Company Formation in Spain

Many entrepreneurs are choosing every year to leave their own countries and open their business abroad. Why Spain? We answer all of your questions about entrepreneurship.

What should you start your business in Spain?

The Mediterranean climate, numerous beaches and islands, renowned gastronomy, friendly people are not a myth here in Spain. If you choose to start your business here, this lifestyle will become your daily routine and you'll be able to enjoy a high quality of life.

Spain bears good weather and holidays but also tax benefits and opportunities for entrepreneurs. Payroll taxes are generally lower than those found abroad and the tax rates are lower too.

Steps to starting your company in Spain

If you want to create your own company, you must choose what type of business you want to start in terms of level of responsibility or type of business activity. In Spain, there are two main types: Sociedad Anónima which is the equivalent of the SA and Sociedad Limitada which is the equivalent of the LLC.

After this, you'll need to look for a room or apartment that is right for your business. You'll also need to get your Spanish resident number, NIE. The process is fast and you can sort it all out in just a few days.

It is mandatory to visit your notary in order to form your company. Upon forming it in front of your notary in Spain, you must explain its corporate purpose, the statutes and the residency of the business. It's worth noting that in Spain, the business or corporate can be very broad which can be an advantage. In effect, a Spanish company may have very varied business activities written into its statutes.

Tax Advantages of a Company in Spain

Employee social charges amount to around 30% for a French employee compared to 6.4% for one in Spain. For employer social charges, a French employer pays a tax of 25% to 45% of the each employee's salary while in Spain; the employers' costs cannot exceed 30.6%. As for withholding an employer's salary, the employer should pay a tax of 255.86 Euros a month or if he is under 30 years old he should pay 177.94 Euros. Finally, corporation tax is 33.33% in France while in Spain that calculation of this tax is different because it works in a more advantageous way in order to facilitate enterprise management.

Moreover, the VAT number of your company will allow you to charge in Europe but will also exemption from VAT when invoicing certain products or services. In this case, it is imperative that the number always appears on the invoices of both the company and the client. For this to be applicable, both your company and client must be situated within the EU.

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