Anyone can start their company in the country (either foreigner or native). The only requirement to be able to carry out this process is to be a legal resident and be up to date with the bureaucratic processes. As for foreigners, the process can be more or less complicated depending on the country of origin.
The steps required to build your business in Spain are the same, regardless of your origin. The only difference is in the need to legalize your documentation in Spanish territory as a previous step.
Note: If the applicant belongs to any country of the European Union, the procedure is simple, you just have to get your NIE and the EU registration certificate and you can go to the part of the company constitution. However, if you are not an EU citizen, you will need to get your work visa to start your business in the country.
Residence permit for business
Currently in Spain, there are two types of work residences that will allow you to carry out this process:
- Entrepreneur visa: It is a residence permit that allows you to live in Spain for a period of two years, created for those non-EU citizens who want to open their company in Spanish territory, under certain requirements, the Spanish immigration law grants them residence thanks to their startup. The application process is much faster and you can get your visa after 20-30 days.
Note: In this case it is necessary to present a really detailed business plan that allows you to demonstrate that you have sufficient skills, knowledge and financing methods to ensure that the company has a high cash flow.
It is a temporary authorization that is granted to a foreign citizen not residing in Spain to create or carry out a lucrative work activity on their own in Spanish territory. It is also simply called a self-employment residence.
Note: The project does not necessarily have to be technological for the application to be accepted, not all companies will be valid.
Types of company in Spain
From the legal term, in Spain there are different business structures that are regulated by the Commercial Code. It is important to define the type of company you want to build in order to execute a route that meets its needs:
This type of business does not require any type of initial investment. However, being an individual company there is no distinction between the company’s assets and personal assets. Therefore, the owner will be responsible for any possible debt that the company has. (Your liability is unlimited under a sole proprietorship.)
This business model works for all individuals (Autonomous) whose activity does not require a company to carry it out. Regarding taxes, as an individual entrepreneur you must pay income tax (IRPF). This implies making tax returns annually.
Limited Liability Company (SL)
The most popular business structure in the Spanish territory, due to its flexibility and ease during the incorporation process, which requires only €3,000 as a minimum capital investment.
One of its main advantages is that your liability will be limited to the capital investment made. Therefore, if you have invested the €3,000 of initial capital, that is the maximum amount that can be asked of you personally as a founder in case of indebtedness.
Note: In this case you will not pay income tax, but corporation tax. This is equivalent to 25% of the company’s profits. It is also necessary to present the VAT declaration.
The legal structure is characterized by a much more rigid structure and €60,000 is needed for its constitution. Its main advantage is that it allows external financing, since the company’s shares can be bought on the stock market.
If you want to create a branch of your business in Spanish territory, you must present a power of attorney, a copy of the public deed of incorporation of the company and present a certificate of good standing.
Step by Step
- When creating your business, you should take into account the following steps:
- Get your NIE number.
- Definition of company names and verification of their validity: certificate of uniqueness.
- Obtaining the CIF or tax identification number.
- Opening of a bank account to be used by the company.
- Establishment of shareholders and creation of the agreement that regulates them.
- Go to the notary and sign the public deed of incorporation.
- Registration of the company with the tax authorities.
- Registration of the company in the social security.
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