How To Register a Company in Spain.

Register a Company in Spain

Spain is the world’s largest producer of olive oil and the world’s third-largest producers of wine. The country is also one of the largest producers of oranges and strawberries. Spain’s main crop production includes wheat, sugar beets, tomatoes, citrus fruits and grapes.

The economy of Spain is a highly developed social market economy, being the world’s sixteenth-largest economy by nominal Gross Domestic Product and the sixth-largest in Europe. This places Spain in the top three list of excellent countries to establish a business in Europe.

The Spanish territory is an ideal land for foreigners to start up a company. In fact, ideal infrastructures, and entrepreneurship ecosystem makes cities like Madrid or Barcelona a great place to set up your company.

However, before you can register a company in Spain as a foreigner, you will need to be a legal resident of Spain. But if you are a resident of any country under the European Union, then the procedures for opening a company will be straightforward. All you have to open is your NIE and your European union registry certificate.

Nevertheless, for a non-European Union citizen, you will need to get your working visa in order to start a company in Spain. There are two types of work permits that can allow you to start a company. They are the entrepreneurs visa and the work permit as a self-employed individual. This permit grants you residency that allows you to start a company in Spain.

The Entrepreneurs visa is paramount when you have a business idea that is innovative and technology is at its core of operations. However, the requirements are much more strict and not all business ideas will be valid for residency. The application processes are much faster and responses are gotten just after 20-30 days.

Nevertheless, it is crucial that you understand the requirements before starting and you will need to pitch a very good business idea to prove that you have enough skill and adequate funds to ensure company growth.

The self-employed visa is paramount for businesses like a cafeteria or a local supermarket. The self-employed visa is considered as a regular work permit. Nevertheless, even if the project you are considering to open does not necessarily have to be technological, not every business will be granted the self-employed visa.

So choosing the right business to start goes a long way in helping you get a work permit.

Before starting the process of starting a company, you should first decide on the legal structure. There are many company structures in Spain but we’ll focus on two

Sole trader.

This is probably the best option for small companies as it does not require any initial investment. The only disadvantage is that there is no distinction between the company assets and your personal assets. Hence you are fully liable for any loss or debts the company has.

This type of company structure is for freelancing businesses. In terms of tax, you pay income tax which implies that you will be annually in charge of your tax returns.

Limited liability company.

This is the most popular firm structure in Spain. This is because of its flexibility and easy registration process with a minimum investment of €3.000. Its advantages is that your liability is limited to the capital your investment made.

Now that we have known your company structure and the use of a work permit, we can look into the steps of registering your company.

Are you an entrepreneur looking to start a company in Spain. Here are ways for how to register a company in Spain.

This is basically an identification number assigned to foreigners to help with easy identification once they enter Spain. NIE means Identity Number of the  Foreigner. This number doesn’t change and it remains valid until you get your Spanish nationality. But it does not allow you to legally reside in Spain.

The reason for obtaining an NIE is that it allows you to open a bank account, buy a car, pay taxes in the country and so much more.

Getting your NIE number is very simple depending on if you are a European Union citizen or not. It takes 3 to 5 working days for an European Union citizen to obtain their NIE number. The time period for non-European Union citizens usually varies depending on the immigration office.

Once the NIE number has been obtained, you will then need to obtain a Certificate of Uniqueness. This certificate proves that your company name is allowed to be used and is now under your possession.

To get the Certificate of uniqueness, you will need to provide 3 different names you would like to use for your company. The names are sent to the Corporate Register of Spain in order to check their availability.

If the names are available, one of them is acceptable depending on your preferences. This procedure can take up to 48 hours. This will be the official name of your company which will appear on your invoices and other documents.

Now that you already have your NIE number, you can easily open a bank account in Spain. You are required to deposit the minimum investment into this account. The money deposited won’t be lost and will be used for the firm’s daily operations.

Once the payment is made into the new account, a bank certificate that signifies payment is created. This document must be provided at the notary on the day of constitution day.

Now it’s time to. Decide how many and how the shareholders of the company will operate. Now, this is what you need to know when sorting for a shareholder.

-Corporate director. He/she doesn’t need a work permit and once a year the corporate director is required to sign the annual accounting of the company. According to the Spanish legislation law, having this type of director implies that you have one worker under your structure.

Once you have decided on this, you will need to create the shareholder agreement which defines each shareholder and the percentage they each have. As this is a very crucial step of the registration process, you are highly recommended to get a business lawyer.

You need to go along with the following documents – Identity Number of the Foreigner ({NIE number}, bank certificate and the certificate of uniqueness obtained from the Corporate Register of Spain) to the notary to sign the public deed of Incorporation.

This is where you will establish who the investor and the administrators are. You will also need to provide an address and also clearly define the activity of the company. Note that you will need to introduce all the activities relating to the company including future activities in case of business expansion.

Then the notary registers the company in the Company Register. This process takes up to 3 weeks. Nevertheless, you will be given a Value Added Tax number which you can use to start your business activities.

Now that the deed has been approved, you should go to the Spanish Tax Agency to register the deed and get it stamped and also get your final Tax Identification Number (CIF) for the company. Note that payment of tax starts as soon as you start your company activity.

-Getting your Tax identification number (CIF). This is needed for your company to be identified with the tax authorities. To get your tax ID code, you will need to download the corresponding application form on the tax agency’s website, fill out the form and get an appointment with your local agency to present the form and your NIE.

The Tax Identification Number (CIF) consists of 9 alphanumeric digits consisting of 1 letter and 8 digits.

Finally, the last step is to visit your local social security office to register your newly created business.

During your appointment, you will need to present the 036 forms, NIE, passport, and IRPF form.

Spain has a strong strategic location and deep trade partnerships, including access to the market of the Europe, Middle East and North Africa (EMEA) regions and also trade links to Latin America. This makes Spain an advantage when it comes to setting up a company.