How to open a company in spain

Step-by-step process to open a company in Spain

Spain is home to over 3.4 million active businesses, making it one of the most vibrant economies in Europe. In 2022 alone, more than 95,000 new companies were registered nationwide, highlighting its appeal to entrepreneurs worldwide. With a strategic location, a strong tourism sector, and a skilled workforce, Spain offers immense opportunities for those looking to establish a business. However, navigating the legal and administrative processes can be challenging. This blog post will teach us how to open a company in Spain.

Choose the right legal structure

Selecting the appropriate legal structure is the foundation for establishing a company in Spain. The legal structure determines your liability, tax obligations, and administrative requirements. Common business structures in Spain include:

• Sole Proprietorship (Autónomo)
  This is ideal for individuals looking to start small-scale businesses. It involves lower registration costs and simpler processes, but the owner is personally liable for business debts.
• Limited Liability Company (Sociedad de Responsabilidad Limitada – S.L.)
  Popular among small and medium-sized enterprises, an S.L. limits personal liability to the capital invested. The minimum share capital required is €3,000.
• Public Limited Company (Sociedad Anónima – S.A.)
  Suitable for larger businesses, an S.A. requires a minimum share capital of €60,000 and allows shares to be publicly traded.
• Branch Office or Subsidiary
  Foreign companies often establish a branch or subsidiary to expand their operations in Spain.

When deciding on a legal structure, consider the scale of your business, potential risks, and long-term goals. Consult with legal advisors to ensure compliance with Spanish laws.

Obtain a NIE number

The Número de Identificación de Extranjero (NIE) is a unique identification number required for all foreigners conducting economic activities in Spain. This number is necessary for tax purposes, opening bank accounts, and company registration.

Steps to obtain a NIE

Apply at the police station

To begin obtaining a NIE (Número de Identificación de Extranjero), you must visit a local police station in Spain or a Spanish consulate if you are abroad. This identification number is essential for any legal and economic activities in Spain, including business opening. Before visiting, it’s advisable to schedule an appointment, as many offices operate on an appointment-only basis.

Submit required documents

During your visit, you must provide specific documents to support your application. These typically include:

• A completed and signed application form (Form EX-15).
• A valid passport along with photocopies of the identification pages.
• Proof of your reason for requesting the NIE, such as documentation related to your business activity (e.g., company registration documents, employment contracts, or property deeds).

Ensure all documents are prepared and, if necessary, translated into Spanish by a certified translator.

Pay the fee

Once your application is submitted, you must pay a processing fee. The cost generally ranges from €10 to €15, depending on the location. Payment is often made at a designated bank using a specific form provided during application. Be sure to retain the payment receipt as proof.

Wait for approval

After submitting your application and paying the fee, the final step is to wait for your NIE to be issued. The processing time varies significantly depending on the office handling your request. In some cases, you may receive the NIE within a few days; in others, it could take several weeks. It’s important to inquire about the expected timeline during your appointment to plan accordingly.

Register the company name

A unique company name is essential to avoid conflicts and ensure compliance with Spanish regulations. This step involves submitting your proposed name to the Central Mercantile Registry (Registro Mercantil Central).

Steps to register the company name

Choose multiple names

When registering a company name in Spain, proposing several potential names is essential. This increases the likelihood of approval, as the Central Mercantile Registry (Registro Mercantil Central) will only approve unique names not already in use. Ensure the names align with Spanish naming regulations and avoid generic or misleading terms.

Submit an application

Once you’ve decided on potential names, complete the application form for name registration. This form requires you to list your proposed names in order of preference. You can apply online via the Central Mercantile Registry’s website or in person at their office. Make sure to provide accurate contact details, as these will be used for communication regarding your application.

Pay the registration fee

After applying, you must pay a registration fee, typically between €13 and €20. The payment method depends on the submission method, with online submissions often allowing credit card payments and in-person applications requiring cash or bank transfers. Keep the payment receipt as proof, which may be needed for follow-up inquiries.

Receive the certificate

If your chosen name is approved, you will receive a certificate confirming its availability. This certificate is valid for six months and ensures that no other business can register the same name during this period. It is crucial for further steps, such as opening a bank account or signing the public deed of incorporation.

Importance of early registration

Securing a company name early in the process is vital. The certificate confirming your name’s availability is mandatory for other registration processes, such as drafting the articles of association or registering with the Commercial Registry. Delaying this step could lead to complications or missed deadlines in your business setup process.

Open a business bank account

Opening a business bank account in Spain is a legal and practical necessity. It is the repository for the company’s initial capital and facilitates financial transactions.

Choose a bank

The first step in opening a business bank account in Spain is selecting a bank that meets your company’s financial needs. Consider account fees, online banking features, and international transaction capabilities. Popular options include Santander, BBVA, and CaixaBank, all of which offer tailored business accounts for entrepreneurs. Comparing banking packages will help you choose the one that aligns with your business goals.

Provide documentation

Once you’ve chosen a bank, gather the required documentation to initiate the account opening process. Typically, you will need:

• A valid NIE (Número de Identificación de Extranjero) for all stakeholders.
• The certificate confirming your company name registration.
• Identification documents, such as passports, for all business owners and shareholders.
• Additional documents specific to the type of business structure, such as articles of association for an S.L. or S.A.

Submitting complete and accurate documentation will ensure the process moves smoothly without delays.

Deposit initial share capital

For companies such as a Limited Liability Company (S.L.) or Public Limited Company (S.A.), depositing the initial share capital is a legal requirement.

• For an S.L., a minimum of €3,000 must be deposited.
• For an S.A., the minimum required is €60,000.

The deposit must be made directly into the business account, and the funds will remain blocked until the incorporation process is complete. Ensure the funds are readily available to avoid unnecessary complications.

Obtain a bank certificate

After depositing the initial share capital, request a bank certificate to prove the transaction. This certificate is a mandatory document required for subsequent steps, such as signing the public deed of incorporation and registering the company with the Commercial Registry. The certificate confirms that your business meets the legal capital requirements for its chosen structure.

Opening a business bank account is critical in establishing a company in Spain, as it facilitates financial transactions and ensures compliance with legal obligations.

Draft the articles of association

The articles of association outline the internal governance of your company. This document serves as the constitution for your business and must comply with Spanish commercial laws.

Key components of the articles of association

Business objectives

Clearly state the purpose and scope of your business operations. This section must detail the nature of the company’s activities. For example, if the business is in technology, specify whether it focuses on software development, hardware manufacturing, or consultancy services.

Shareholder details

Include the names, roles, and ownership percentages of all shareholders. This section should also specify voting rights and other privileges tied to share ownership.

Governance structure

Outline the decision-making processes and define the responsibilities of directors and managers. Include provisions for appointing or removing directors, board meeting protocols, and conflict resolution mechanisms.

Profit distribution

Specify how profits will be distributed among shareholders. State the percentage allocated for reinvestment in the business, dividends, or reserve funds.

Sign the public deed of incorporation

Once the articles of association are ready, the next step is to formalise the company through a public deed. This involves a legal process overseen by a Spanish notary.

Steps to sign the public deed

Present required documents

Gather and present all necessary documents, including the NIE, bank certificate, company name certificate, and articles of association.

Attend the notary appointment

All shareholders or their authorised legal representatives must attend the notary appointment. The notary will review the documents, confirm their validity, and meet all legal requirements.

Sign the deed

The notary will prepare the public deed of incorporation, which all shareholders must sign. This deed is the official record of the company’s creation and is required for further steps like registration with the Commercial Registry.

The public deed serves as the official record of the company’s creation, enabling further registration steps.

Register with the commercial registry

After signing the public deed, the company must be registered with the local Commercial Registry (Registro Mercantil). This step ensures that your business is legally recognised in Spain.

Steps for registration

Submit the public deed

Provide the notarised public deed and supporting documents to the Commercial Registry.

Pay the fees

Registration fees typically range from €100 to €300, depending on the location and type of business.

Obtain the registration certificate

Once the registration is complete, you will receive a certificate confirming your company’s legal status. This certificate is essential for signing contracts or applying for licences.

This step is crucial for conducting business activities and entering into contracts in Spain.

Obtain a tax identification code (CIF)

The CIF (Código de Identificación Fiscal) is a unique tax identification number for businesses in Spain. It is essential for fulfilling tax obligations and issuing invoices.

Steps to obtain a CIF

Visit the Agencia Tributaria (Tax Agency)

To obtain a CIF (Código de Identificación Fiscal), you must register your business with the Spanish Tax Agency (Agencia Tributaria). This can be done online through their official website or in person at a local tax office. If you are applying in person, ensure an appointment, as most offices require prior scheduling. Online applications are more convenient but may require electronic identification tools like a digital certificate.

Submit Form 036

Form 036, also known as the census declaration form, is the key document for CIF application. This form collects essential information about your business, including:

• The type of legal entity (e.g., S.L., S.A.).
• The primary business activity.
• Tax responsibilities and obligations.

Complete the form accurately and ensure all details align with your company’s public deed and other official documents. Errors or omissions could delay the process.

Provide necessary documentation

Along with Form 036, you will need to submit several supporting documents:

• The notarised public deed of incorporation.
• A copy of your NIE (Número de Identificación de Extranjero).
• Proof of company registration from the Commercial Registry.
• Identification documents for all company directors and shareholders.

Ensure that all documents are up-to-date and, if required, translated into Spanish by a certified translator.

Receive provisional CIF

After submitting the application and required documents, you will be issued a provisional CIF. This temporary number allows you to begin operations while your application is reviewed. The provisional CIF will later be replaced with a permanent CIF once the registration process is fully completed. For your records, retain all communication and receipts related to the application.

A CIF allows the company to operate legally and fulfil all tax-related requirements.

Register for social security

Registering with the Spanish Social Security system is mandatory for companies and their employees. This step ensures compliance with labour laws and provides access to social benefits.

Register the company

Registering your company with the Spanish Social Security system is mandatory for compliance with labour laws. This involves submitting the public deed of incorporation, the CIF, and other relevant documents to the local Social Security office. This step ensures that your business is recognised as an employer and can contribute to employees.

Obtain a social security number

Your business will be assigned a unique social security number identifier for all social security-related activities. This number is essential for registering employees and making contributions.

Register employees

Once your company is registered, all employees, including directors, must be enrolled in the Social Security system. Provide each employee’s NIEs and personal details to the Social Security office. This step is crucial to ensure employees are covered for healthcare and pensions.

Begin contributions

Calculate social security contributions based on the salaries of your employees. Contributions include a percentage paid by the employer and a smaller portion deducted from the employee’s salary. Regular and timely payment of these contributions is necessary to avoid legal penalties.

Social security registration is critical for hiring staff and avoiding legal penalties.

Obtain licenses and permits

Depending on your business activity, you may need specific licences and permits to operate legally in Spain. These requirements vary by industry and region.

Common licences and permits

Operating licence

An operating licence is required for businesses with physical premises, such as shops, offices, or factories. This permit confirms that your premises meet local zoning and safety regulations.

Environmental permits

Environmental permits, such as manufacturing or waste disposal, are necessary for businesses that could impact the environment. These permits ensure compliance with national and regional environmental laws.

Health and safety permits

Health and safety permits are mandatory for food, healthcare, and construction sectors. These permits ensure your business meets hygiene and safety standards to protect public health and employees.

Special activity permits

Certain industries, such as tourism, transportation, and telecommunications, require special permits regulated by local authorities. These permits address specific operational requirements unique to the industry.

Steps to obtain licences

Research local requirements

Contact the local council (Ayuntamiento) to understand the specific permits and licences your business requires. Regulations vary by region and industry, so thorough research is essential.

Submit applications

Prepare and submit detailed documentation, such as business plans, technical reports, and proof of compliance with existing regulations. Ensure all submissions are accurate to avoid delays.

Pay applicable fees

Licence and permit fees vary depending on the type and location. Budget appropriately and keep receipts for all payments.

Undergo inspections

Authorities may conduct inspections to verify compliance with safety, zoning, and environmental standards. Address any issues promptly to ensure approval.

Acquiring the necessary licences ensures your business operates within the legal framework of your chosen industry.

Additional considerations

Opening a company in Spain requires attention to several other factors that ensure smooth operations and legal compliance:

Hiring local professionals

Engaging lawyers, accountants, and consultants with expertise in Spanish business laws can significantly simplify the process. These professionals can ensure compliance and help navigate complex legal requirements.

Understanding costs

Factor in all costs associated with starting and maintaining your business, including notary fees, registration charges, licence fees, and operational expenses. A comprehensive budget will help you manage expenses effectively.

Post-establishment obligations

Once your business is established, regular bookkeeping, tax filings, and compliance with labour laws are essential. Failing to meet these obligations can result in fines and penalties, so ensure that administrative tasks are managed efficiently.

With these considerations in mind, entrepreneurs can effectively navigate the complexities of setting up a business in Spain.

Timeline for steps to open a company in Spain

Costs for steps to open a company in Spain

FAQs

Can you open a business in Spain as a foreigner?

Yes, foreigners can open a business in Spain. They need a NIE (Número de Identificación de Extranjero) to handle legal and tax matters. The process includes registering the company name, opening a bank account, and complying with local regulations. It is advisable to consult legal professionals for smoother navigation of requirements. Spain welcomes foreign investors, particularly in key sectors like tourism and technology.

How much does it cost to set up a company in Spain?

The cost to set up a company in Spain varies depending on the business structure. A Limited Liability Company (S.L.) requires a minimum share capital of €3,000. Additional costs include registration fees (€100–€300), notary fees (€500–€1,000), and legal or consultancy services. Licences and permits may also incur costs, depending on the business activity and location.

Is Spain a good country to start a business?

Spain is an excellent country to start a business due to its strong economy, strategic location, and access to the European market. It offers a skilled workforce, a stable legal framework, and opportunities in tourism, renewable energy, and tech innovation sectors. However, navigating bureaucratic processes can be challenging, so professional assistance is recommended.

How much tax do companies pay in Spain?

The corporate tax rate in Spain is generally 25%. Newly established companies may benefit from a reduced rate of 15% for the first two years of profits. Businesses are also subject to value-added tax (VAT) of 21% and other sector-specific taxes. Accurate tax compliance is essential to avoid penalties and ensure smooth operations.

Who has the lowest tax rate in Europe?

As of 2025, countries like Ireland and Hungary are known for low corporate tax rates. Ireland has a corporate tax rate of 12.5%, attracting many multinational companies. Hungary offers a flat corporate tax rate of 9%, making it the lowest in Europe. Spain’s corporate tax rate of 25% is competitive but higher than those of these countries.