How To Start a Business in Spain: A Guide for Foreign Citizens

When it comes to opening a new business on foreign soil, it can be a daunting position to put yourself in. You’re vulnerable practically everywhere: from your finances to your personal background. Getting your head around the key regulations and logistics might seem overwhelming, but then nothing worth having ever came easy.

The Spanish territory is the ideal landscape for foreigners from all around the world to start their own company. Ideal infrastructures, worldwide talent, and an entrepreneurial ecosystem makes cities like Barcelona or Madrid your best choice when deciding where to start. Nevertheless, the specific steps you should take in order to successfully have your company start running are not that clear.

If you’re someone with experience of Spanish life, it’ll come as no surprise to learn that setting up a business in Spain is anything but straightforward. There are endless bureaucratic hoops to jump through, taxes and charges at every turn, and you’re unlikely to be able to manage it without paying someone to help you. Here are our suggestions for the easier entry routes into life as el empresario.

But despite having suffered a lengthy period of economic woe, it’s still the fifth largest economy in the EU. And it’s growing again, so there should be plenty of opportunities for a business to flourish here. Although there are 45 million potential consumers in Spain, unemployment – especially among the young – is high and this hampers the spending power of a key demographic. Still, depending on what kind of business you’re thinking of, you do also have access to the additional marketplace made up of the 70 million visitors who flood into the country every year.

Where should you start?

Obtaining a business visa

For non-EU citizens moving to Spain to start a business, first thing’s first. You need a valid work permit. This means going to the Spanish embassy in your home country and going through the bureaucratic hurdle. They’ll need to see the essential documents stating that you have enough capital to invest in your business and support yourself while living in Spain. Aside from making sure you get the right kind of Spanish Visa, you may also be required to submit a business plan and proof of your skills and experience. The Spanish government can ask you to provide evidence on how your company could create jobs for workers in Spain.

Work permits must be renewed every year, but after five years you can instead apply for resident status in Spain. This removes the need to get a work permit in the future.

Licenses and permits

Before setting up a business in Spain, all resident and non-resident foreigners with financial affairs in Spain must have a foreigner’s tax identification number (NIE).

The NIE is essential for any financial transactions in Spain, such as incorporating a company. If you are a Spanish national, you will have a NIF rather than an NIE number. Applications for an NIE can be made at a processing office for foreign citizens at any national Spanish police station.

Registering your business in Spain

After jumping through various legal hoops, you can now ease your way into setting up a limited company. A limited company because you’ll first need to obtain a certificate to verify that the company name you want to use is not already taken. This is called a no-name coincidence certificate. You can do this by yourself through the RMC website. This step takes about three days before you receive the answer from the RMC by courier.

Setting up a business bank account in Spain

After you’ve obtained a tax code and the certificate of a no-name coincidence for a limited business, you will need to open a business account with a Spanish bank and make a deposit of €3,000. This is the minimum share capital allowed when setting up a limited company. Evidence of payment can be obtained in the form of a bank certificate which will need to be provided to a notary or lawyer showing the act of incorporation of the company.

Tax and social security considerations

Every company needs a tax number. Businesses won’t be able to operate without it. To obtain this, you will need to complete the tax form that can either be done online or by hard copy, delivered to your local tax office. You can find information about the form, along with form downloads and links to completing online at the Spanish Tax Agency.

To register for a verified social security when starting a business in Spain, you will need to take along your deed of incorporation, NIE, CIF, and form TA 0521 (which can be obtained from your local social security office).

During the last years, Spain has become a real business European centre. Madrid, Barcelona or Valencia are important entrepreneurial hubs that attract all the elements that can make a business successful. No matter if you are a foreigner or a local citizen of Spain, everybody is allowed to start your business in the country and enjoy the life of an entrepreneur in one of the greatest nations in the world.