Setting up a business in Spain

The legislation in force which governs the formation of a new company in Spain sets out the requirements and steps that apply to the different types of company, from sole traders to the most sophisticated forms of trading company.

Legal requirements

Types of company

Once you have decided to set up a new company, you decide its legal form.

Individuals are much easier and cheaper to set up; the number of steps involved is smaller, they require no any start-up capital, they are exempt from registration with the companies registry, so no notarisation fees are involved. Furthermore, the tax system governing them is far simpler, as tax is collected as Impuesto sobre la Renta de las Personas Físicas (personal income tax) (IRPF).

Bodies corporate, set up as trading companies or special trading companies, generally require start-up capital, must have bylaws, be registered with the companies registry and pay Corporation Tax. In contrast, public liability in this case, for example, for bankruptcy or indemnity, is limited to the value of start-up capital, whereby personal wealth of each partner is not at risk.

Legal forms of companies (Ministry of Industry, Tourism and Trade)

Factors such as grants for companies from government, sometimes limited to a certain type of company, may influence the choice of business model to be adopted when starting a company.

Access to finance — Spain

Administrative procedures

Formation of a new company entails a series of official procedures, where up to four levels of government may be involved (Treasury, Social Security, Regional Governments and City Councils).

Full description of the types of company and formation procedures [ES] (Ministry of Industry, Tourism and Trade)

Individuals only need to register for Impuesto de Actividades Económicas (I.A.E - Business Tax), on the business register (Tax Office) and with the Social Security, and must complete a series of procedures detailed on the Ministry of Industry, Tourism and Trade website.

Trading companies must go through an initial incorporation process, from which individuals are exempt, and which includes an application for a certificate for commercial companies stating that their business name is not already taken, and a deed signed in the presence of a notary public, and registration with the Companies Registry. The required procedures are also detailed on the Ministry of Industry, Tourism and Trade website.

Fast-Track Company Formation Service [ES] (Government portal)

The Ventanilla Única Empresarial (VUE - One-Stop Company Shop) is a joint initiative set up by government and the Chambers of Commerce. It has more than 30 service centres in 13 Administrative Regions. At these centres, entrepreneurs can set up a new company without having to visit any other government offices. VUE also offers advice on formation of companies and how to apply for grants.

One-Stop Company Shop [ES]

Resources

The network of Puntos de Asesoramiento e Inicio de Tramitación (PAIT - Advice Centres and Commencement of Processing) implemented by the Ministry of Industry, Tourism and Trade allows limited partnerships of "limited liability partnership" and "new limited partnership" type to be set up online. At PAITs, entrepreneurs receive personalised information on their proposals for starting a new business, and can then carry out all of the steps required to set up their new company online and then arrange notarisation.

This network, which is expanding, now has more than 280 offices, in 13 Administrative Regions.

Advice Centres and Commencement of Processing [ES]

Online formation of companies [ES] (Government portal)

Online registration of a new company [ES] (Government portal)

Company formation simulation service [ES] (Government portal)

With these tools the time required to set up a new company, currently around one month, is cut down to less than one week.

Formation of a new company requires an initial feasibility study, which includes planning the business, risk assessment, financial capacity and market research. The "Business Plan", a tool created by the General Directorate of SMEs at the Ministry of Industry, Tourism and Trade, makes this task easier.

Business plan [ES] (Ministry of Industry, Tourism and Trade)

This General Directorate also offers various self-assessment tools to allow entrepreneurs to assess their enterprising spirit and the real prospects of the company they are proposing. Aside from a good business plan, an entrepreneur should also draw up a successful commercial strategy and have access to finance.

Interactive assessment tools for formation of companies (Ministry of Industry, Tourism and Trade)

Programmes

The TUTELA scheme, set up jointly by the General Directorate of SME Policy, EOI Escuela de Negocios (Business School) and Fundación BANCAJA (the BANCAJA Foundation), is a Mentoring and advice scheme for SLNEs (new limited companies) special and SRL (LLPs), set up online through the network of PAITs. Its purpose is to assist in consolidation of companies.

TUTELA scheme [ES]

Personalised help and advice

The Chambers of Commerce are actively involved in all steps required in company formations, from initial assessment to official processing and consolidation once a company has been set up.

Chambers of Commerce [ES]

The Enterprise Europe Network provides businesses with information and advice through its local partners.

Enterprise Europe Network – contact points – Spain

SOLVIT helps businesses deal with problems that arise when national authorities wrongly apply EU market rules.

SOLVIT – contact points – Spain

Source: European Commission