If you are an expat living in Spain who wants to start a business but doesn’t know how, then this post is for you. Get ready to learn which are the steps to set up a company in Spain as a foreigner. Your business is closer to you than what you may think!
Before Starting: Which Type of Company Type Should You Choose?
Before starting the process of constituting a company, we must decide which will be its type.
There are different company structures in Spain, and each of them has its own characteristics. Nevertheless, we are just going to briefly talk about the main ones:
- Self-employed. If you are an entrepreneur planning to conduct your activity on your own, this may be your best choice. The main upside is that there is no capital requirement for its constitution. Nevertheless, you will be fully responsible/liable for all the obligations of your operations.
In terms of taxes, the self-employed individual will pay income tax.
- Private Limited Liability Company (Sociedad Limitada). This is, without any doubt, the most popular firm structure in the Spanish territory. Why? Because of its flexibility and easiness in the registration process, just demanding 3.000€ for the constitution process.
- Public Limited Liability Company (Sociedad Anónima). This structure is reserved for big corporations who trade with stocks. It is characterized by a much more rigid structure, and 60.000€ are needed for its constitution.
Both private and public liability companies will pay corporate taxes.
STEPS TO SET UP A COMPANY IN SPAIN
There are 6 main steps when starting your company in Spain:
1. Get the NIE Number
The first thing to do as a foreigner is to get your NIE number. It is an identification number that will allow you to open a bank account, be tax identified, etc. The NIE is the most important thing in order to freely operate in Spain.
Applying and getting the NIE is a really simple process. The amount of time in which you can obtain it will depend on whether if you are an EU citizen or not: it takes 3 to 5 working days to obtain the NIE number for Non-EU citizens, and the time period for the EU ones will vary depending on the corresponding Immigration Office.
2. Names of the Company
You need to make a list of 3 names you would like to give to your company. They must be sent to the Corporate Register of Spain (Registro Mercantil) in order to check their availability.
If available, they will accept one of the three, depending on the preferences you set beforehand when submitting them. This process can take up to 48 hours.
This will be the official name of the company, which will appear on your invoices and other documents.
Nevertheless, you can ask the registry for an additional name to be used in other non-legal situations or purposes.
3. Opening a Bank Account for your Business
Now that you already have your NIE, you can easily open a bank account in Spain.
Assuming you chose to start a Limited Liability Company, you are required to contribute with 3.000€ in cash for the constitution of the firm, which you will need to have on a deposit in the newly created account.
For sure this is not money lost and can be used in the firm daily operations.
The contribution of that amount of money generates a bank certificate that demonstrates the payment. You must bring this document to the notary on the actual constitution day.
4. Establishing the Shareholders of the Company
At this point, we need to decide how many and who will be the shareholders of the company. Besides, determining who the director of the company will be is a required step.
In that sense, there are two different types of directors.
First of all, we find the corporate director (“director mercantil”). He doesn’t need to have a salary or a work permit, and once a year he needs to sign the annual accounting of the company.
Having this type of director implies that you will also need to have one worker under your structure, as the Spanish legislation requires.
But what many companies actually do is to have one director with corporate and working functions altogether, so the need to have an employee is eliminated.
5. Going to the Notary to Sign the Deed
With all the previously mentioned documents (NIE number, the bank certificate and the certificate from the Registro Mercantil), you now need to go to the notary to sign the deed.
If you rely on us for the whole process of starting a company in the Spanish Territory, we will coordinate and represent you in the notary, getting all the required appointments with the different legal institutions that appear among all the steps.
Then, the notary will register the company in the Company Register. This process can take up to 3 weeks.
6. Going to the Tax Agency
Now that you have obtained the deed from the notary, you should go to the Spanish Tax Agency (Agencia Tributaria) in order to register that documentation and apply for a provisional Tax Identification Number for the company.
And then you are ready to go!
This has been a guide for expats who want to start their business in the Spanish Territory. You will face 6 easy steps in order to set up your company, but it can get a bit tedious sometimes. This is why we highly recommend you to contact us in order to let us help you with the overall process.