Starting a business in Spain as a foreigner means getting the appropriate visa, an NIE number, choosing the right business structure, and registering with the tax office.
As a foreign national trying to start a business in Spain, there are specific requirements you must follow, depending on your nationality.
For example, EU, EEA, and Swiss citizens can quickly set up a business with fewer restrictions. However, non-EU nationals must first obtain a residence permit, have a business plan, provide proof of funds, and any other relevant documentation.
In this article, we will explore all you should know about starting a business in Spain as a foreigner, with emphasis on the requirements, documentation, and application steps.
We will also explore how immigration experts, such as Global Citizen Solutions (GCS), can help you obtain the right residence permit to start a business in Spain.
Starting a Business in Spain – Key Takeaways
Can foreign nationals start a business in Spain?
Yes, foreign nationals can start a business in Spain. The country is welcoming to global entrepreneurs looking to expand to the EU. Spain’s business environment and infrastructure also make it attractive for foreigners. However, the requirements needed to start a business in Spain depend on your nationality.
| Requirement | EU/EEA/Swiss nationals | Non-EU/EEA/Swiss nationals |
|---|---|---|
| Business ownership and formation | Can establish a business, subject to the identification, tax and registration requirements for the chosen legal form. | Can own or establish a business. Company formation does not automatically grant Spanish residence or permission to work. |
| Permission to work | Do not need a separate immigration work permit to undertake self-employment in Spain. | Must hold an immigration status that permits the intended work before personally carrying out that activity in Spain. Owning shares alone does not provide work authorization. |
| Residence requirements | If staying longer than three months, must register under the EU residence regime and meet the conditions, such as demonstrating self-employment. | Must obtain or hold the appropriate residence permission if relocating to Spain. The relevant route depends on the activity and existing status, such as self-employment or qualifying innovative entrepreneurship. |
| Residence documentation | Receive an EU citizen registration certificate containing their NIE. | May need a foreigner identity card (TIE), depending on the residence authorization and its duration. |
EU/EEA and Swiss nationals
EU/EEA and Swiss citizens can easily move to Spain, register, and start a business without needing a visa or residence permit thanks to the EU Freedom of Establishment rules. You would only need to obtain a Número de Identificación de Extranjero (NIE) number and an EU Registration Certificate if you stay in Spain for more than three months to manage your business.
Non-EU nationals and permission to work
Non-EU nationals who want to start a business in Spain must first obtain the appropriate visa or residence permit, such as a Self-Employed Visa, or an Entrepreneur Visa for Innovative Startups.
The Self-Employed Visa is a good option if your business is not technology-focused while the Entrepreneur Visa is great if you have a business idea that is focused on innovation and technology.
To apply for any of these visas, you will need to meet the requirements of each one, which may include having a detailed business plan and proof of funds. Other requirements may apply based on your specific route.
How to Choose a Legal Business Structure in Spain
As a foreigner starting a business in Spain, choosing the right legal structure that works for your business is one of the most important decisions you will make. This choice will affect your liability, financial obligations, and overall operations.
Autónomo versus Sociedad Limitada
Autónomo (Sole Trader) has the simplest and most straightforward registration process. It is ideal for freelancers and independent contractors who operate as individuals and are responsible for all associated debts and liabilities. This structure is easy to set up and does not involve a lot of paperwork.
On the other hand, Sociedad Limitada (SL – Limited Liability Company) is designed for small to medium-sized businesses. It requires a statutory minimum share capital of €1.
Until capital reaches €3,000, Law 18/2022 applies additional reserve and shareholder-liability safeguards. SL offers limited liability for shareholders and more investor credibility. However, this structure has higher setup costs and a more complex registration process compared to Autónomo.
Other company forms
There are also other legal business structures in Spain, such as:
- Sociedad Anónima (SA – Public Limited Company): Mostly used by large businesses and merges limited liability with investor credibility. An SA has €60,000 minimum capital, with at least 25% paid at incorporation.
- Sociedad Colectiva (Partnership): This is for businesses with two or more partners, and it allows shared responsibilities and joint personal liability.
Documents and Identifiers Needed to Start a Business in Spain as a Foreigner
The exact documents you will need to start a business in Spain depend on the legal structure of your business and your nationality.
Documents needed regardless of applicant’s nationality
- Valid passport or National ID: Proof of identity is required for all applicants.
- Proof of address: This can be a rental contract, utility bill, or certificate of registration with the local town hall (empadronamiento).
- Company name registration certificate with the Mercantile Registry Central (Registro Mercantil Central, RMC).
- Business bank account: To deposit the company’s share capital and manage financial operations.
- Deed of Incorporation (Escritura de Constitución): Signed before a notary public when forming a commercial company.
- Company Registration at the Local Mercantile Registry (Registro Mercantil): This finalizes the formation of a commercial company.
- Social Security registration: Mandatory for the business owner and any employees to access healthcare and social benefits.
- NIF (Número de Identificación Fiscal): This is the tax identification number for tax and invoicing purposes.
Additional document requirements for foreigners
- Business plan: This document should outline your business idea, market analysis, financial projections, and economic impact.
- NIE number: This is your foreigner identification number. You must obtain this before starting a business in Spain.
- Proof of financial means: Evidence that you have sufficient funds to start and sustain the business, such as bank statements or investment documents.
How to Start a Business in Spain as a Foreigner – Step-by-Step Guide
The exact process will depend on whether you have an NIE and will operate as a sole trader or form a company. Here is a step-by-step guide on starting a business in Spain as a foreigner.
01/ Obtain your foreigner identity number (NIE)
This is your unique tax identification ID and is needed for all legal and tax processes in Spain. You must obtain this before starting your business.
02/ Choose your business structure
Decide which legal structure works best for you. For example, freelancers and contractors would prefer Autónomo (sole trader). If you are forming a Limited Liability Company ( LLC), the Sociedad Limitada will work best. The exact steps will depend on the structure you choose. The CIRCE online system will guide you through setting up an Autónomo or SL, and provide documentation assistance through the Documento Único Electrónico (DUE).
03/ Follow the steps for your chosen business structure
If forming an Autónomo
Complete the necessary tax and social security registrations before you begin business activities. You do not need to reserve a company name.
If forming an SL or another commercial company
- Apply for a certificate of uniqueness at the Registro Mercantil Central (RMC) to confirm that your chosen business name is available.
- Prepare your articles of association and meet all share capital rules for your chosen structure. The minimum capital for an SL is €1.
- Sign the deed of incorporation and submit to the local Mercantile Registry (Registro Mercantil) to legally register the business.
- Obtain the company’s NIF from the Spanish Tax Agency (Agencia Tributaria) and complete the tax registration. This is required for tax and invoicing purposes.
04/Complete all other registrations and obtain all necessary permissions for your activity
Register for Social Security according to your business role. If you have employees, you must register them as well before they start working. Also check whether you require any additional permits and/or sector-specific licenses to operate in your location or proceed with business activities.
Opening a Business Bank Account in Spain
Foreigners operating a business in Spain must open a business account to manage their financial activities.
- First, research the different banks available to you, compare fees, customer support, and online banking services. Some banks cater to foreigners and provide multilingual support and even multi-currency accounts.
- Next, prepare all necessary documentation. You will need your NIE (foreigner identification number), proof of company registration or incorporation documents, your tax identification number (CIF), and valid identification such as a passport.
Note that the information the bank requests will largely depend on the legal structure of your business. Documents needed to set up a business account for an Autónomo may be slightly different from those requested for an SL account.
Taxes, Registry, Social Security for Businesses in Spain
Once you complete all your legal obligations around starting a business in Spain, you become liable for several taxes.
The main tax you are subject to is corporate income tax.
- The rate is 25% for tax-resident corporate entities on worldwide income.
- Non-resident business entities located in Spain are taxed at 25% on Spanish-sourced income.
- There is a reduced, phased rate for small and micro businesses. New companies and startups are charged a 15% rate for the first profitable tax periods.
Spain also has tax treaties with many countries, such as the US, UK, France, and Germany to avoid double taxation, which is important for foreign business owners.
Other important taxes include:
- Value Added Tax (VAT or IVA): This is a consumption tax applied to most goods and services.
- Social Security Contributions: Employers must contribute to the social security system for their employees. The rates depend on the worker and contribution basis.
- Local Taxes: Businesses may pay property tax (IBI) if they own premises and business activity tax (IAE) where applicable. Individuals are exempt from IAE, while companies generally qualify for exemption when their net turnover is below €1 million.
- Withholding Taxes: This applies to certain payments like dividends, interest, and royalties.
Social Security contributions in Spain
Social Security obligations depend on whether you operate as an Autónomo, work in your own company, or employ staff. There is no single contribution percentage that applies to every business owner or worker.
- Self-employed workers (autónomos): Contributions depend on net income and the applicable contribution base. Payments may be adjusted when actual income is confirmed, so the amount can change as earnings change.
- Working company owners and directors: Depends on factors such as ownership, control of the company, and the duties performed. Forming an SL does not automatically place its owner in the employee regime.
- Employees: Employers must register employees before they start work and account for both employer and employee contributions. The employer pays its own share and deducts the employee’s share from payroll. The calculation depends on the contribution base, employment circumstances and rules.
Before starting work or hiring staff, confirm the correct registration and contribution treatment with Spain’s Social Security authority or a payroll adviser.
Hiring Employees and Business insurance in Spain
Business insurance protects your company against risks such as property damage, liability claims, and employee-related issues.
While some insurance types are optional, others are legally required in Spain, depending on your business activities. Depending on the industry and size of your business, additional specialized insurance may be necessary.
Common types of business insurance in Spain include:
| Type of Insurance | Description | Mandatory or Optional |
|---|---|---|
| Public Liability Insurance | Covers claims from third parties for injury or property damage caused by your business activities. | Optional but highly recommended |
| Professional Liability Insurance | Protects against claims related to professional advice or services (errors and omissions). | Optional |
| Property Insurance | Covers damage or loss to premises, equipment, and inventory due to fire, theft, or disasters. | Optional |
| Workers’ Compensation Insurance | Covers work-related injuries and illnesses for employees. | Mandatory if you have employees |
| Employer’s Liability Insurance | Protects against claims from employees for workplace injuries or accidents. | Mandatory if you have employees |
| Business Interruption Insurance | Covers lost income if business operations are disrupted by unforeseen events. | Optional |
Hiring employees when starting a business in Spain
Employment in Spain is strictly regulated. The standard workweek is 40 hours, and employees receive their salary in 14 payments per year, 12 monthly payments plus extra pay in July and December.
Employees are entitled to 30 calendar days of paid vacation annually. The minimum wage in Spain is €1,221 (USD 1,390) gross per month when paid over 14 installments and includes two bonus payments in July and December, or €1,424 (USD 1,621) gross per month when paid over 12 payments.
Employers must register employees with Social Security and comply with labor laws covering contracts, working hours, and workplace safety.
How Can Global Citizen Solutions Help You?
Global Citizen Solutions is an advisory migration consultancy firm with years of experience delivering bespoke residence and citizenship by investment solutions for international families. With offices worldwide and an experienced, hands-on team, we have helped hundreds of clients worldwide acquire citizenship, residence visas, or homes while diversifying their portfolios with robust investments.
We guide you from start to finish, taking you beyond your citizenship or residency by investment application.
