ENTREPRENEURSHIP
*The full text of this article is available as PDF below.
Fact sheets Citizens of the European Union, the European Economic Area and Switzerland. This section contains the conditions for the exercise of the rights of entry and exit, free movement, stay, residence and work in Spain by citizens of other member states of the European Union, of those of the Agreement on the Economic Area European (Iceland, Liechtenstein and Norway) and Switzerland, as well as their families.
If the residence in Spain is to be fixed for a period exceeding three months, the citizen must request the registration certificate and the family member the family card of a citizen of the Union. Information
You can find it here:
Citizens of other States This section includes the conditions of entry, stay, studies, residence, family reunification, residence and work and other authorizations that can be obtained by foreign citizens from third States, without prejudice to the provisions of special laws and international treaties in those that Spain is part of Citizens of other States: authorizations linked to the world of business and talent.
This section includes the conditions of entry and residence for foreign citizens who want to invest and undertake in Spain as well as those who work as highly qualified professionals, intra-corporate transfers, researchers and professors hired by universities, bodies or centers of higher education and research or business schools in Spain (regulated in Law 14/2013, of September 27, supporting entrepreneurs and their internationalization). Foreign citizens documentation Information necessary to obtain documentation proving the legal situation in Spain of foreigners.
http://extranjeros.mitramiss.gob.es/es/InformacionInteres/InformacionProcedimientos/index.html
What are the steps to establish a limited liability company (“S.L”) in Spain?
Operating as self-employed, so called “autonomo” is the least bureaucratic and fastest way to start a business. Only a notice for Tax and Social Security authorities are required to start a business as self-employed.
Instead of being a self-employed, you should consider setting up a company, normally an “S.L., Sociedad de Responsabilidad Limitada” if:
Setting up a business bank account in Spain
After you have obtained a tax code and the certificate of no-name coincidence for a limited business, you will need to open a business account with a Spanish bank and make a deposit of €3,000. This is the minimum share capital allowed when setting up a limited company. Evidence of payment can be obtained in the form of a bank certificate which will need to be provided to a notary or lawyer showing the act of incorporation of the company. If you don’t have a Spanish bank account, find out how to open a bank account in Spain.
Deed of incorporation: You will now need to apply for the deed of incorporation to establish your company. This is the official document that states the key details of the company (name, address, details of directors, board members, shareholders, etc.).
You can arrange a local notary appointment to sign the deed of incorporation.
This step lasts about one to three days depending on the notary. You must supply the notary with original documents and photocopies of: Tax form 036; Your certificate from the Mercantile Registry: Your NIE; Evidence of having cash in your bank account.
Registering the deed of incorporation: With the original deed of incorporation obtained from the notary, you should then go to the Local Government Tax Authority to register it. The deed will be stamped certifying this fact. This step should not take longer than two hours. Do not forget to take with you your original documentation and photocopy of the deed and your NIE. You will then need to take the stamped deed to the RMC where it will be registered in the Spanish Register of limited companies. It should take around 15 days for the deed to be registered and original documents returned. Finally, you will need to return to the tax office to obtain the permanent Corporate Tax Identification Number (CIF) after the completion of the incorporation process. Newly incorporated companies must use the 036 form used to request a tax identification number; to describe their business activity, and disclose other business details. Do not forget to take along the original and photocopy of the deed and NIE.
Tax and social security considerations: As mentioned above, your company will need a tax number. To obtain this, you will need to complete the tax form 036; this can be done online or by hard copy, delivered to your local tax office. You can find information about the form, along with form downloads and links to completing online, at the Spanish Tax Agency (Agencia Tributaria). If you make the application in person at your local tax office, bring the original and a photocopy of your NIE (numero identificacion extranjero). To register for social security when starting a business in Spain, you will need to take along your deed of incorporation, NIE, CIF, and form TA 0521 (which can be obtained from your local social security office). Details of local social security offices in Spain can be found on the social security website.
Foreign companies opening up a branch or subsidiary in Spain: If you are running your own company at home, but are looking to set up a branch or subsidiary, doing this can be simpler than starting from scratch with a new company. When processing your application, you must provide a series of documents, including the following: A copy of the main company’s certificate of incorporation and certificate of good standing; Notarized power of attorney; Spanish tax identification number (NIE); A member of staff at the Spanish branch to be a resident in Spain, who will agree to be liable for any company debts and tax payments.
While additional branches and subsidiaries don’t need to file accounts on the business register, they must pay income tax and submit quarterly VAT returns through their NIE number. Some banks and business advisory companies will offer special packages to help you set up the particulars of opening a new branch in Spain.
Starting up a non-profit company in Spain: They will fall into two categories: foundations and associations. Traditional charities which accept donations from the public will generally fall into the foundation category. Associations, on the other hand, are usually run more informally by groups of people who have a common interest. It is free to set up an association, but you will need capital of at least €30,000 to do this. With a foundation, anyone can donate to the cause (they don’t need to be a member) and committee members can be paid for their work, as with a normal business. Foundations that turnover more than €2.4m or have more than 50 employees need to undergo an external audit annually.
Administrating your business in Spain: Businesses must keep records of their accounts and order books, which can be requested for scrutiny by government bodies such as the tax authority. Companies must also keep a book of minutes containing details of measures agreed at Annual General Meetings (AGMs). Companies must have their mandatory book of accounts certified and stamped by the local office of the Mercantile Registry before they begin to use them.
Business banking in Spain: Business bank accounts are provided by all of the biggest lenders in Spain. The good news is that it is possible to get a bespoke account depending on the specific needs of your business. Banks such as BBVA, Bankia, Santander, and La Caixa all provide business accounts. Most of these lenders also offer specific products for self-employed people and larger companies, respectively. To open an account, you will generally need to provide proof of your company’s registration, a registered address, and (for larger companies) at least two signatories. Business accounts vary in cost, and in lieu of a fee, some will require minimum deposits. You can find out more about banking in Spain in our full guide to opening a bank account in Spain.
Taxation for businesses in Spain: How your business is taxed in Spain depends on the type of enterprise you are running. Sole traders will pay tax on a quarterly basis at the standard rate of income tax; they will need to fill out a tax return at the end of each financial year. Partnerships work similarly, with each partner being held responsible for paying their own income tax. For limited companies, the process is significantly different. Limited companies pay corporation tax, which is levied on worldwide profit. Tax breaks are available for new companies. For the first two years, limited companies pay 15% tax on the first €300,000 of profit, and 20% tax on profits above this threshold. After this period, you will be taxed at the general rate of 25%.
VAT for limited companies in Spain: While some businesses are exempt from VAT, the vast majority need to pay this. Unlike in some other countries, there is no threshold when VAT kicks in; rather, it is applicable on all profits. VAT is generally charged at 21%, although companies in some industries can pay a lower level of either 4% or 10%.
Social security for companies in Spain: Sole traders and partnerships in Spain need to contribute social security at a charge of around €265 per month, plus a further contribution if they are employing staff. Limited companies will need to register for social security payments and make contributions at 29.9% of their employees’ salaries. They will also have the responsibility of deducing the required social security contributions from their employees’ salaries each month.
Business insurances in Spain: The level of business insurance you will need to take out varies significantly depending on the size of your company, whether you employ staff, and the nature and value of the assets the company owns. As an owner of a limited company, you will need to take out a personnel insurance policy to protect your employees in the event of accidents or sickness. As with all insurance schemes, the levels of cover and costs vary, so it is best to take advice from an expert broker. Public liability insurance is vital if you are running a business. This will cover you against any claims by third parties regarding injuries, accidents, or damage of property that is incurred on your watch, or as a result of negligence from within your company. Finally, you will also need buildings and contents insurance. This will protect you against any damage to your offices or loss of stock; as well as covering theft of stock owned by your company.
Employing staff when starting a business in Spain: Employment in Spain is highly regulated, so you will need to ensure that you meet the rules before expanding your team. Employees in Spain generally work a 40 hour week and have their salaries paid in 14 payments per year (one payment each month then an extra one in July and December). Employees are also entitled to 30 calendar days vacation per year. The minimum wage in Spain is currently €900 a month, based on 14 payments a year.
Useful links: http://www.rmc.es/
https://www.notariado.org/portal/
https://www.trinijove.org
Writing a business plan …Your business plan outlines what your business does and what you are trying to achieve. It explains what the market opportunity is, what makes your business special and how you will make it a success.
Writing a business plan helps you: check that your idea makes sense; plan your sales, marketing and business operations; identify problems and how to overcome them;set out your objectives and the financial return you expect; work out what financing you need; convince other people to back your business.
Why write a business plan? Writing a business plan helps you think about what you are doing: The plan sets out your strategy and action plan over the next one to three years, or sometimes longer; As part of the process you set concrete objectives and plan how you will achieve them; Writing a business plan helps you focus and develop ideas. Priorities are identified. Non-priorities are dropped, saving precious time; Putting the plan in writing makes it easier to spot any gaps where you have more to do; Once written, the plan is a benchmark for the performance of the business; By involving your employees in the complete planning process, you continue to build up a successful, committed team; You may need a plan to explain your business to other people; A business plan is essential if you are raising finance from a bank or outside investors; A good plan can help you attract new senior management, or business partners such as distributors and agents; You should tailor your plan to the target audience. For example, you may want the plan to ‘sell’ the business to your bank manager or investors; Ask the intended recipient if there are any specific issues they want the plan to address or a template you should follow.
How to write a business plan? Base your business plan on detailed information where possible. But do not include all the detail in the plan. Leave the detail for operational or marketing plans; Keep the plan short; Focus on what the reader needs to know; Cut out any waffle; Make sure there are no spelling mistakes; Detailed business plans are often quickly shelved, because they are difficult to use on an ongoing basis; Include any detailed information you need in an appendix; Base your business plan on reality, or it may be counterproductive; Over-optimistic forecasts can lead to increased overheads followed by a cash flow crisis and drastic cost-cutting; Be realistic, even if you are selling the business to a third party. Financiers, business partners and employees will see through over-optimistic plans that ignore weaknesses or threats. Management credibility can be damaged; Make the plan professional; Put a cover on it; Include a contents page, with page and section numbering; Start with an executive summary. This summarises the key points, starting with the purpose of the business plan; Use charts, if helpful; Even if the plan is for internal use only, write it as if it were aimed at an outsider: Include company or product literature as an appendix. Give details about the history and current status of the business.
Business and products; Market and competition; Marketing and sales strategy;? Management and personnel structure; Your business operations; Financial forecasts;
SWOT: analysis helps show that you really understand your business and the key external factors that you need to deal with.
Set out a one-page analysis of strengths, weaknesses, opportunities and threats
Be honest about your weaknesses and the threats you face
