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How to Start a Business in Spain: Legal Steps for Foreign Entrepreneurs

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How to Start a Business in Spain: Legal Steps for Foreign Entrepreneurs

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Starting a business in Spain is a promising opportunity for foreign entrepreneurs, but it involves navigating several legal steps and formalities. This guide will walk you through the essential legal requirements to launch your company successfully.

📋 Choosing the Right Business Structure

Before starting, you must decide on the appropriate legal form:

  • Sociedad Limitada (SL): Most common for small and medium enterprises, similar to a limited liability company. Requires minimum capital of €3,000.

  • Sociedad Anónima (SA): Suitable for large businesses or publicly traded companies. Requires minimum capital of €60,000.

  • Autónomo: Self-employed sole proprietorship, simpler but with unlimited liability.

  • Branch or Subsidiary: Foreign companies can open a branch or create a subsidiary in Spain. The subsidiary is a separate legal entity.

🏛️ Registration Process

  1. Obtain a Foreigner’s Identification Number (NIE): Necessary for all non-resident entrepreneurs.

  2. Name reservation: Request a unique company name certificate from the Central Mercantile Registry.

  3. Draft company bylaws and notarize the deed of incorporation: This formalizes the company’s existence.

  4. Register at the Commercial Registry: Makes your company official and public.

  5. Tax identification (CIF/NIF): Apply at the Tax Agency (Agencia Tributaria) for your company’s tax ID.

💼 Additional Legal Requirements

  • Register with Social Security for employees.

  • Obtain necessary licenses and permits depending on your business sector.

  • Ensure compliance with data protection laws (GDPR) if handling personal data.

  • Register for local business taxes (IAE) if applicable.

⏳ Timeline and Costs

  • Company formation usually takes 2 to 4 weeks.

  • Typical costs include notary fees, registry fees, and administrative expenses, ranging from €600 to €1,200.

🤝 How Borderless Lawyers Can Help

We assist foreign entrepreneurs by:

  • Advising on the optimal legal structure.

  • Preparing and notarizing all incorporation documents.

  • Handling registrations with commercial and tax authorities.

  • Advising on licenses, permits, and regulatory compliance.

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