Why Open a Business in Spain?
Spain is one of the most attractive destinations in Europe for foreign entrepreneurs thanks to:
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📍 Strategic location within the EU and proximity to Africa
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🌞 High quality of life and work-life balance
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💶 Access to EU funding and investor incentives
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👨💼 Skilled workforce and established infrastructure
Foreign investors can open a business in nearly any sector—from tech to tourism to agriculture.
🏢 Legal Business Structures in Spain
Choosing the right business form is the first step. Common options include:
1. Sociedad Limitada (SL) – Limited Liability Company
✅ Best for small and medium businesses
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Minimum capital: €3,000
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Fast setup and low maintenance
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Limited liability for shareholders
2. Sociedad Anónima (SA) – Public Limited Company
✅ Ideal for large-scale or investor-backed companies
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Minimum capital: €60,000
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More complex governance and reporting
3. Autónomo – Sole Proprietor
✅ Suitable for freelancers or small-scale entrepreneurs
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No capital requirement
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Full personal liability
4. Branch or Subsidiary
✅ For foreign parent companies entering the Spanish market
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Branch: Not legally separate from the parent
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Subsidiary: Independent legal entity (usually SL or SA)
📋 Step-by-Step Process to Open a Business in Spain
✅ Step 1: Obtain a NIE (Número de Identificación de Extranjero)
Required for all foreign founders. Apply through a Spanish consulate or in Spain.
✅ Step 2: Reserve a Company Name
Register the name with the Mercantile Registry (Registro Mercantil Central).
✅ Step 3: Open a Business Bank Account
Deposit the required share capital and obtain a bank certificate.
✅ Step 4: Sign Public Deed Before a Notary
Includes articles of association, founding shareholders, and company purpose.
✅ Step 5: Register with the Commercial Registry
Official registration makes the company legally operational.
✅ Step 6: Obtain a NIF (Tax ID) from AEAT
Necessary for tax filings and invoices.
✅ Step 7: Register for Social Security
If hiring employees or operating as an autónomo.
⚖️ Legal Considerations & Compliance
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📑 Corporate Bylaws: Must be legally compliant and reflect business operations.
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📚 Accounting: Spanish companies must maintain accurate books and file annual accounts.
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🧾 Tax Registration: Includes VAT (IVA), corporate tax, and payroll tax (if applicable).
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🧑💼 Employment Contracts: Must comply with Spanish labor laws.
Failing to comply with corporate or tax obligations can lead to penalties or closure.
💶 Taxation for Businesses in Spain
| Tax Type | Rate |
|---|---|
| Corporate Tax (IS) | 25% standard |
| VAT (IVA) | 21% standard |
| Dividend Withholding | 19% (may vary) |
| Social Security (employer) | Approx. 30% |
🔍 Tax incentives exist for startups, R&D investment, and small businesses.
🌍 Foreign Investment Rules
Spain welcomes foreign direct investment:
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💼 No restrictions in most sectors
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🔁 Capital movement within the EU is free
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📤 Non-EU investors must declare certain investments to the Ministry of Economy
Some regulated sectors (banking, defense, energy) require prior authorization.
💬 Example: UK Entrepreneur Opening a Marketing Agency in Madrid
Case: A UK national launched a digital marketing agency (SL) in Madrid.
Steps Taken: NIE, capital deposit, company deed, registry filing, tax registration.
Result: Fully operational in 4 weeks with active client contracts and compliance support from Borderless Lawyers.
🤝 How Borderless Lawyers Can Help
We offer complete legal support for foreign entrepreneurs:
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📝 Company formation and registration
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🧾 Tax and accounting setup
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🧑⚖️ Drafting bylaws and employment contracts
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📈 Sector-specific business planning
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🌐 Multilingual support in Spanish and English
📞 Start Your Spanish Business the Right Way
If you’re planning to open a business in Spain, expert legal guidance is essential to avoid costly mistakes.
Contact Borderless Lawyers to launch confidently with full compliance.