Foreigners wishing to start a business in Spain must apply for a residence and self-employed work permit. If they have permanent residence there, there will be no need to do so and you will only have to comply with the same requirements that are required for native Spaniards.
If you are thinking of joining the business market as a self-employed person or starting your own company, we have some tips and requirements to take into account when creating a company in Spain.
Table of Contents
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- 1 Requirements to start a business if you are a non eu citizen.
- 2 How to start a business in Spain as an expat
- 3 Choosing a legal structure for your business in Spain
- 4 Foreign companies opening up a branch or subsidiary in Spain
Requirements to start a business if you are a non eu citizen.
First of all, obviously not being a citizen of an EU state, European Economic Area or Switzerland, as the relevant regime would apply.
- Not having a criminal record in Spain in any of the crimes covered by the Spanish code, as well as in the other countries in which the interested party has resided.
- Not being in an irregular situation in the country. Meaning, not to have the entry prohibited, not to appear as rejectable in Spain or any of the territories with which there are agreements in this area, as well as to be outside the period of commitment not to return to Spain after returning voluntarily to the country of origin.
- Have the necessary professional qualifications or accredited experience to carry out your specific activity, as well as, where appropriate, professional membership.
- Be able to justify the ability to cover the investment planned for the implementation of the project, as well as express whether there is the possibility of generating new jobs in Spain.
- Proof that you have the economic capacity to support yourself as well as the expenses deducted from the development of your professional activity.
- Comply with current regulations regarding the specific requirements for each type of business.
Non-EU immigrants intending to set up and start up a business in Spain may obtain a visa allowing them to stay in Spain for a maximum period of one year, provided that the reason for this stay is to manage the procedures prior to setting up a business and developing an entrepreneurial activity. An entrepreneurial activity will be understood to be one that is of an innovative nature with special interest for Spain and for this purpose has a favourable report from the Commercial Office where the investor submits the visa application.
Requirements to start a business if you are a EU citizen.
Fortunately for you, if it is your case, the current agreements between the EU member countries and the territories included in the European Economic Area, state that:
- Every EU citizen has the right to: set up his or her own business (even as sole proprietor) in any EU country (or Iceland, Norway or Liechtenstein).
- Create a branch or subsidiary of an existing company that has its registered office in the EU and is already registered in an EU country.
How to start a business in Spain as an expat
Once it is clear to us that we meet the requirements mentioned in the previous section, the immigrant intending to create a company in Spain will have to present the following documentation, attaching the original copy of each procedure translated into Spanish or co-official language of the territory, at the Spanish Consular Office corresponding to his country of residence.
1. Printed in duplicate of application EX-07, correctly completed and signed.
2. Complete copy of the valid passport or travel document with a minimum validity of four months.
3. In the case of creating a company whose activity is of a retail commercial nature, in a permanent location with a surface area equal to or less than 300 square meters, you must present the declaration of responsibility or previous communication, as well as the proof of payment of the corresponding tax. More information about its regulation, here.
4. In the rest of the activities not included in the previous epigraph, it will be necessary to accredit the list of authorisations and/or licences required to start the activity, indicating the state of the procedures for its attainment, including, if there are any, certifications of application to bodies.
5. Proof of labour qualification and professional qualification, legally required for the exercise of the profession.
6. Demonstrate own investment capacity to face the project or economic guarantee by a financial institution or similar.
7. Business plan that includes the nature of the company, characteristics, sources of financing, capacity to generate employment, projection of the activity and, in short, viability of the project.
8. Payment of residence and work fees: from the moment of validation of the application process, to be paid in a period of 10 working days:
- Form 790 code 052, section 2.1 for the initial temporary residence authorisation. It costs around 10’50 euros.
- Form 790 Code 062, filling in section 1.5 in reference to “self-employed work authorisations”: 195.88 euros.
9. Accreditation demonstrating the nullity of criminal records in the countries of residence of the last five years, issued by institutional bodies of these territories.
10. Medical certificate.
11. Proof of having paid the 60 euro visa fee.
Choosing a legal structure for your business in Spain
The rules and considerations around starting a business in Spain vary depending on the scope of your plans. The main types of business legal structure are as follows.
Individual entrepreneur (self-employed): one partner.
A self employed worker is person who habitually, personally, directly, on his own account and outside the scope of the management and organisation of another person, carries out an economic or professional activity on a lucrative basis.
They may or may not be employed by others. Its taxation is mainly regulated through the IRPF (Personal Income Tax).
- Initial capital: none required.
- Responsibility: the sole partner is responsible with all his goods. If the businessman is married, the responsibility derived from his activity could reach his spouse, reason why to know the situation it is necessary to take into account the economic regime that governs the union and the own nature of the goods.
It is one of the novelties of the Law of Entrepreneurs and the cheapest way of setting up a business in Spain. It would be the natural person who, with limitation of responsibility under certain conditions, carries out a lucrative economic or professional activity in a habitual, personal, direct, self-employed manner, with or without employees under his or her charge.
- Initial capital: not required.
- Responsibility: this formula allows self-employed professionals not to have to respond with their personal assets to possible debts generated by their activity, for example, with their habitual residence. However, in practice this restriction is subject to several conditions that must be known, such as, for example, that the value of the home does not exceed 300,000 euros. Undoubtedly, the achievement of the objective for which it was created can be improved.
Limited Liability Company (SRL or SL): minimum one partner
Widely used in Spain. It is the most popular type of commercial society, because it avoids responding with personal patrimony. It divides its share capital into shares, which are indivisible and cumulative. In this way, it is integrated by the contributions of all the partners.
Initial capital: minimum 3,000 €.
Liability: limited to the capital contributed.
If you are overwhelmed by all the paperwork on the way to create your own company, do not worry. You can always count on the help of a business advisor who will provide you with quick solutions and can guide you in your adaptation process as an entrepreneur. Contact us for a free consultation!
Foreign companies opening up a branch or subsidiary in Spain
If you have your own company in your country of residence, but are looking to set up a branch or subsidiary in Spain, you will have to follow a different process.
When processing your application, you must provide a series of documents, including the following:
- A copy of the main company’s certificate of incorporation and certificate of good standing
- Notarized power of attorney
- Spanish tax identification number (NIE)
- A member of staff at the Spanish branch to be a resident in Spain, who will agree to be liable for any company debts and tax payments
- While additional branches and subsidiaries don’t need to file accounts on the business register, they must pay income tax and submit quarterly VAT returns through their NIE number.
Some banks and business advisory companies will offer special packages to help you set up the particulars of opening a new branch in Spain.
Recommended: If you are investing in a business in Spain you might be elegible for a Golden Visa. This type of visa grants you permission to reside in Spain after making a substantial investment.