Starting your own business in Spain is a good idea.
There are many advantages to starting a small business and becoming a part of Spanish economics, however, there are also a number of things to consider before you take the first step on your way to registration of a company in Spain.
Therefore, it is important to get legal assistance from a competent lawyer. So, there are at least the following 10 things you should know before opening a company in Spain:
- 1. Legal form of the company in Spain.
- 2. Spanish business visa.
- 3 NIE number.
- 4. Certificate of the company name.
- 5. A bank account in Spain.
- 6. CIF (tax identification code for business)
- 7. Spanish tax system.
- 8. Hiring employees in Spain
- 9. Business etiquette in Spain
- 10. Legal assistance and accounting services
1. Legal form of the company in Spain.
The most frequently found and popular legal structures in Spain are the following:
This is useful for self-employed persons. There is no minimum financial investment when establishing oneself as self-employed in Spain. There is an unlimited liability and the person is responsible for all debts incurred.
As the owner of the company he directs and administers it, he has unlimited responsibility with his assets for any debts that he may have with any third party.
A partnership is formed between two or more people with unlimited liability and no minimum investment is required. Any debts or financial obligations are divided among the members of the partnership.
Limited Liability Company
a company that requires some authorized capital but is advantageous due to this limited liability.
Public Limited Company
A company with limited liability but is more suitable for large business.
2. Spanish business visa.
According to the Spanish law, foreigners seeking entry to Spain or intending to start up, develop or run a business activity as a businessman, may obtain a business activity residence permit, which will be valid throughout the national territory. Employees traveling to Spain on business are also business visa applicants.
One of the business visa types for large investors in Spain is called investment visa. Investment visa is for those seeking to invest large amounts of money in a new or already established business in Spain.
3 NIE number.
The Spanish NIE number acts as a tax and identification number and is used in all financial transactions that involve the Spanish tax office.
An NIE number is mandatory for all foreigners with financial, professional or social affairs in Spain, regardless of whether they are a resident or non-resident in Spain.
European citizens typically need to apply for an NIE number after three months of residence in Spain, while non-EU citizens will typically receive their NIE application along with their Spanish residency.
4. Certificate of the company name.
If you are planning to register a new company in Spain you should think about the appropriate name of the company and reserve it in the Mercantile Register to be sure your chosen name has not already been taken.
5. A bank account in Spain.
A bank account for your company in Spain is probably one of the most important things you cannot omit if you want your business to function without problems.
The opening of a bank account for your company in Spain is the first thing you have to do if you expect successful activity in the future.
The holding of a bank account gives you an opportunity of handling financial affairs of your own business, applying for financial services and products offered by your bank.
6. CIF (tax identification code for business)
CIF is actually a company registration number. Spanish registered companies in certain cases would automatically have this number.
This code provides formal registration of the company in Spanish tax system. It should be noted that whereas in many countries a company would be issued with a separate VAT number, in Spain the CIF also forms the VAT number.
7. Spanish tax system.
Taxes in Spain are split between state and regional governments, with each of Spain’s 17 autonomous regions deciding on its own tax rates and liabilities.
A wide range of taxes are levied on different sources, the most important ones being income tax, social security contributions, corporate tax, value added tax; some of them are applied at national level and others at national and regional levels.
8. Hiring employees in Spain
If you hire employees in Spain, you should apply for the contribution account number of the company: It must be requested before the worker begins working in the company.
Most employees from non-EU countries will need a work permit to live and work in Spain. Nationals of the EU/EEA or Switzerland can live and work in Spain without restriction.
Workplace opening request must be carried out by companies that open a new workplace. The request is addressed to the Provincial Department of Labour, Social Security, and Social Affairs.
Request for“libro de visita” or visiting book is mandatory for all companies or self-employed persons when they have employees. It will be used by the social security inspectors to write comments during an inspection and must be available at any time upon request of the authorities.
A complaints book ‘libro de hojas de reclamacion’ is obligatory for all businesses and must be available for clients who wish to make any claims or complaints.
9. Business etiquette in Spain
If you start a business in a foreign country it is worth to know the business etiquette of that country, since knowing these rules is often a way to success.
Generally, Spanish people are a very communicative. They do not deem their work to be the most significant thing in life. In general, social ties are more important for Spanish people than working life or business.
So, personal contacts are vital for you if you want to start a business in Spain. Traditionally strong hierarchical and bureaucratic culture in Spain is changing now due to processes of globalization and changes in Spanish society itself.
10. Legal assistance and accounting services
Today, in order to successfully operate a business in a foreign country you need to have at least some sense for the legal environment of the country, for finances and running business.
This does not necessarily mean that you must have good financial or legal background. Therefore, if you are planning to start your business in Spain, it is highly recommended to find and hire a professional company that provides professional legal assistance and accounting services.