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You will not be considered as an employee, and will have less social benefits than you would as a regular employee. That is why, First of all, you need to download the corresponding application form on the tax agencys website. In that form, it is asked whether you are a sole trader (empresa individual) or a self-employed individual (autnomo). Our business lawyers will solve all your doubts and manage the whole process for you. To find out more or to opt-out, please read our Privacy Policy, which has also been updated to reflect the same. One example of this is siestas, which dont really exist anymore in Spanish business; although long lunches still do. Because you will need to present a really detailed business plan, prove you have enough skills and financing methods to ensure the company will grow. Opening a new business in a foreign country can be a nerve-wracking proposition. Especially if the activity or service to be provided is dangerous in any way, such as certain sporting activities. That is why we created this complete guide: to solve all your doubts. That said, the perception of Spain as having an old-fashioned or twee business culture isnt completely accurate. I had many questions as it was my first property purchase and she always took the time to explain. Initial discussion with a lawyer to understand the project you have in mind, Preparation of a report on the steps to be taken to initiate the activity and the likely costs involved, including an evaluation of the likelihood of success, Upon agreement, initiation of the application and the steps to obtain the licence, Follow-up services to include full tax and accounting service. The Self-Employed Set-Up and Tax Service is ideal for an individual sole trader who is planning to work alone. An autonmo is two things: a freelancer and the administrator of a company. In order to start your business in the Spanish territory, you will need to go through the next steps: Lets now analyze each of the 8 steps to constitute your company as an expat in Spain. The majority of these lenders also offer specific products for self-employed people and larger companies, respectively. We are just going to briefly talk about the main ones: Probably the best option for small companies, as, In terms of taxes, as a sole trader, you will pay. Why? This includes information on business culture, the main types of business, and the most important insurance and taxation considerations. We are just going to briefly talk about the main ones: The different business structures in Spain are the following ones: Probably the best option for small companies, as the legal process for its creation is really simple. You must bring this document to the notary on the actual constitution day. Fees specified in advance and legally guaranteed. Upon agreement on the specific course of action to take, the tax lawyer will implement and manage the investment. thank you! [View on Google]. Before starting the process of constituting a company, we must decide which will be its type. For painters, web designers, For those individuals whose activity does not require a company for its undertaking, as the work freelancers do. VAT is generally charged at 21%, although companies in some industries can pay a lower level of either 4% or 10%. Because yes, you may have your work permit as a self-employed worker. In Spain, there aredifferent company structures, which are defined by the Commercial Code. You need your company to be identified with the tax authorities. In addition to the costs mentioned above, there will be considered those for creating the documents of the. Administrative support for accounts/ accounting records: Preparation of accounting. The first thing to do as a foreigner is to get your NIE number. 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. For example, you can use your computer, phone or any other asset that is similar and that can sum up to that amount. This is one of the most crucial steps of the process; as you need to foresee any future possibilities in order to avoid problems later on. The NIE is the most important thing in order to freely operate in Spain. Its a different matter, though, for expats from outside of the EU; they will require a work permit to move to Spain and set up a business. 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. If you make the application in person at your local tax office, bring the original and a photocopy of your NIE (numero identificacion extranjero). If the business idea you would like to develop is innovative and technology is at its core of operations, then you should apply for the entrepreneur visa. Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. You just need to get your NIE and EU registry certificate, and then you can simply move to the constitution part. You must supply the notary with original documents and photocopies of: With the original deed of incorporation obtained from the notary, you should then go to the Local Government Tax Authority to register it. The NIE is essential for any fiscal transactions in Spain, such as incorporating a company. This is, without any doubt, the most popular firm structure in the Spanish territory. The accounting services, the creation of documents, and the costs of the agent in charge of, There are also costs for accounting services, creation of company documents, transfer tax on stamp duty, to name a few. Nevertheless, from the day we sign the set up of the company at the notary, they will give you a provisional VAT number, with which you can start your activity. The country has good logistics and infrastructures that can help your business project succeed. In that sense, there are two different types of directors. It will offer you the possibility to expand to a new market while harnessing the power of your brand and systems. A more laid-back approach, for example, can result in deadlines overrunning and meetings stretching late into the evening. This is not actually a cost per se. Ensure legal interests are protected, especially when creating a company with several partners. 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). This document states that the name of your company is free to be used and is now under your possession. You will be liable for any and all losses incurred by the business. How to get it? Because of its flexibility and easiness in the registration process, just demanding 3.000 for the constitution process as a minimum capital investment. This is the most inexpensive way to set up a business. Hello, Business accounts vary in cost, and in lieu of a fee, some will require minimum deposits. The amount of time in which you can obtain it will depend on whether if you are an EU citizen or not: it takes 3 to 5 working days to obtain the NIE number for EU citizens; and the time period for non-EU ones will vary depending on the corresponding Immigration Office. For limited companies, the process is significantly different. This is the minimum share capital allowed when setting up a limited company. For sure this is not money lost and can be used in the firm daily operations. I am so grateful to her for making this process so much easier and having someone I could trust. The most common form, however, is the sociedad limitada or S.L. We will go into more detail shortly, but the process works like this: Non-EU citizens moving to Spain to start a business will need a valid work permit to do so. With the power of attorney you will have granted to us, on your behalf we will register your company at all Government institutions and offices required by law. Call us now at +34 938 07 40 56 toset up an appointment with Federico Richardson, one of our specialists in company formation in Madrid and Barcelona. If you are a Spanish national, you will have a NIF rather than a NIE number. Nevertheless, even if the project does not necessarily have to be technological for the self-employed worker visa application to be accepted, not every company will be valid. The costs for setting-up an ordinary limited company (3,000 euros initial share capital, with 1-4 shareholders usually are: The process usually takes 4-6 weeks, once the shareholders obtains their NIE; in order to become a shareholder, every partner will need a foreigners ID number (NIE). Once completed the registration process, we will draw up all other corporate documents required by the Commercial Companies Code. If you want to set up a branch of your company, you will need to present a notarized power of attorney and a copy of the companys public deed of incorporation. That is why we created this complete guide: to solve all your doubts. A British national, resident in Spain, who is interested in setting-up a new business wanted information on the likely costs and the legal options when starting a business here. You will now need to apply for the deed of incorporation to establish your company. Our company formation fee is approximately EUR 1,500. Service levels agreed in advance and guaranteed. I want to sign up to the newsletter! you can also relax in the knowledge that any communications received from the Tax Authority often impenetrable to locals never mind foreigners will be managed conveniently and efficiently by your accountant. And nowadays, due to the rise of the internet and the interconnected world it has created, opportunities abound. You can access our article on how to become an autnomo in Spain in order to clarify even further. You may also be required to submit a business plan and proof of your skills and experience. In addition, some companies are moving away from an outdated hierarchical decision-making culture. The main types of business structure are as follows. Whats different is the need to become a legal resident in the country, which creates an extra prior step you will need to realize. First of all, you will need to provide evidence that you have enough capital to invest in your business and support yourself while living in Spain. Ensuring that your Articles of Association contain all necessary elements. Because it will avoid the need of going again to the notary in the future if you expand your business or pivot the core activity. You can find information about the form, along with form downloads and links to completing online, at the Spanish Tax Agency (Agencia Tributaria). While it might take some time to adjust to business practices in Spain, there is no need to be put off. What are the steps in setting up a Company in Spain with Corporate shareholders? one that is registered, established, or incorporated outside of your country of residence, there are several major pros and cons you should bear in mind. There are two possibilities to get this number: Once you have your NIE number you need to obtain whats called a certificate of uniqueness. Please contact me about FCA Authorised currency services (to beat the bank and save up to 4% on money transfers to and from Europe and further afield). Now that you have obtained the deed from the notary, you should go to the Spanish Tax Agency (Agencia Tributaria) in order to: Bear in mind that you will start paying taxes once when you start your activity. Nevertheless, it is crucial that you understand the requirements before starting. Incorporation is important in protecting the owner from personal liability in the event of bankruptcy, but this kind of structure does involve a number of additional tax, accounting, and mercantile obligations. Where would you prefer your Accountant/Tax Lawyer to be located? He specialises in civil law, in particular property matters, mortgages, inheritance and family law. Depending on the type and size of the business that you are planning to set-up, a limited company can often be the appropriate choice for the same reasons as are the case in your home country flexibility and limited liability. So if you just invested 3.000, that is the maximum amount it can be requested from you in case of indebtedness. This has been a guide for expats who want to start their business in the Spanish Territory. This step takes about three days before you receive the answer from the RMC by courier. Furthermore, you will need to introduce an address. EU citizens setting up as sole traders or partnerships can jump through the required hoops relatively quickly. it was very informative, quick and straight to the point! Donate to the UN Refugee Agencytoday. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. Employees are also entitled to 30 calendar days vacation per year. This HR & Payroll Service includes the following components: This service costs 25 per month for the first employee and 20 per additional employee. If you want to import/export within the EU, Bear in mind that if you are registering as a sole trader theres a specific regime that applies, called. As there is no need for a minimum share capital for this type of entity, the entrepreneur will focus on the costs related to its formation. They will also have the responsibility of deducing the required social security contributions from their employees salaries each month. One of its main advantages is that your liability is limited to the capital investment made. Note that the bureaucracy associated with incorporating a company and ensuring tax and reporting compliance tend to be rather more complex than in the UK and other Anglo-Saxon jurisdictions. The Spanish government can ask you to provide evidence on how your company could create jobs for workers in Spain. You can find the nearest one in your area at www.notariado.org. Hence, you are fully liable for any possible debt the company has. As a business owner, you will be responsible for your own personal tax return. This is another really important consideration you must take before starting. You will need to fill out the model 036 or 037, depending on the case. :) [View on Google], Miguel has been excellent - really quick to respond and helpful. Many times we mistakenly assume that the word autnomo and self-employed are the same. Fees as recommended by the Local Professional Body. Recommendations regarding the most appropriate fiscal arrangements to ensure taxation levels are optimised. I will advise this firm to anyone going to buy a property in Spain. Applying for company tax and identification numbers. You can send an email to [emailprotected] and we will help you! Besides, determining who the director of the company will be is a required step. This is why we highly recommend you to contact us in order to let us help you with the overall process. We'll assume you're ok with this, but you can opt-out if you wish. In those cases, as the project is not innovative enough (its something that already exists), the residence permit that will allow you to set everything up is the self-employed worker visa (a regular work permit). If you want to set up a limited company in Spain, there is a defined path to follow. These are the two permits that will grant you the specific type of residency that allows you to start a company. After this period, you will be taxed at the general rate of 25%. Looking forward to your answer, kind regards. So finding the right business idea is crucial. At this point, you need to decide how many and who will be the shareholders of the company. That is a crucial step. 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. This is the official document that states the key details of the company (name, address, details of directors, board members, shareholders, etc.). If you want a virtual office in Spain, add around EUR 80. directors who live in Spain must be registered as autnomo (sole-trader). During your appointment, youll need to present the 036 or 037 form, your NIE, passport and IRPF form. Nevertheless, that does not imply that the company you set up is as an autonmo. And its wrong. Therefore, if your business gets into debt, you are personally liable. They can provide a wide range of benefits to the company and company principals. Rafael graduated in Law from the University of Seville in 1995. Thank you to Rafael for helping us clarify how our EU Long Term Resident Permit could help us in moving to Spain. I would like to open a SOLE TRADER business, as a web designer, in Spain. Why are we mentioning this? And what happens if you dont have that amount of cash? Just in case you dont know where to start, here you will find a list with 25 business ideas to start in Spain as an expat. If you foresee that you are going to get incomes over 60.000, directly constitute a company instead of establishing yourself as a self-employed worker. Traditional charities which accept donations from the public will generally fall into the foundation category. Nevertheless, the specific steps you should take in order to successfully have your company start running are not that clear. Find out more in our full guide on how to set up as a freelancer in Spain. Our consultants are registered and regulated by the Professional Accountants Body of Spain and speak fluent English. Other declarations are frequently applicable on a quarterly and annual basis, depending on your circumstances. As your activities are regulated under the income tax regime, it is possible that you end up paying an unnecessary amount of taxes by using this legal structure.