Growing your business often means expanding into foreign markets and countries, like Spain. Setting up a business in Spain comes with many advantages: no business tax, monthly or quarterly VAT reimbursements, lower social charges… So many reasons to expand the scope of your company and promote economic growth.
What are the initial formalities?
When setting up your business in Spain, you must register as an employer and create your “Código de Cuenta de Cotización” on the Social Security system. This is a contribution account code which is assigned to you when you register and is part of control and obligations on the Social Security system. It is important to note that this code is mandatory for each autonomous community where your company is based. Submit your request to the General Treasury of Social Security (Administración de la Tesorería General de la Seguridad Social) closest to your location.
There are two main types of companies in Spain, made up of two subtypes.
Civil company
This type of company is governed by a contract in which all signatories agree to pool money, goods and work, with the aim of sharing all profits made.
- No minimum capital
- Unlimited liability for each partner
Universal civil company
Two scenarios:
- Pooling of all goods – profits made from these are shared.
- Pooling of profits only – each asset is owned by a partner: only the profits obtained from the usufruct of these assets is shared.
Private civil company
Commercial company
This type of company with legal personality (unlike civil companies) is created with the aim of undertaking profit-making activities. The shareholders must share equally in the losses and profits of the company in accordance with their common goal.
- Minimum capital of €3,000
- Limited shareholder liability
Limited liability company
- This is the most common type of company in Spain. Regarding paying off debts, shareholders do not have to use their personal assets to pay them off.
- Once profits reach 40,000 euro, taxes are lower than those of a self-employed person.
Public limited company
- This is the second most common type of company in Spain. Its capital can be freely distributed among its shareholders.
- A minimum capital of 60,000 euro is required for its constitution (25% of which must be paid when the company’s bylaws are made).
How do you get a NIE?
It costs around €10, which is quite ridiculous given everything it gives access to: administrative procedures, social security, opening a bank account, certification of diplomas, driving licence… However, this bargain of a price is the reason for the long waiting lists, as previously mentioned. There is a faster way to obtain the NIE without going through the appointment process, which is with the help of a lawyer, but you will have to pay around €100.
Delaguía & Luzón is a Franco-Spanish law firm based in Valencia, Spain. We offer a wide range of legal, social and tax services, aimed at companies and individuals wishing to settle in Spain, where we provide accessible and personalized solutions. We also provide continuous follow-up with our clients, in order to improve their decision-making from a legal point of view. Don’t hesitate to contact us for any additional information or to get a free quote.