Business in Spanish and Beginning a Business in Spain
Business in Spanish
Opening a new business in a foreign country can be a frightening prospect. However, understanding the key regulations and implications of opening a business can give you a leg up and increase your chances of success.
This comprehensive guide will teach you everything you need to know about starting a business in Spain. It includes business culture, business types, and the most crucial insurance and taxation considerations.
Also read: Best Personal Injury Attorney Chicago Langdonemison.Com
Spain’s Business Culture
The business culture in Spain may differ significantly from that in your home country. A more relaxed attitude, for example, can result in missed deadlines and meetings lasting late into the evening. However, Spain’s perception of old-fashioned or twee business culture is not entirely correct.
Siestas, for example, no longer exist in Spanish business, though long lunches do. Furthermore, some companies are abandoning an antiquated hierarchical decision-making culture. The Spanish government is also pushing ahead with a decree to close a 14% pay gap between men and women.
In Spain, who can Start a Business?
Starting a business in Spain does not always have to be a difficult task. However, depending on the company you are establishing, the process may be bureaucratic and time-consuming.
E.U. citizens who want to set up as sole traders or partnerships can do so relatively quickly. On the other hand, ex-pats from outside the E.U. will need a work permit to move to Spain and establish a business.
Forming a limited company can be time-consuming and costly with many different business structures. It is primarily due to the Spanish government imposing minimum financial requirements on those wishing to incorporate in Spain.
Also read: 10 Steps to Start Your Business
In Spain, Legal Structures for Businesses
Depending on the scope of your plans, the rules and considerations for starting a business in Spain differ. The following are the various types of business structures.
Self-Employed individuals in Spain
Autonomous are self-employed workers in Spain who must register their business with the Spanish tax authority and the Spanish social security department.
In Spain, Sole Traders, and Partnerships
Forming an unincorporated company is the cheapest way to start a business in Spain. You can do this as a sole proprietor (Empresa individual) or as part of a partnership (Sociedad civil). There are no minimum investment requirements with these arrangements, and you won’t have to go through many formalities required when forming a limited company.
You will be responsible for your tax return as a business owner. There is no legal distinction between your personal and business assets. As a result, if your company incurs debt, you are personally liable.
Limited liability companies in Spain
In Spain, there are several types of limited company structures. The Sociedad Limitada, or S.L., is the most common type. Although incorporation protects the owner from personal liability in the event of bankruptcy, it does impose several additional taxes, accounting, and mercantile obligations.
An SL is required to file an annual Spanish corporation tax return and statutory accounts. The owner is required to file their VAT returns (IVA), as well as several other periodic declarations.
Also read: What Is B2B Website Service, And How Does It Work
How to Start a Business as an Expat in Spain
There is a specific procedure for establishing a limited company in Spain. We will go into more detail later, but the process is as follows:
- Check that you have a foreign tax identification number (NIE)
- Mercantile Registry: Register the company name (Registro Mercantil Central or RMC)
- Obtain a tax identification number for your business (CIF)
- Establish a business bank account.
- Sign the incorporation agreement.
- Create the company.
- Sign up for social security.
How to Apply for a Business Visa in Spain
Non-EU citizens relocating to Spain to start a business will require a valid work permit. You must apply at the Spanish embassy in your home country to obtain a work permit.
First and foremost, you must demonstrate that you have sufficient capital to invest in your business and support yourself while living in Spain. A business plan and proof of your skills and experience may also be required. The Spanish government may request evidence demonstrating how your company could create jobs in Spain.
Work permits must remain renewed annually, but you can apply for residency in Spain after five years. It eliminates the need for a work permit in the future.
Permits and Licences
All resident and non-resident foreigners with financial affairs in Spain must have a foreigner’s tax identification number before establishing a business in Spain (NIE).
The NIE remains required for all financial transactions in Spain, such as company incorporation. If you are a Spanish national, you will have an NIF number rather than an NIE number. Foreign citizens can apply for an NIE at a national Spanish police station processing office.
Also read: The Importance of Technology in Business 2022
Registering your company in Spain
The first step in forming a limited company is to obtain a certificate confirming that the company name you wish to use is not already in use. A no-name coincidence certificate is available from The Mercantile Registry (RMC). You can do this on your own by using the RMC website. This step takes about three days before you receive the RMC’s response via courier.
Establishing a Business Bank account in Spain
After obtaining a tax code and a certificate of a no-name coincidence for a limited company, you must open a business account with a Spanish bank and deposit €3,000. It is the minimum share capital required to form a limited company.
A bank certificate demonstrating the act of incorporation of the company can be obtained as proof of payment and must remain presented to a notary or lawyer. Find out how to open a bank account in Spain if you don’t already have one.
Also read: Online CRM system: Best Small Business Online System Software in 2022
Review Business in Spanish and Beginning a Business in Spain.