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Expats Owning and Operating a Business in Spain

Submitted: August 2013

If you are an expat wishing to start your own business in Spain, the first step is to ensure you have the legal right to live and work there. Citizens from the EU, Norway, Lichtenstein, Iceland and Switzerland are free to live and work in Spain. They also have the same legal rights to own a business in Spain as Spanish citizens but have to obtain the NIE number (‘Número de Identidad de Extranjero’) before they can start a business.

Expats from other countries will have to obtain the applicable residence and work permits for entrepreneurs and prove that they have sufficient funds available to start their own business. For detailed information see the homepage of Invest Spain, a government-sponsored initiative to increase investments in Spain.

For other immigration matters see the Expat Briefing guide on Immigation.


Business Plan

The Spanish market is very competitive, therefore it is vital to have a good business plan before starting your own business. First of all, you should have a clear idea of what you wish to do and in how far your business idea is feasible. Make sure to research which businesses already operate in your field and determine your potential customers, partners and competition. At the same time, take ample time to consider your best financing options. Based on your research you can then develop a proper business plan which sets out your business objectives, target market, commercial strategies, potential obstacles and financial projections.

To read more on business plans see the guidelines prepared by the Spanish Ministry of Industry, Energy and Tourism (Ministerio de Industria, Energía, y Turismo.)


Legal Structure, Registration and Obligations

Another important step is to decide which legal structure is best suited for your business. The legal structure will determine the nature of your legal, financial and tax obligations. The two most common types are Sole Trader and Limited Companies. For an overview over other business structures see the Invest Spain Website.

Sole Trader

The advantage of starting your business as a ‘sole trader’or autónomo is that it is easy and inexpensive to set up. Furthermore, you will have full ownership and control over the business and all profits after taxes will remain yours. At the same time, however, you will be personally liable for all losses your business might make.

To start a business as a sole trader, you will have to fulfil all the following:

Once registered, you will have to start making monthly payments towards the special scheme for self-employed persons (Régimen Especial de Trabajadores Autónomos) and declare your income from business activities on your personal income tax return.

For further details have a look at the Invest Spain article on Sole Proprietors.

Limited Company

A ‘limited company’ (sociedad limitada) is an independent legal subject. It is typically led by a director and has members who own shares in the company. Its main advantage is that its finances are separate from your personal finances.

The process of setting up a limited company involves a great deal of bureaucracy. Hereby, the most important steps include:

For detailed guidelines have a look at the Invest Spain article on Limited Liability Companies.

To read more on taxes for expats in Spain, see TAXATION.


Employing staff

As employer, you will have to ensure that your business complies with Spanish labour regulations. You should familiarise yourself with different types of contracts, minimum wage requirements, equal opportunities policies, work permits and recruitment options. The Spanish Government provides extensive information online at SEPE. See also: Work Culture and Labour Market.


Further information

The Spanish Government runs the online platform CIRCE, where you can find further information on setting up businesses. There you can also start your electronic business registration process. If you prefer to set up your business in person or wish to obtain additional information prior to doing so, you can visit one of the points of contact of the Chamber of Commerce.

Another useful resource for expats who are starting a business in Spain is the Invest Spain Website, which is also available in English.

 

 



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