Everything You Need to Know to Start a Business in Spain

For the last seven years, Spain has been an ideal hub of foreign investment and a place of exciting business opportunities. A world-class infrastructure, entrepreneurial network, and some mind-blowing think tanks communities make cities like Madrid a profitable spot for starting business ventures. However, before entering into any business venture, an entrepreneur must know the rules of the game. Since the path to entrepreneurship is not easy so it is a better idea to take the help of self-employed lawyers in Madrid.

An expert in business laws can help you to understand the dos and don’ts of a business effectively. When you decide to do business in Spain it is important to weigh the pros and cons and the legalities of business with expert advice. Spanish law allows foreign investors as well to invest in different types of business entities which are discussed below. Let us know about the possible types of business firms, laws regulating them, and the things to keep in mind to start a business in Spain.

Types of Business Entities allowed in Spain

The most common way to do a business in Spain is to start a company under Spanish corporate laws. Spain offers its investors to commence a company form of organization in two forms:

• Sociedad Anónima (S.A.)
• Sociedad de Responsabilidad Limitada (S.R.L.)

An individual can perform a business activity directly in Spain as a Natural Person as in the eyes of Spanish Law. You are also permitted to form joint ventures with already established companies or businesses in Spain. The two forms of joint ventures that are prevalent in Spain are:

• Unión Temporal de Empresas (U.T.E.)
• Agrupación de Interés Económico (A.I.E.)

Regulations for Starting a Business in Spain

If you are a European Union citizen then the free movement of goods and services is permissible to you. For non-EU and EU citizens, it is necessary to obtain an NIE number if you wish to do business in Spain. An NIE number is a unique identification number that is compulsory to obtain according to Spanish taxation regulations.

If you are residing in Spain, then you can get this number in person, or if you are a foreigner you can apply it from the Spanish embassy. Apart from this, a work permit is necessary. You must be able to mention the nature of the business, copies of legal business documents, and the proof of investment. If you are a professional then it must be noted that professional services are heavily regulated in Spain.

Important Tips to Keep in Mind

• Be aware of the taxation rules and business laws in Spain. Make a checklist to ensure you have not violated any business law if you are starting it for the first time in Spain.
• Plan your business goals according to the Spanish working hours. Respect their culture and Spanish siesta.
• To continue your business in the long term it is suggested to apply for a temporary residence license that is valid for one year. After five years of tenure, you can go long-term residence status in Spain.

Conclusion

While you are looking to invest in a joint venture or a corporate form of organization, it is always a good idea to be informed about the laws of a nation. Despite having suffered through a long period of economic shutdown worldwide, Spain has risen like a phoenix among the top five economies of the world. Since the business opportunities are ample here, for foreign investors, investing in Spain can be profitable at this time.

Sarah K, a professional writer who share interests in different creative niches. Her ideas and tips towards such niches have contributed to the online community.