Guide to Setting up a Business in Spain
Steps, requirements, and considerations for foreign entrepreneurs wishing to create a company in Spanish territory.
Step 1: Planning and Choosing a Legal Structure
Before starting any formal procedures, it's crucial to define your business idea and choose the appropriate legal structure. The most common forms for foreigners are:
Limited Liability Company (SL)
The most popular choice for SMEs. Liability is limited to the capital contributed, and the minimum share capital is just €1.
Sole Trader (Autónomo)
Ideal for independent professionals. No initial capital is required, but liability is unlimited. See our guide for freelancers.
Public Limited Company (SA)
Designed for large companies seeking capital from investors. It requires a minimum capital of €60,000 and has more complex management.
Branch of a Foreign Company
A secondary establishment of a foreign parent company, without its own legal personality. No specific share capital is required, but liability rests with the parent company. It's an option for expanding existing operations into Spain.
Step 2: Incorporation Procedures (Example for an SL)
Creating a Limited Liability Company (SL) involves a series of formal steps:
- Obtain NIE: All foreign partners and directors must have a Spanish Foreigner Identification Number (NIE).
- Company Name: Request a Negative Name Certificate from the Central Mercantile Registry.
- Bank Account: Open a bank account in the company's name and deposit the share capital.
- Articles of Association: Draft the bylaws that will govern the company's operations.
- Notary Deed: Sign the public deed of incorporation before a notary.
- Provisional NIF: Request a provisional Tax Identification Number from the Tax Agency.
- Mercantile Registry: Register the company in the Provincial Mercantile Registry to obtain full legal personality.
Step 3: Launch and Ongoing Obligations
Once the company is incorporated, you must comply with the following to start operating:
- Tax Agency Registration: File the census declaration (Form 036/037) to register the economic activity.
- Social Security Registration: Register the company as an employer (if hiring) and register directors and employees in the appropriate system.
- Municipal Licenses: Obtain the necessary opening and activity licenses for your office or premises.
- Tax Obligations: Periodically file VAT returns, withholdings, Corporate Income Tax, etc.
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