How to open a business in Spain: tips and pitfalls for non-EU residents

Spain as an attractive business destination

Spain ranks third among European countries in terms of ease of doing business, making it particularly attractive to entrepreneurs looking to set up or relocate their business. It should come as no surprise that in recent years this country has increasingly attracted people considering relocating their business or starting new projects. However, despite its positive aspects, there are certain aspects and potential difficulties associated with this situation.

Recommendations for entrepreneurs

Dagmara Marciniak, corporate and commercial lawyer at Giambrone & Partners, shared important tips for EU non-residents to ease the process and ensure a successful start of business in Spain.

Key factors for a successful move

A key factor to consider carefully is that business relocation is most successful when little infrastructure is required. Which areas are seeing an increase in interest in changing the location of your business to Spain today? According to Dagmara, sectors that do not involve complex infrastructure are quite popular. Examples of such areas include IT startups and consulting companies.

Development of the IT sector

These areas are becoming highly relevant due to the rapid development of the technological sector in the country. Spain, like most European countries, is experiencing rapid growth in information technology. Thus, in 2019, the total volume of the information and communication technology sector amounted to120 billion eurosthat amounted to3.8%GDP of the country. Therefore, between June 2020 and June 2021, the IT sector showed a growth of18,8%recovering to pandemic levels.

Accessibility for business

Spain is actively shaping the digital business environment and creating optimal conditions for businesses to grow, which opens up many new prospects for entrepreneurs.

Other benefits of living in Spain

What are some other reasons why Spain attracts the attention of foreign entrepreneurs? Many clients highlight the excellent climate as one of the most significant advantages of living in this country.

Nature and climate

But the picturesque natural scenery and sunny days that delight locals practically all year round are not the only pluses this region of the Iberian Peninsula offers. Other significant factors include:

• A high-quality health care systemSpain boasts reliable public health care as well as affordable private health insurance. Spain boasts reliable public health care, as well as the availability of private health insurance.
• Convenient geographical locationSpain has strategic advantages as it connects the markets of Europe and the Middle East and North Africa regions. Spain has strategic advantages as it connects the markets of Europe and the Middle East and North Africa regions.
• Double taxation treatiesIn addition, we have signed agreements with almost one hundred countries, which allows us to significantly improve the conditions for doing business.

The perfect choice for development

These factors make Spain a desirable place to start a business and relocate to from a variety of sectors. More and more companies are considering this country as an excellent platform for their expansion and exploration of new opportunities. Taking into account all these features, Spain seems to be an ideal choice for those who seek active development and want to enjoy life in a comfortable atmosphere.

Spanish airports and business opportunities

Spain has many airports that offer international flights. This creates excellent conditions for the movement of managers and employees of organizations to the most diverse corners of the world.

The unique cultural heritage and variety of traditional Spanish cuisine attract a large number of travelers and foreign visitors. The local population is renowned for its friendly and open approach to communication, which makes interaction with foreigners easy and enjoyable.

For many people, learning Spanish seems less of a challenge than learning other languages in Europe. All of these points do require more in-depth consideration, and should you have any questions, we are always available to provide all the information you need.

Business registration for non-EU residents

The procedure for registering a business in Spain for non-residents of the European Union includes the preparation of a certain package of documents. What exactly does this process look like and what steps need to be carried out? The sequence of actions may vary depending on the situation:

• Relocation of an existing company from a non-EU state
• Launching a new business in Spanish territory

Stages of business registration

When transferring an already operating business, the key stage is the execution and legalization of all the necessary documents related to the activities of the enterprise. Only when you have a complete and legalized set of official documents, you can proceed to the stage of registering a legal entity in Spain.

Important:documents must be certified with an apostille, which certifies their authenticity and legal validity.

Obtaining the NIE and reserving the name

Next, the NIE (Foreigner Identification Number) should be obtained for those individuals who will occupy key positions in the company. Then it is necessary to reserve the company name in the commercial register, which is an important part of the whole procedure.

Opening a bank account

It is also obligatory to open a bank account to deposit the start-up capital of the company, the minimum amount of which is as follows3,000 eurosfor a limited liability company.

Signing of documents and registration

Only after all these prerequisites have been met does the authorization of the company begin: it will be necessary to sign the memorandum of association and articles of association with a notary in Spain, and then register these documents with the commercial register.

Once all these steps have been completed, your business will be officially recognized in Spanish territory.

Notification of tax authorities and work permits

To ensure the stable operation of the business, it is necessary to notify the Spanish tax authorities of the start of your business activity. It is worth considering that if it is planned to transfer employees from countries that are not part of the EU, a special work permit will need to be issued for each of these persons.

These legal nuances should be considered in advance to prevent possible difficulties in the future.

Simplified procedure for moving to Spain

For those who are planning to move to Spain and want to start a business there, there is a simplified procedure for processing all the necessary documents. The first step is to register a legal entity in Spain. After that, it will be necessary to apply for work permits for each of the employees who want to work in the new country. You can also consider setting up a new business in Spain.

If you are a non-citizen and wish to start a limited liability company, there are a few important steps to follow.

Obtaining an individual tax number (NIE)

First and foremost, you need to getIndividual tax number for foreigners(NIE). This can be done by applying at the specialized office for foreigners (Oficina de Extranjeros) located at the local police department (Comisaría).

Company name registration

The next step is to register your company name with the Mercantile Registry (Registro Mercantil Central, RMC). To do this, you will need to obtain a certificate confirming thatthe selected title has not yet been taken. This procedure can be done on your own through the RMC website and it takes approximately three days, after which you will receive a response.

Opening a business account

The next step is to open a business account in a Spanish bank and deposit into it a minimum of3000 euros. This amount is required to set up a limited liability company.

First of all, it is necessary to carefully prepare and check the availability of all required documents. It is important to make sure that all the papers are not only translated into Spanish, but also correctly certified, as this is critical for the successful running of a business in Spain. One of the main administrative hurdles is obtaining a unique NIE number, which is required for the manager of the company. This will require an appointment at the foreigners office, which can take a long time. As an alternative solution, we offer our clients the service of promptly obtaining an NIE number, which greatly simplifies the process.

In addition, it is important to make sure that all relocating employees have the appropriate work permits. If employers hire workers without the necessary documents, this can lead to large financial penalties and even the closure of the company.

Remote business registration

If you don't have the opportunity to visit Spain in person, the question arises: is it possible to register a business remotely? And how exactly can your lawyer and law firm help in this process? Yes, it is quite possible. Many of our clients have successfully transferred their businesses to Spain without leaving their home country. In this case, the client will need to execute a power of attorney directly from their home country. We provide a sample bilingual power of attorney, which the client must sign and have notarized. In addition, the Spanish consulate can be contacted to obtain a similar document. This power of attorney allows us to perform all necessary actions in Spain on behalf of the client, including:

• obtaining an NIE number;
• taxpayer identification number;
• signing a notarized deed;
• registration in the commercial register;
• and many other important steps.

Advantages of contacting us

What benefits will the client receiveWhen contacting you at the first stage of business registration? First of all, our experts provide full information about each stage of registration and the list of documents to be prepared. In addition, we create a preliminary schedule of registration and a detailed calculation of the cost of services, which includes:

• our fees;
• all associated costs, such as notary fees;
• registration fees.

We also focus on the most important tax obligations that it is advisable to know about and are always available to answer any questions that arise.

Recent success stories

Do you have any interesting examples of recent incorporation of new companies? In our recent experience, the main highlight is the successful assistance we provided to a client from the Dominican Republic who decided to relocate his business to Spain. The whole process took only about two months and the client did not need to travel to Spain. We were able to prepare all the necessary documents and get the business up and running, providing the client with all the necessary information to make the process a success.

Conclusion

Spain is indeed an attractive destination for business relocation due to its high ranking in doing business, favorable economic environment and picturesque climate. As I mentioned in the article, the presence of a stable and reliable IT sector, an efficient healthcare system and a favorable geographical location make the country a worthy choice for entrepreneurs from various industries.

However, despite all these pluses, one should not forget about possible pitfalls and nuances of business legalization, especially for non-residents. Therefore, thanks to the expert opinions of such professionals as Daґmara Marciniak, I hope that future entrepreneurs will be able to get the necessary information and avoid common mistakes.

Key points to keep in mind:

• Thorough preparation of documents:Having a complete set of documents with an apostille is mandatory.
• Obtaining an NIE number:A foreign identification number is important for business registration.
• Company Registration:Opening a bank account and filing incorporation documents are key steps in the process.
• Work Permits:Make sure employees have all the necessary authorizations to work in Spain.

It is important to remember that each stage of the process has its own peculiarities and due consideration must be given. For those thinking of relocating a business or starting a new company in Spain, this path can be not only a successful business strategy, but also a great opportunity for personal and cultural growth.

If you still have questions or need more information on each aspect, I am ready to help you with answers and advice. Spain is waiting for you with open arms and great prospects!