Starting a business in Spain offers exciting opportunities for foreign entrepreneurs. However, to navigate the Spanish business landscape effectively, it’s crucial to understand several key aspects.
This comprehensive guide covers essential requirements, business structures, tax obligations, a step-by-step plan, and cost considerations for running a business in Spain.
Is Spain the ideal spot to kick off your business venture?
Absolutely! Spain isn’t just a sunny escape—it’s a savvy choice for entrepreneurs and investors alike.
Picture this: as a freelancer or business owner, you won’t be bogged down by Spain’s high unemployment rates. Instead, you’ll have the freedom to set your own rates, potentially surpassing the average salary and creating jobs for others. Moreover, you’ll enjoy attractive perks like tax breaks and minimal initial capital requirements.
In addition, you can base your operations in vibrant economic hubs like Barcelona and Madrid, which are also incredibly popular with expats.
Economically speaking, Spain is a powerhouse. With the 5th largest economy in the EU, you’ll tap into a growing consumer market and benefit from solid infrastructure. And with Spain ranking as the 11th largest global exporter of commercial services, you can live the Spanish dream while serving clients around the world.
Who can start a business in Spain?
Absolutely anyone, regardless of nationality, can start a business in Spain. The country doesn’t distinguish between EU and non-EU citizens when it comes to business ventures. Spain actively seeks to attract foreign talent, making it a prime destination for international entrepreneurs.
Step-by-step for incorporating a company in Spain
| No. | Steps and document required | Comments | Approximate timings |
| Granting powers of attorney by the shareholder of the NewCo in favour of Click & Law lawyers that will appear before the Spanish Notary Public to incorporate the NewCo in Spain, to obtain the Foreign Identification Number, declare the foreign investment and obtain the Tax Identification Number for the shareholder. | We would need to be provided with the following information: Details of the mother company (the entity that will be incorporating the Spanish company and becoming its sole shareholder);Details of the parent company’s representative (the individual that will be granting the powers of attorney on behalf of the parent company); and If the power of attorney has been granted outside of Spain, the power of attorney must be notarised and apostilled in accordance with the Hague Convention | 10 working days | |
| Obtaining certificate of good standing of the shareholder of the NEWCO (if legal person – not an individual). | The certificate of good standing must be legalized, apostilled and translated into Spanish by certified means. | 10 working days | |
| Obtaining the name Clearance Certificate from the Spanish Central Companies Registry | This certificate is issued by the Central Commercial Registry and confirms that the company’s name is available. Five potential corporate names can be requested. This certificate must be applied for by one of the founding shareholders, is valid for a period of three months and can be renewed for 3 more months. The Spanish Central Companies Registry usually takes an average of 5 working days from application submission. Please indicate the preferred names for the NEWCO. | 5 working days | |
| Application for a Tax Identification Number (NIF) for the shareholder. | NIFs are applied for by submitting a tax form 036 with the Tax Authorities. It should be signed by the applicant or a duly authorized representative who already has its own NIF number. The following documents (notarized and apostilled or legalized before a Spanish consul if executed abroad) must be enclosed to the tax form: power of attorney of the authorized representative signing the form and good standing certificate (referred to in section 2 above). Certified translations into Spanish are also to be enclosed if the documents are in a language other than Spanish. | 15 working days | |
| Opening a bank account | The company’s bank account should be opened by one of the founding shareholders and each founding shareholder must pay his share into the company’s bank account. The legal minimum corporate capital is €1 for a limited liability company. The attorney empowered under the PoA referred to in item 1 above shall have sufficient authority to open said account. | 1 working day | |
| Issuance of a bank certificate evidencing the transfer of corporate capital for the incorporation | This certificate needs to be included in the incorporation deed. | 1 working day (once the bank account is opened) | |
| Obtaining letters of acceptance of the Director(s) (one for each) of the NEWCO | The signature of the directors in the acceptance letters must be legalized before a Notary and the apostille needs to be obtained (unless the directors attend the granting of the incorporation deed or a Spanish Notary legalizes the letter). Click & Law prepare the draft and can arrange the legalization thereof. | 3-5 working days | |
| Obtaining a Foreign Identification Number (NIE) for the non-Spanish Directors(s) | The public deed of incorporation may not be registered with the Commercial Registry until the NIE of the non-Spanish director(s) have been obtained. | 1 month (depending on the authorities in charge of issuing the NIE number). | |
| Founding shareholders’ Ultimate Beneficial Owner Declaration | All corporate founding shareholders must declare before a Spanish Notary whether they have ultimate beneficial owners (more than 25% of the share capital): | Incorporation date (“X“) | |
| Review and execution of the Spanish Notarial deed of incorporation of the NewCo | In the notarial deed incorporation, the founding shareholders agree to incorporate the company, approve the company’s bylaws, subscribe for shares and appoint the first company directors. | X | |
| Filling and registration of deed of incorporation with the Companies Registry | X + 20 working days from filing |
What are the costs of incorporating a company in Spain?
- Initial capital: EUR 1.
- Legal fee: from EUR 850 to EUR 3.000.
- Notary fee: from EUR 400.
- Registry fee: from EUR 400.
Spain offers a welcoming environment for foreign entrepreneurs. By understanding the requirements and carefully planning your venture, you can successfully start and run your business in this vibrant country.