Costs of Setting-up a Business in Spain

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. Below are the answers, that others may find useful.

What is the cost of setting up a limited company in Spain?

There’s no fixed cost. It would depend on several factors (such as: initial share capital, number of partners, extension of the incorporation deeds, …). The costs for setting-up an ordinary limited company (3,000 euros initial share capital, with 1-4 shareholders usually are:

  • 3,000 € (initial share capital). This is not actually a cost per se. You have to deposit this amount in a Spanish bank account and once the company is registered, you are free to use this amount to invest in assets on behalf of the company.
  • setting-up cost: 1,500 € – 2,000 € (including notary fees, mercantile registry – company´s name reservation and certification, lawyer’s fees …)

 

How long does the process take to set-up a limited company in Spain?

The process usually takes 4-6 weeks, once the shareholders obtains their NIE; in order to become a shareholder, every partner will need a foreigner’s ID number (NIE).

 

What will your fees be?

Our fees for an ordinary limited company set-up are 600 € + IVA (21%) (please note that our fees are included in our answer regarding set-up costs above).

 

What will your monthly or annual fees be once the business has been started to take care of tax returns etc?

We normally charge a basic fee of 120€ + IVA* to limited companies, which covers the following costs:

  • Maintenance of legally required records
  • Quarterly IVA returns
  • Annual Corporation Tax return
  • Annual  Return (Abbreviated accounts, balance sheet, profit and loss statement, annual report)

*IVA charged is deductible against any IVA (VAT) paid. The monthly fee can vary depending on the number of transactions that are invoiced by the business.

 

What is the most cost effective way to start a limited company in Spain? 

We recommend setting-up an ordinary limited company (sl), 3,000 euros initial share capital.

 

What is the most tax efficient way for a company to run in Spain?

It’s not easy to answer … if your profit is not too high (10,000 euros – 12,000 euros), the taxation for a sole-trader or self-employed is better than the taxation for a limited company. With a larger profit, taxation would be better for limited companies.

 

Would we be better to register the company in Gibraltar and have bank accounts in Gibraltar?

Most likely the taxation would be lower, but for commercial purposes I don’t recommend it (companies and customers in Spain are usually wary of companies from Gibraltar, because Spanish rules and warranties do not apply.) Also, as a resident Of Spain, you will be liable for personal taxation in Spain on worldwide income which will mean that any income derived from the profits of the company will be subject to Spanish income tax anyway and you will also most likely need to hire two sets of professionals to manage your fiscal responsibilities, thus increasing your cost base.

 

Would both I and my business partner have to be registered as self-employed ‘autonomos’ or could one person be autónomo and the other person stay on a minimal contract for Social Security purposes?

It would depend on your role on the company:

  • directors who live in Spain must be registered as autónomo (sole-trader).
  • partners or shareholders who don’t work in the company do not need to be registered with the social security system.
  • partners or shareholders who work in the company: it would depend on their percentage of participation in the company.

 

Could the company name be the name of the registered sole-trader?

Yes. you can use either of the following as the company name:

  • name of one of the shareholders.
  • invented or figurative name

Obviously the company name may not already be registered by another entity.

 

I presume that we would have to keep all our receipts on a monthly basis?

Yes

 

As we would both be working from home and not have business premises can we put internet and both our phone bills as business expenses or would we need to take out new services in the company name?

You will need to place any utilities or other services in the company’s name.

Related Services

37 Lawyers Offering Services in Spain

Testimonials for Business Services
  • Bryan Wilson
    Bryan Wilson, Mallorca

    Rosa has been an absolute Godsend and without her I would have struggled to set up my Mallorcan company.


    She has always delivered with any project that I have instructed her services on and I would highly recommend her.


    Apr 03, 2019
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    Andrea Omahony, Murcia

    Inma was fabulous. She was extremely professional and she answered any questions efficiently and accurately.


    Apr 01, 2019
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    Lara, Turin

    My contact in Italy, Ilaria, was SO helpful and responsive. 100%recommend


    Jan 04, 2019
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    Nick Nicolaou, Oviedo

    Very Satisfied with Miguel's work. He was very helpful and we would definitely use his services again in the future.


    Feb 20, 2018
  • Gavin Jones
    Gavin Jones, UK

    It was a real pleasure to have Miguel working on my behalf to file my non-resident taxes. He was extremely helpful, gave reassuring advice and I had a high level of confidence in the transactions.


    Miguel is now acting as my fiscal representative in Spain and I plan to continue to use his firm's services for all my tax requirements.


    Feb 19, 2018
  • Alan Villarreal
    Alan Villarreal, Banyoles

    Very satisfied with Anna's work. She is bilingual and was extremely helpful. Will definitely use her services in the future.


    Dec 15, 2017
  • Anthony Bennett
    Anthony Bennett, Barcelona

    Anna provided the best possible solution for me in my situation, and helped out as much as she possibly could.


    I would recommend her services to anybody seeking legal or financial advice.


    Oct 19, 2017
  • Robert Toth
    Robert Toth, Ireland

    Anna was very, very helpful, always happy to assist and also approachable and professional.


    I was very satisfied with the legal services.


    Feb 09, 2017
  • LP
    LP, Tenerife

    We used Rossana’s services multiple times after the first contact. She is always there when we need support, even for things that are not directly related with the services she was in charge of.


    Her charges are always very reasonable.


    Dec 06, 2016
  • P.T.
    P.T., Benalmadena

    All tax returns are handled online, so I don't need to go anywhere to accomplish my tax obligations in Spain. Although the service is provided mainly by internet, Jaime met me when necessary, and I can always contact quickly him or his team by phone, email, skype and even whatsapp.


    Jaime and his team have been really helpful during the setting-up process of my business.


    Jan 15, 2015
  • Hanna
    Hanna, Tarragona

    Since I am a foreigner, I can’t speak Spainish. My law firm provided me two lawyers – one speaks English very well and the other one is the expert in my case.


    They answered me very quickly, and handle my case in a very efficient way. Cannot find a better lawyer in Tarragona.


    Mar 29, 2014
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