As soon as we create the company, we can provide you with fully-managed accountancy and administrative assistance.

How long does the company formation of an SL Company take?

The registration process for an SL Company can take up to 90 days. However, all necessary documents need to be submitted correctly to make this timeline. The Registry Office may impose an additional term if required papers are missing or incomplete. However, three months is often the registration time for foreigners.

What is the minimum required share capital for an SL Company?

There is no minimum capital requirement. However, it must be at least 3,000 Euro. It can be more than that amount or even less if preferred by

What are the differences between the Sociedad Anónima entity and the Autonomo entity?

The Sociedad Anónima is a limited liability entity, while the Autonomo is not. Furthermore, Autonomo can only be sole traders (freelancers), while the SA company can have multiple shareholders.

What do I need to hire someone in Spain?

When you want to put someone on payroll in Spain. You will have to register with the social security office, and request a social security ID for each employee you hire. When you hire someone, withholding of payroll taxes and social security contributions are necessary. Contact us for more information on our payroll services in Spain.

Can I use the Spanish SL business structure as a self-employed person?

Yes, there are no restrictions for individuals to use the SL Company as a business entity. Because you can operate as both director and administrator, you may have a single owner.

What are the differences between a Sociedad Anónima and the Sociedad Limitada?

The Sociedad Anónima is a limited liability company that follows similar rules as those for a Sociedad Limitada Company. Large public companies will use the Sociedad Anónima because they have numerous shareholders and partners.

  • Minimum Share capital: The minimum capital required is 30,000 Euros for an Anónima, while 3,000 euros for an SL Company.
  • Shareholder limit. There is no limit on the number of shareholders for an SL Company, while it is 50.
  • Registration process. The registration process takes longer than it does with the SL company.
  • Fiscal returns. The fiscal returns are more complex for a SA company.
  • Headquarter: as its place of business in Spain while the SL Company does not have to do so.

In general, starting with an SL Company is recommended, and you can always change to a Sociedad Anónima if you prefer. If you would like to learn more about the differences, you can read them in our dedicated blog about the SA company in Spain.

Spanish limited liability company

How does the decision-making process work within a Spanish SL?

By default, a majority of shareholders will make the decisions. However, the shareholders can change the articles of incorporation to increase the required level of majority.

Do I need a lawyer to set up this company?

While Spanish law doesn’t require you to set up a limited company with the help of a lawyer, most of the time, people use a lawyer to set up an SL Company in Spain. It is common to use a lawyer if you do not experience Spanish corporate law.

Can I register the company without going to Spain?

Yes, that is fine. You can employ a lawyer or law firm in Spain to register for you.

Are there any restrictions on foreign shareholders?

No, foreigners and non-residents can own shares of a limited liability company in Spain.

Company formation of Spanish SL


An SL Company is your leading choice if you want to set up a business in Spain. In comparison, it is similar to the Sociedad Anónima company on paper. However, it has fewer costs and responsibilities and is perfect for medium-sized companies. Furthermore, the registration process for an SL Company does not take as long as that of a SA company. Finally, there are no restrictions or requirements on who can be a shareholder or a director of an SL Company. If you want to form an SL company, we can take care of the accountancy and company formation.

Disclaimer: Information on this page may be incomplete or outdated. Under no circumstances should the information listed be considered professional legal advice. We highly recommend seeking guidance from a legal expert if you lack extensive knowledge or experience dealing with any of the procedures outlined in these articles.

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