The report Doing Business 2014, published by The World Bank put Spain at rank 142 in the ease of starting a business, with an average of 23 days for the time to create a company (a very long time if we compare with other EU economies).
Nevertheless this shouldn’t discourage anyone from running a business in Spain as once the business is started, Spain gets back within the average of EU in terms of how easy it is to run a business once it is started.
Emprende en 3 is an initiative that was started in January 2014 whose objective is to shorten the time needed to start a business in Spain to 3 days. The list of town halls enrolled in the program can be found at ssweb.seap.minhap.es/ee3/main/adheridas The list is continuously growing. Additional info can be found at http://portal.circe.es/ and http://www.eugo.es/
The intricacies of Spanish bureaucracy can get a bit complex as depending on the type of activity the process of starting a business can be different, also regional administrations and town halls can add additional requirements. The best way to get started is to get help from an accountant or a lawyer. Alternatively you can contact local business association or the local chamber of commerce. It goes without saying that unless your level of Spanish is reasonably good you should always seek help from people you can communicate with fluently without risks of misunderstandings.
Even though it can take time to obtain licenses and permits, resist the temptation to start without them, as fines from Spanish public administrations can be harsh.
Different flavors of companies
The “ley de emprededores” that was launched last year increased the different types of companies that can be created in Spain. For a small enterprise the choice will most of the time between creating a limited company and being self-employed.
Starting a Business as a self-employed person
Being self-employed is probably the easiest way to start a company as there is no minimal legal capital and the activities can start almost immediately. Nevertheless the self-employed person has unlimited responsibility with his assets for any debts that he may have with any third party. In order to start there will be few initial steps:
Registration with the registry of Entrepreneurs at the Tax Office (Censo de Empresarios nin Spanish).
- Registration with the General Treasury of Social Security (also to get a Social Security number if you don’t have one already) as a self-employed worker
- Depending on the type of activity there will be other steps like:
- Notice of opening of the workplace in the Ministry of Employment of the region.
- Application of relevant licenses depending on the type of activity of the company
- Obtain and legalize the visits book at the Provincial Employment office.
- Work contracts, for employees if you have any
- Registration of the company in the territorial Treasury of Social Security, the employer assigns a number for identification and control of its obligations a Code Contribution Account.
Your accountant can process most of these procedures online if you get a digital certificate that will enable to digitally “sign” the forms online. It is very easy to obtain the certificate by asking it in person at the town hall with a valid ID and your NIE document.
If you don’t have employees, you will have to pay a minimum, monthly, social-security fee of 261.83€. If it is the first time that you are self-employed you might benefit of the tarifa plana for the first 6 months i.e. 53.07€ per month. The taxation will be relative to the income tax for persons.
Starting a limited company
The main advantage of limited liability companies is that shareholders are liable for the debts and obligations of the corporation only up to the capital share they hold. The initial steps are:
Register the name of the company
You will need to start a procedure with the Central Spanish Commercial Registry and submit 3 possible names for your company. If one of the names has not been taken by another company, the registry will issue a certificate that will be valid for 6 months (3 months for notarial use) stating the name of the new company. More information can be found at http://www.rmc.es/DenominacionesSociales.aspx
1) Open a bank account in the company name
The minimal capital that has to be invested is 3.005,06 €. You will need a certificate from the bank showing the investment of the money and its origin. You will need the certificate later.
2) Article of association
You will have to sign in front of a Spanish notary the articles of association of the company. It must contain information such as the name of the company, object and activity, commencing date, capital share, shareholders names and details, business address, designation of the director of the company and the powers of the same, and list of limitations for the transfer shares to third parties. You should ask a lawyer to draft the document, as it can be rather complex.
3) Stamp duty
The formation of a limited company is now exempt of stamp duty. Nevertheless you will still have to present a form 600 from you regional administration.
4) Tax Office
At the tax office you will have to apply for:
- The company C.I.F (tax identification code) at the tax office
- The registration with the tax system for which the company will be liable.
- Registration in the VAT.
5) Inscription of the company in the commercial registry
You will have 2 months after the signing of the article of association to inscribe the company in the provincial commercial registry where the company is domiciled.
6) Get the final NIF of the company
Once all this steps are completed you will get the official paper with the company registration number from the tax office
The director of the company will have to be inscribed in the social security system either as employee or self-employed. You will also need additional permits and registration depending on the type of business or if the company has employees.