Setting up a business in Spain
05 November 2009by Ina Dimireva -- last modified 01 July 2015
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.
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Legal requirements
Setting up a business is a great opportunity. This page provides general information and access to electronic services for setting up businesses in Spain: legal requirements, public services providing assistance, and administrative procedures required.
Legal requirements for the various types of business
When setting up a business, you must decide on the legal form that it will take.
Several factors need to be taken into account when deciding on the appropriate legal form: number of partners, available finance, level of liability to be assumed (limited or unlimited), organisation, business activity to be carried out, and financial assistance that may be received.
In Spain the law provides for various types or legal forms of business, ranging from a sole trader to various types of capital company and special companies.
The most common legal forms in Spain are as follows: sole trader, private limited company and public limited company.
- A sole trader is a natural person who engages in a business or professional activity on his or her own or by employing workers. The sole trader is personally liable for any debts resulting from his or her business activities. Fewer administrative procedures are required to set up as a sole trader than for capital companies.
- A private limited company is a legal form normally used by small and medium-sized enterprises. It is a capital company with limited liability. Its share capital must be at least EUR3000. It may be formed by one person or several partners. Transferring shares is normally subject to conditions. More administrative procedures are required than for sole traders.
- A public limited company is the legal form normally adopted by large enterprises. It is a capital company with limited liability. Its share capital must be at least EUR60000. The shares making up its capital are generally easy to transfer. This is one of the legal forms adopted by companies quoted on the stock market. More administrative procedures are required than for sole traders.
There are other legal forms of business in Spain, including jointly owned entities or special companies.
More information is available through the following links:
Legal forms of business: Ministry of Industry, Tourism and Trade
General procedures for setting up businesses
To succeed, a new business needs a sound commercial strategy and secure financing.
Administrative procedures
This section contains information on the services that can help with setting up businesses in Spain and on the administrative procedures involved.
Support services for businesses
There are various initiatives that can help with setting up, developing and expanding businesses in Spain. They offer advice on administrative procedures, information on financial support, and other types of assistance.
Point of Single Contact on the Services Directive
Businesses and entrepreneurs wanting to set up a service business or provide services in Spain can go to the following website: Spanish Point of Single Contact on the Services Directive. There you can easily and quickly find all the information you need on the procedures required by national, regional or local authorities for setting up businesses or providing a service in Spain.
Spanish Point of Single Contact on the Services Directive
The Services Directive is a European Union law intended to consolidate the internal market in the service sector and help businesses and entrepreneurs to set up service businesses and provide services in any EU Member State. Each Member State has a Point of Single Contact to help businesses and entrepreneurs in the service sector with all the procedures required by the authorities in that country.
Business set-up network and information centre
Entrepreneurs wanting to set up a business in any economic sector can access the Business Set-Up Network and Information Centre (Centro de Información y Red de Creación de Empresas – CIRCE). This initiative supports the set-up of new businesses by helping with the general administrative procedures required by central government and the Autonomous Communities. These procedures can be easily and quickly carried out online.
The Business Set-Up Network and Information Centre also allows businesses to be set up in the most common legal forms in Spain: sole trader, private limited company and simplified limited company.
You can set up your business online by using the CIRCE website or by going to one of the offices in the Network of Business Start-Up Advice and Assistance Centres (Puntos de Asistencia para el Inicio de la Tramitación – PAIT), which can be found throughout the national territory:
Business Set-Up Network and Information Centre website
Business Start-Up Advice and Assistance Centres
Points of Single Contact for Businesses
You can also set up your business by going in person to one of the 30offices in the network of Points of Single Contact for Businesses, located in 15 of the Autonomous Communities. At these offices you can set up any type of business and complete the procedures required by central government, the Autonomous Communities and local authorities. You can also find out about financial support or public subsidies that may be of interest.
This initiative is supported by the various authorities and the Chambers of Commerce.
Points of Single Contact for Businesses
Other initiatives supporting business start-ups
In Spain there are other initiatives that can help with setting up, developing and expanding businesses. These initiatives are run by the various authorities: Autonomous Communities (regions), local authorities, Chambers of Commerce, foundations and other institutions.
National Council of the Chambers of Commerce
General procedures for setting up and registering a business
Setting up a business involves a series of procedures, most of which are the same for all types of business, but some of which are specific to the business activity involved. Different authorities are responsible for these procedures: central government, Autonomous Communities (regions) and/or local authorities.
In order to set up as a sole trader, you do not need any share capital and the administrative procedures to be completed are limited. The downside is that sole traders are personally liable for the obligations or responsibilities resulting from their business activity.
The procedures to be completed with central government include registration in the register of businesses and professionals kept by the National Tax Office and registration with Social Security. More information is available through the following link:
General procedures for setting up businesses
The main advantage with companies is that their financial liability is limited. They are liable only up to the amount of their share capital, with the personal assets of the partners never being called upon.
However, more procedures are involved:
General procedures for setting up businesses
Together with these general procedures, businesses must complete other specific procedures associated with their business activity, where applicable.
More information is available through the following links:
Point of Single Contact on the Services Directive website
General procedures with regard to the National Tax Office, Social Security and Business Registers
When setting up a business, this must be registered with the National Tax Office and Social Security.
Social Security: business registration, information
Social Security: online business registration
For procedures with the Business Register:
Resources
Useful information and services for businesses and entrepreneurs are available on the following websites:
Useful information on investing in Spain: INVEST IN SPAIN
Entrepreneurship and support for setting up businesses
Financial support for businesses: Official Credit Institute
Source: Your Europe