Starting a business in Spain
In order to start a business, you must first have the right to live and work in Spain.
If you’re a EU citizen, the principle of free movement automatically gives you this right. However, you’ll still need to obtain your Numero de Identificación de Extranjero (NIE). http://www.interior.gob.es/web/servicios-al-ciudadano/extranjeria/ciudadanos-de-la-union-europea/numero-de-identidad-de-extranjero-nie-
A NIE is your unique Spanish tax identification number. You’ll need it to pay your taxes and for anything else that requires an official process, including renting or buying property, getting connected to utilities and opening a bank account.
You can apply for your NIE in person once you’re in Spain or, even better, get it ahead of time via the Spanish embassy or consulate in your home country. http://www.exteriores.gob.es/Consulados/WASHINGTON/en/Consulado/Pages/Visas.aspx
Spanish work permit application
If you need a work permit and plan to start your own business, there are certain rules you must follow.
You have to apply for your permit at the Spanish embassy or consulate in your home country. Besides the application, you’ll also need to provide the following documents:
1. a business plan (if appropriate)
2. evidence that you have enough money to invest in your business and support yourself
3. proof of your skills or experience
4. copies of any business contracts or commissions
5. any applicable licence or registration
6. information about the potential to create employment in Spain
You’ll have to renew your work permit and prove you still fulfill all these conditions every year. However, after five years you can apply for long-term Spanish resident status.
Regulated professions and businesses
Certain professions and types of business - lawyers, architects, healthcare professionals and financial services, to name a few - are heavily regulated. You’ll need to make sure you comply with the applicable rules before you can start trading.
Very often, the process will involve getting your qualifications officially accredited or recognised (called homologación ). Depending on your profession or the type of business you want to carry out, you may also need to apply for a licence.
Rules may vary from region to region, so it’s a good idea to check out both national rules and the rules of the region you intend to base your business in ahead of time.
How can I do business in Spain?
Once your personal legal status is in order, it’s time to decide your business’s legal form. In Spain, you have three main options:
1. Sole Trader
3. Limited Company
Let’s have a look at what each involves.
1. Sole trader
Operating as a sole trader is probably the easiest, cheapest and most flexible way to start doing business, especially if you run your business on your own. It’s also the most straightforward business to set up.
In order to start operating as a sole trader in Spain, you’ll need to do three things:
1. register with the Spanish tax office (the Agencia Tributaria );
2. register for social security ( seguridad social )
3. get a licence (if your profession is regulated)
2. Partnership (Sociedad Civil)
If you plan to go into business with one or more people, but you still want your structure to be flexible, you can run your business as a partnership.
Like sole traders, partnerships don’t require a minimum investment to be set up. However, the process is a bit more time-consuming and expensive.
There are two types of partnership in Spain: general partnership ( sociedad general ) and limited partnership ( sociedad comanditaria ).
Each have their own special requirements and come with different rights and responsibilities. Either way, you’ll need to do the following to set one up:
1. create a partnership agreement and sign it before a notary (a lawyer can draft this for you)
2. include the words Sociedad Civil in your business name (if you have a partnership agreement in place)
3. register with the tax authorities
4. register for social security
5. apply for any licences (including an opening licence for your business premises)
A partnership agreement isn’t strictly required. However, it’s good to have, as it regulates the relationship between you and your business partners and outlines your responsibilities. This is especially helpful if things go wrong, or you have a disagreement.
3. Limited company
Out of the three legal forms available, a limited company is the most complex, formal and expensive to set up and run. It also has a number of distinct advantages over the other forms, including limited liability and more favourable taxation (if you earn more than a certain amount). Some types of businesses must be run as a limited company by law.