Starting a business in Spain as a foreigner is a great idea. Not only will you have access to the European and Latin American markets, but you’ll also be able to enjoy the country’s laid-back lifestyle and warm Mediterranean climate while you get set up.
If you’re thinking of expanding your existing company in Spain or starting a new life with your family abroad, understanding the options and process of establishing your business will help you succeed.
Ease of Doing Business
According to the 2018 World Bank Ease of Doing Business Survey, Spain is ranked 28th out of 190 countries for the ease of doing business. This means that it’s easier to trade in Spain than in many neighbouring countries.
Entrepreneurial Culture
Madrid, Barcelona, and Valencia are hubs for start-ups and are very friendly to entrepreneurs. The relationship-oriented culture is also perfect for creating social and business connections, which is essential for anyone starting a new company.
Infrastructure
While Spain has a bit of a reputation for having become modernised later than its neighbours, this country today has excellent logistics and infrastructure, making it easier than ever to run a successful business.
Languages
Spoken in Spain
While Castilian Spanish is spoken by 98% of the population, there are other co-official languages spoken in the country’s autonomous communities. In Barcelona, the co-official language is Catalan. In Valencia, the co-official language is Valencian (a variety of Catalan).
If you already speak Castilian Spanish, you should have no trouble getting around in any of the country’s major cities. Over time, learning and incorporating the local language(s) will help you expand your customer base.
Business Culture in Spain
Business culture in Spain is far more laid-back than business culture in countries like Germany. While Spanish businesses no longer stop for siesta, long lunch breaks are common, and shops typically stay open until late.
If you’re used to everything happening on time, you might need to adjust your expectations when starting a business in Spain as a foreigner. Meetings often run late into the evening, and what doesn’t get done today gets left for mañana.
FAQs
1. What are the legal requirements for foreigners to start a business in Spain?
Foreigners need to obtain an NIE (Número de Identificación de Extranjero) and register with Spanish tax authorities. Depending on the business type, other licenses and registrations may also be required.
2. Can I start a business in Spain without being a resident?
Yes, non-residents can start a business in Spain. However, they must have an NIE and may need a Spanish address for tax purposes.
3. What types of businesses can foreigners start in Spain?
Foreigners can start various business types, including sole proprietorships, limited liability companies (SL), and public limited companies (SA). Each type has specific registration processes and tax obligations.
4. Are there special benefits or incentives for foreign entrepreneurs in Spain?
Yes, Spain offers incentives for foreign entrepreneurs, especially for innovative startups. Programs such as the Entrepreneur Visa and the Startup Act aim to attract foreign investment and talent.
5. How long does it take to register a business in Spain?
The process can vary depending on the business structure and local requirements but typically takes between two weeks and two months.
6. Do I need a Spanish bank account to start a business in Spain?
Yes, most businesses in Spain require a local bank account for business transactions, tax purposes, and initial capital deposits for certain business structures.
7. What are the tax obligations for foreign business owners in Spain?
Foreign business owners must comply with Spanish tax laws, which include VAT, corporate tax, and social security contributions for employees. Specific tax rates depend on the business structure and income.
8. Is it necessary to hire a legal advisor or accountant for starting a business in Spain?
Although not mandatory, hiring a legal advisor or accountant is highly recommended. Spanish business law can be complex, and professional guidance can help navigate legal and tax obligations.
9. Can I operate my Spanish business in other EU countries?
Yes, once registered in Spain, a business can operate across the EU under certain conditions, taking advantage of the EU’s free trade area.
10. What documents are required to start a business in Spain as a foreigner?
Key documents include your NIE, proof of address, a business plan, and specific registrations, depending on the business structure.