If you are a foreigner and you have decided to join one of the business sectors in Spain, but you are wondering how can I operate? Don’t worry, in the following article we will tell you the different alternatives to use so that you can formally set up your project, let’s get started!
Why do business in Spain?
Nowadays, establishing business in Spain is one of the most viable options to internationalize or to make a new project known and grow in the business world.
Thus, we are not only talking about a country with a strategic location, which represents a hub that easily connects with both Europe and Latin America, but also one of the destinations with great potential to carry out Foreign Direct Investments (FDI) and benefit both nations.
In addition, it is estimated that more than 12,500 foreign companies operate in Spain, helping to generate employment and boost key sectors such as Information and Communication Technologies.
Finally, it is important to highlight that the business climate, the entrepreneurial culture, the diverse possibilities of operating with new entrepreneurs and the tax advantages for setting up successfully in the country, make Spain an ideal option for entrepreneurship.
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Main ways of operating in Spain
Now, if you are looking to start your new project this year, we will tell you about the different alternatives you have to set up a business in Spain so that you can choose the option that best suits your business needs:
Incorporation of a Spanish company
According to Spanish law, to invest in Spain and incorporate a company you will have at your disposal different commercial entities to choose from, such as the Sociedad Anónima (S.A.) and the Sociedad de Responsabilidad Limitada (S.L.). Do you know what their main characteristics are? Read on to find out:
The Public Limited Company (S.A.)
60,000 euros is required for the creation of the minimum share capital.
The disbursement on incorporation must be a minimum of 25%, and the share premium (if any)
An independent expert’s report is required for non-cash contributions.
Shares are marketable securities that can issue debentures and other securities that are recognized or create debts.
Report required to amend bylaws
The Limited Liability Company (S.L.)
For the S.L. a minimum capital of 3,000 euros is required.
The disbursement in the incorporation must be in full
In this case, an independent expert’s report on non-cash contributions is not required.
The shares are not transferable securities, so that debentures and other securities that recognize or create a debt can be issued.
No report is required to amend bylaws
On the other hand, in order to establish either of the two types of companies, it is necessary to comply with certain requirements in common. In the following scheme we show you what they are:
Limited liability company
Another way to set up a business in Spain is to become a limited liability entrepreneur. Do you know what this means?
A limited liability entrepreneur, also known by its acronym ERL, refers to a natural person who carries on a business or professional activity for his or her own personal and direct account.
Here are the essential requirements for setting up a business in Spain as a limited liability entrepreneur.
Branch opening
When we talk about branches, we refer to those permanent establishments located in Spain, which belong to a parent company located outside the country.
The main objective of this type of business is to expand and operate abroad with a dependent unit.
In the following chart, you will find the necessary information related to the requirements to establish a branch office:
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Other ways of operating in Spain
Business cooperation
Another alternative for doing business in Spain is through business cooperation, i.e., a type of alliance between companies that seek to generate synergies to maximize their competitiveness and promote innovation.
Currently, the most frequent type of business cooperation is known as a joint venture: a partnership in which the partners share capital risks and receive benefits according to a prior agreement.
In this sense, among the main forms of business cooperation that you can apply in Spain are:
Through a joint venture
As an Economic Interest Grouping
Through Joint Venture Accounts
With Participating Loans
Procurement
In addition to the cases mentioned above, another way to establish business in Spain or invest in the country is by acquiring shares, either in a corporation or a limited company.
On the other hand, you can choose to acquire real estate that is located in Spain or to make a sale and purchase of assets and liabilities corresponding to Spanish companies.
Venture Capital Entities
Operating in Spain through venture capital involves investment strategies that are channeled by financing companies either directly or indirectly.
Thus, this alternative seeks to maximize the value of the company by generating management and business advice supported by new investments.
According to Law 22/2014 of November 12, 2014, the regulatory framework for these entities is made more flexible in order to manage to boost the raising of funds that contribute to financing a greater number of companies in the country.
In addition, it is allowed to invest in business projects both in the development phase and those that already have a consolidated trajectory in the Spanish territory.
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Considering setting up business in Spain is one of the best decisions you can make today. So, if you are thinking about which of all the above alternatives will benefit you the most, you can contact our advisors at TAS Consultancy, who are committed to help you in your specific case and invest in the country successfully. Contact us at +34 93 737 75 25 and ask for our free advice.
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