Start a Business in Spain

The Spanish State Department for Trade of the Ministry of Industry, Tourism and Trade offers an English-language website with a step-bystep guide to the process of starting a business in Spain. Note: This INFOrmation Page is an introductory overview of the options and processes to set up in business in Spain. Expert advice should always be considered before any action is taken.


Who May Start a Business in Spain
Foreigners may undertake a for-profit activity in Spain as long as they are legally entitled to work in the country. EU citizens may set up a business in Spain without restriction once they have their NIE number
(Número de Identificación de Extranjero). A non-EU citizen who wishes to set up a company in Spain must have
the necessary visa and work permit and prove that they have a minimum capital investment to start a business. They will also need to prove that they will provide work for Spanish nationals.

Regulated Professions
Certain professions in Spain are regulated and, as such, the person will need to have their diplomas or qualifications recognized in order to exercise their economic activity. These include doctors, dentists, midwives,
lawyers, paramedical professions, lawyers, accountants, teachers and engineers.

Requirements for a Business in Spain
Once the appropriate business structure is selected, it is important to be aware of the practical requirements of setting up a business in Spain.

Registration of the Company Name
An application must be made for a Certificate of Uniqueness (Certificación Negativa de la Denominación Social), to prove that the name of the company is not already registered. This can be obtained from the Central Commercial Registry (Registro Mercantil Central) for a small fee.

Open a Bank Account
A bank account must be opened and the capital deposited. The amount that will need to be deposited will depend on the type of company that is to be set up. A deposit certificate will then be issued.

Obtain a Public Deed of Incorporation
This will need to be done before a notary. The public deed of incorporation will include the names of the company shareholders, the amount of shares held by each shareholder, the type of administrative body managing the company and the identity of the administrators or directors. The public deed of incorporation must also include the tax identification number of each shareholder as well as the bank deposit certificate and the Certificate of Uniqueness.

Apply for a CIF
An application must be made for a company tax identification code (Codigo de Identificacion Fiscal/CIF). This can be done at the Tax Office (Delegación de Hacienda). A provisional number will be given straight away, and a permanent CIF number must be obtained within six months.

Pay Transfer Tax and Stamp Duty
The next step is to pay transfer tax and stamp duty (Impuesto de Transmisiones Patrimoniales y Actos Jurídicos Documentados) at the local Tax Office of the province in which the company is incorporated. The deed of incorporation and the CIF will need to be presented and the cost is one percent of the company capital share. The payment must be made within 30 days following the public deed of incorporation. Note: Companies that are formed in the Canary Islands are not liable to pay stamp duty.

Register the Company
Once transfer tax has been paid the company needs to file the public deed of incorporation with the Central Commercial Registry (Registro Mercantil Central) in order for the company to be registered. Registrations
costs will depend on a number of things including the number of shareholders and the capital invested. Registration must take place within two months of the date the public deed of incorporation was granted.

Submit a Formal Declaration to Start Activity
A formal declaration to start company activities (Declaración Censal de Inicio de Actividad) needs to be filed at the local Tax Office (Delegación de Hacienda).

Register for Tax
The company will then need to be registered for tax at the local Tax Office. The Tax Office will need a description of the business activity, business starting date and a description of the business premises. Once the Tax Office has the relevant paperwork the company will be allocated an official activity code in order for the company to pay taxes.

Legalized Company Books
Under Spanish law, companies must keep accounts books, a minutes book and VAT (IVA) register books. These statutory books must be submitted to the Central Commercial Registry to be certified and stamped
before they are used.

Obtain an Opening License
A license to open business premises (Licencia Municipal de Apertura) must be obtained from the Town Hall. The cost of the license depends on the intended business activities and there may be different requirements for the license depending on the area or district in which the business is located. The only document necessary to present to the Town Hall is the public deed of incorporation.

Notify the Regional Work Authorities Office
Before starting the econmic activity, companies must notify the Regional Work Authorities (Delegación Provincial de la Consejería de Trabajo e Industria). Companies must keep a log book (Libro de Matrícula) at all times. Details
of the company, the work place and business activities must be keptin this book. The book must be made available to the Labour and Social Security Inspectorate at all times. Any foreign investments used to set up a business in Spain will need to be declared at the Spanish Investments Register (Registro de Inversiones).

Online Company Registration
A New Enterprise Limited Company (SLNE) and Limited Liability Company (SL/SRL) can be created with the assistance of the Counselling and Start Process Point (Puntos de Asesoramiento e Inicio de Tramitación/ PAIT). PAIT can provide information and transmit details to various governmental authorities, saving the applicant the task of visiting each office separately. A notary must complete the Deed of Incorporation, but theoretically, PAIT can assist with the rest of the proceedings.

Sole Trader/Sole Proprietor (Empresario Individual or Autónomo)
There is no minimum financial investment when establishing oneself as self-employed in Spain. There is unlimited liability and the person is responsible for all debts incurred. Before setting up as an autónomo, it is necessary to obtain an NIE. Non-EU citizens will need to apply for a combined self-employment work and residence visa as well.

Anybody who wishes to work as self-employed, regardless of their nationality, will then need to carry out the following steps:
1. Register to pay IAE (Impuesto de Actividades Económicas)
2. Register a declaration for starting a business (Declaración Censal de Inicio de Actividad) – this can be done at the tax office (Delegación de Hacienda)
3. Register for social security within 30 days of registering to pay IAE

Once registered for social security, the self-employed worker will need to make monthly payments into the self-employed persons system, known as the RETA (Régimen Especial de Trabajadores Autónomos). This must be paid even if the person has had no income or is on sick leave or maternity leave.

Co-ownership — Comunidad de Bienes
Similar to a partnership, this form of company is made up of two or more people who share ownership of a common property or the right to something. There is unlimited liability for each of the partners. A Comunidad de Bienes (CB) is relatively simple and quick to set up and there is no minimum financial investment. To create a CB, a partnership agreement (contrato de constitución) will need to be drawn up by the members (comuneros) stipulating the amount contributed by each partner.

Once this is done the partners will need to:
1. Register to pay IAE tax (Impuesto de Actividades Económicas)
2. Register a declaration for starting a business (Declaración Censal de Inicio de Actividad) – this can be done at the tax office (Delegación de Hacienda)
3. Register for social security
4. If there are business premises, the person must apply for an opening licence (Licencia Municipal de Apertura) at the Town Hall

IAE (Impuesto de Actividades Económicas)
New companies are exempt from this tax for the first two tax periods and companies with a turnover of less than a certain amount will not have to pay it. Companies must register for this in order to have the correct
code number (epígrafe) for their specific activity.

Partnership (Sociedad Civil)
A partnership is formed of two or more people and no minimum investment is required. Any debts or financial obligations are divided between the members of the partnership. To set up a partnership, the following
steps will need to be completed:
1. Sign a partnership agreement (contrato de constitución) before a notary
2. Register to pay IAE (Impuesto de Actividades Económicas)
3. Register a declaration for starting a business (Declaración Censal
de Inicio de Actividad). This can be done at the tax office (Delegación
de Hacienda).
4. Register for social security
5. If there are business premises, the person must apply for an opening licence (Licencia Municipal de Apertura) at the Town Hall Note: The partnership agreement is not compulsory. However, if the partners choose to sign a partnership agreement, the company name must include Sociedad Civil.

How to Set Up an SA, SL or SLNE
The Sociedad Limitada (SL) is the most common form of company in Spain and is similar to a limited company in other countries. The advantages of this sort of company structure is that there is a minimum of capital required and limited liability to the owners. The New Business Limited Company is a simplified form of the SL but has its own naming requirements. The company name must include one of the founder’s names and a registration number. It must also have the words SLNE or Sociedad Limitada Nueva Empresa. Also, there cannot be more than five shareholders at the start. An SA corporation is the equivalent of a public limited company with a large minimum trading capital.

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