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The cost of starting a business in Spain? How international lawyers can help with the process
New tariffs, roles, and compliance were applied to British citizens and businesses at the end of 2020 when doing business with the EU following the Brexit deal. Although there are many reasons why British nationals may want to start a business in Spain, it is important not to overlook that setting up a company in Spain will have expenses that should be considered.
This guide will explain the costs of starting a business in Spain for non-Spanish citizens, and how hiring international lawyers can help this process.
Click on the links below to jump to that section:
Read about who can start a business in Spain, including Spanish and non-EU citizens.
Find out what is needed to start a Spanish business, and how much this will cost for non-EU citizens.
Find out what the Spanish tax laws are for commercial enterprises, and how international lawyers can help.
Discover other issues you should consider when starting a business in Spain.
Read the most frequently asked questions about the costs of starting a business in Spain.
Who can start a business in Spain?
Although there are more restrictions that affect trading between the United Kingdom and the European Union, this does not affect all business activities. Anybody can start a business in Spain regardless of if they are an EU citizen or not.
Setting up a company in Spain as a foreign national
British nationals planning to start a business in Spain will need to obtain the appropriate residence permit and visa that allows them to engage in entrepreneurial activities. This will depend on the nature of the business and intended duration of stay.
There are various types of commercial entity that you can incorporate. If you are not sure the best type of business entity to set up that is suited to your business, Giambrone & Partners, are a team of international lawyers that includes both English and Spanish speaking. We can provide sound advice and offer the best solutions when setting up a company in Spain.
Find out more about a foreign national setting up a company in Spain here.
What are the procedures involved to start a business in Spain and the costs involved?
Regardless of whether you are starting a new business in Spain or creating a Spanish branch of an existing company, non-EU citizens will require to provide a range of documentation. Our Spanish lawyers (or Abogados) can assist with the following:
NIE number
To set up a limited company in Spain, non-EU citizens must obtain a foreigner’s tax identification number (NIE), which is required before carrying out any financial or legal transactions in Spain.
Applicants will need to provide proof of a Spanish address, valid photo ID and payment of an administration fee; which is currently an estimated €12.00
Registering the business
The business, or branch of an existing business, will need to be registered at the Mercantile Registry. This can cost around €250.
Minimum initial share capital
Following the opening a Spanish bank account, new companies are required to prove they have sufficient funding to launch a successful business. Therefore, a designated amount of money must be deposited in the business bank account.
Currently, the minimum initial share capital for a Spanish business is €3,000.
Deed of incorporation
Business owners forming a company in Spain must apply for the deed of incorporation; setting out the relevant details. A local notary must be present to sign the deed and there must be evidence of minimum initial share capital having been deposited in the bank account. Within 30 days of signing the document, the business owner must pay 1% of this capital to the local tax office related to stamp duty.
Giambrone & Partners has a comprehensive understanding Spanish law, and has the resources to make all the arrangements necessary.
Contact our Spanish lawyers today for more information on setting up a company.
How much is taxation on Spanish businesses?
If you reside in Spain for more than six months, you will have to pay Spanish tax. You must submit a tax return and also pay income tax if the annual tax is more than €22,000.00.
Corporate tax
Currently, corporate tax is at the rate of 25% and must be filed within six months and 25 days following the end of the accounting period; usually resulting in 18% of the tax liability. However, it is important to note that newly formed companies in Spain, since 2022, only liable to pay 10% for the first two years. After which, the company will be taxed at the normal 25%.
VAT
Spain has one of the lowest VAT (Valor Acrescentado) tax rates in the world and is charged at 16%.
Social security
Setting up a Spanish company also requires payment of contributions to social security, which involves contributions of around €265 per month. This can be undertaken by your international lawyer, who can register for social security with your deed of incorporation and NIE.
The business will also require a tax number, which can be obtained by completing the tax form 036. At Giambrone & Partners, we provide a bespoke service to help you ensure all business activity in Spain is completely legal and follows Spanish regulations.
Contact our Spanish desk today for more information.
What other considerations should you make when setting up a company in Spain?
After forming a company in Spain, there are all the other expenses that usually are occurred, such as staff costs and business insurance to protects your interests. Other considerations include:
Golden visa (Investment visa)
In Spain, the Golden Visa is an investment opportunity that also provides for non-Spanish nationals to gain residency. The visa can be obtained by various types of investments such as purchasing real estate worth at least €500,000, as well as a range of other large business investments directly related to creating employment and contributing to government bonds.
Find out more about the Spanish Golden Visa, and how Giambrone & Partners can help.
Instructing a multi-lingual multi-jurisdictional law firm for legal advice
Starting a new business can be a challenge. Consider working with a multi-jurisdictional multi-lingual law firm that can provide wide-ranging advice on the company formation process and act on your behalf before Spanish courts. There will be a considerable amount of legal considerations including employment law and consumer law; making the advice of legal experts invaluable.
If you would like to set up a business or branch office in Spain, please email us at clientservice@giambronelaw.com, or fill in our contact form.
Frequently asked questions
Is Spain a good place to start a business?
There are various advantages to starting a business in Spain, including Spain’s well-developed infrastructure and lower tax burdens compared to the United Kingdom.
Find out more about if Spain is a good place to start a business here.
Contact Giambrone & Partners’ Spanish Desk for assistance in setting up a Spanish business.
Related content
Can I Start a Business in Spain After Brexit? A Guide for Brits
Can Foreigners Set up a Business in Spain, & What is Required?