How to Start a Business in Spain for Foreigners

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With being the 14th largest economy, Spain is an opportunity that's not to miss to start a business. Spain, the second-largest country in Western Europe, is a highly developed, steadily growing country. Its Ease of Doing Business score positions it as Europe's third most appealing country for establishing a business. Cities with ideal infrastructures, global talent, and an entrepreneurial ecosystem, such as Barcelona or Madrid, are your best bet when determining where to start.

However, if you are thinking about how to start a business, we will solve the problems in your head and guide you step by step.


Everyone can set up a business in Spain, but it can get more complicated depending on your country of origin. If you are from one of the EU countries, the procedure for you is easy. Get your NIE(Tax Identification Number) and EU registry certificate, then proceed to the constitution section. It's easy. However, if you are a non-EU citizen, you first need to get your visa to establish your business in the country.

There are two different forms of work visas: Entrepreneur visa, Self-Employed worker visa.

Entrepreneur Visa: This type of visa requires businesses that would come up with innovative ideas and new technologies. The requirements of this visa may not be as easy as you think. Even though the application process is swift, and you can get your detailed response in 20-30 days, it is laborious to get the residency. However, keep in mind that you need a present a fully detailed plan and prove that you have what it takes to grow your company.

Self Employed Worker Visa: This type of visa allows you to open businesses such as cafes, restaurants, supermarkets. Those are businesses that already exist, so Spain will only allow you to open a business with a self-employed worker visa. Your business does not need to be innovative or technological, nonetheless, not every company is a solid company. Furthermore, you can not form a business if you don't have a good business idea.

Business Type

The action of choosing the business type is crucial. You must think carefully while choosing the business type. In Spain, there are different types that you can choose from.

Sole Trader

If you decide to operate as a sole trader, you will be required to pay income tax(IRPF). Since your activities are regulated by the income tax regime, it is possible that this legal structure may cost you excessive taxes, and this will happen if your annual income is higher than € 50.000 – € 60.000.

Sole Trader & Autónomos

Many times sole traders and autónomos are mistaken with each other. Yes, autónomos also have a work permit as self-employed workers. However, that doesn't mean that the company you set up is an autónomo.

An autonómo is both a freelancer and a company administrator. A freelancer or self-employed person, on the other hand, does not necessarily administer the company.

Limited Liability Company

It is the most common business form because of its many advantages. Not only the registration is simple and efficient but is also the constitution process only requires € 3.000 as a minimum capital investment. If you are confident in gaining over 60.000€, directly constituting a company will be wiser than being a self-employed worker.

One of its primary advantages is that your liability is limited to the amount of capital invested. For example, let's say you invested € 3.000. That means this is the maximum amount that can be demanded of you in the event of indebtedness. In this situation, you are required to pay corporate tax (impuesto de Sociedades) instead of income tax. The corporate tax is equal to %25 of your profits. Also, submitting your VAT returns is required.

Stock Corporation

A stock corporation or ''Sociedad anónima'' is a business type that is for big companies who trade with stocks. For its constitution, you are required to pay €60.000. Also, you can get external financing because the company's shares can be purchased on the stock market.

When you complete those steps, you are required to take the next steps:

Getting your NIE number

Deciding the name of the company

Getting your CIF or tax ID number

Opening a bank account for your company

Establishing the shareholders and creating the shareholder agreement

Going notary and signing the public document of incorporation

Getting the company registered with the tax authorities

Registering the company to the social security



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