The Economy of Spain is the world’s fourteenth largest economy in the world. According to the Ease of doing business index by the world Bank It is ranked number 30 among 190 different countries. It has a highly developed business fabric with an optimal strategic location. This article aims to help foreigners understand the key requirements and steps for setting up a business in Spain.
How Can Foreigners Incorporate a Local Company in Spain?
1-Apply for an Identification number (for non-Spanish citizens):
Obtaining the Foreigner Identification number (NIE) is a mandatory step to start the incorporation procedures. The NIE is issued by the Spanish Ministry of Interior.
2-Select your business entity type:
The most used legal forms for a startup in Spain are mainly:
- Limited Liability Company (Sociedad Limitada, S.L.)
- Corporation (Sociedad Anónima, S.A.)
Other business structures are available but not advisable for a small business such as:
- Freelancer (Autónomo)
- Private partnership (Sociedad Civil)
- Jointly-Owned Entity (Comunidad de Bienes)
- Cooperative (Cooperativa)
3-Register your company name:
Three possible names should be submitted to the Central Mercantile Register. The certificate obtained is only valid for two months.
4-Open a corporate bank account and inject the company’s minimum share capital.
5-Proclaim your investment to The Ministry of Economy and Competitiveness
6-Sign the Deed of incorporation in front of a public notary
7-Pay the taxes associated with new incorporations (Usually 1% of the capital)
8-Obtain a Tax Identification number:
The application must be done with the Spanish Tax Agency at most 30 days after signing the Deed of incorporation.
9-Register the company in the Mercantile Register.
How Much Does It Cost to Incorporate a Company in Spain?
The average cost of incorporating Limited Liability Company in Spain is approximately 550 Euros, other business entity types can generate higher costs.
|1.The world Bank Data, accessed september 2020, https://www.worldbank.org/
2.International Trade Administration, accessed september 2020, https://www.trade.gov/export-solutions
3.InvestIn Spain, Accessed september 2020, https://www.investinspain.org/invest/en/index.html