HOW TO SET UP A COMPANY IN SPAIN AS A FOREIGNER?

Accelerate your business with these expert tips "How to start a company in Spain as a foreigner". Analyse and discover this TIP!

The steps that a resident in Spain must follow to legally set up a business in Spain are always the same, regardless of whether you are a foreigner or not. The only difference lies in the prior step that any non-Spanish non-resident will have to take: the need to become a legal resident in the country. Once you have obtained residence in Spain, the incorporation process changes depending on whether you are resident in Europe or outside Europe.

1. For citizens residents of the European Union with apply for the NIE (see TIP) and the EU certificate registration (see TIP) is sufficient for incorporation or self-employment.
2. In the case of citizens who non-EU countries You must have a work visa. Depending on the type of business you want to start, the corresponding residence card changes.

There are two types of visas

• The entrepreneur visa (+): if the business idea is to develop an innovative business with a high technological component, you should ideally apply for an entrepreneur visa. The requirements are strict but it offers many advantages: 

• • It must create jobs for the country, at least in the long term.
  • Submit a business and feasibility plan (see TIP).
  • Its operational process must involve a high level of technology.
  • It must provide patents (see TIP), letters of recommendation or clients.

 The process is quick and you can obtain the visa in 30 days if the project is accepted. Unlike the rest of the residence permits under the general law on foreigners, this visa grants the possibility to live in Spain for 2 years plus renewals (instead of only 1 year).

• The self-employed work permit. With this visa, you will be eligible to obtain the NIE (Número de Identidad Extranjero see TIP) essential for dealing with the tax authorities, social security, etc. and registering as self-employed.

In this link you have all the updated info (see+). Remember that by registering for the mentorDay acceleration programme (+) you will be able to complete your assessment report, which is absolutely necessary to apply for a visa.

Valuation report required for a foreigner to start a business in Spain

• More than 400,000 entrepreneurs (12% of all the self-employed in the RETA) are of foreign origin, i.e. they were born outside Spain and have managed to set up a company in Spain.
• Self-employment is the option chosen by many immigrants. Their business projects are very varied, ranging from street vending, creating online shops or setting up internet platforms. 
• Each and every one of the more than 400,000 foreign self-employed workers has had to go through the bureaucratic process that we are going to detail in this TIP, so be patient. It involves checking whether your project is viable, or what the Ministry of Labour, Migration and Social Security calls the assessment report.

The first step is to

1. Elaborate your business plan (see TIP).
2. Ask ATA to certify that your business is viable (mentorDay has a signed agreement with ATA).
3. Send the ATA viability certificate to the Ministry, as it is the Ministry that finally decides whether to grant authorisation or not.

The viability report is a document issued by the different self-employed organisations, including the National Federation of Self-Employed Workers' Associations (ATA), which lists the requirements that the person and the project must have in order to obtain the 'initial authorisation for temporary residence and self-employment'.

THREE KEY ASPECTS THAT A PROJECT MUST HAVE IN ORDER TO OBTAIN A FAVOURABLE REPORT:

• ESTIMATE THE INVESTMENT WELL:

The investment must be in line with the business you want to start up. Many entrepreneurs underestimate the investment required, for example, opening an online shop with a very low investment (2,000 euros). The amount has to be in line with the business you want to start up. For example, for street vending, an investment of only 3,000 euros is needed, while 200,000 euros is required to set up security systems on oil platforms. 

"...Copy of the documentation accrediting the sufficiency of the investment foreseen for the implementation of the project and the impact, if applicable, on the creation of employment, including self-employment...".

See more at this link (+)

• THREE-YEAR INCOME AND EXPENDITURE FORECAST

It is essential to make a good cash forecast (+) y, afterwards, economic and financial plan (see TIP).

These forecasts must be included by the entrepreneur in the report. In this way the ATA can see if the business is going to be sustainable and viable. It is necessary to be realistic in terms of the income and expenses expected to be obtained. When it comes to business models that are out of the ordinary, innovative, such as start-ups, you have to demonstrate that, when you arrive in Spain, you will have the necessary clients to obtain that income.

• BANK BALANCE

One of the key aspects to validate the project, the most important according to ATA, is that the entrepreneur has a bank balance to live in Spain with his or her own resources, covering both living expenses and housing. According to ATA, this is one of the aspects that most applicants do not meet.

OTHER ASPECTS MARKED IN THE REGULATIONS:

• In retail commercial activities and provision of the services listed in the Annex to Law 12/2012, which are carried out in permanent establishments, whose useful surface area is equal to or less than 750 square metres, responsible declaration or prior notification (in the terms of article 69 of Law 39/2015) and, where applicable, proof of payment of the corresponding tax. For other activities and the provision of professional services, a list of the authorisations or licences required for the installation, opening or operation of the planned activity or for professional practice, indicating the status of the procedures for obtaining them, including, where applicable, certificates of application to the corresponding bodies.
• Copy of the documentation accrediting possession of the training and, where applicable, the professional qualification legally required for the exercise of the profession, as well as the approval and/or recognition, and, where applicable, membership of a professional association, for the exercise of the profession in the case of regulated professions in Spain.

The business plan has to be drawn up by each entrepreneur, and by participating in mentorDay you can get a lot of help to complete it.  

PROCEDURE

Once they have the valuation report, foreign entrepreneurs have to follow a series of steps:

•  THE FIRST IS FOR ENTREPRENEURS WHO ARE OUTSIDE:

They must go to a Spanish consular office abroad to apply for authorisation. They need to present a series of documents such as a photocopy of their ID card or passport, a document that qualifies their training or experience, a validation report, etc. The resolution period is three months, according to the website of the Ministry of Labour, Migration and Social Security. The entrepreneur has one month to collect the visa from the office and to present the passport, criminal record certificate, medical certificate and proof of having paid the visa fee.

Once the entrepreneur has the visa, he/she has three months to come to Spain. Once in Spain, he/she has another three months to register as a self-employed person (both with the Social Security and the tax authorities). One month after registration, the now self-employed worker must apply in person for his or her Foreigner's Identity Card at the Foreigners' Office or Police Station in the province where the authorisation has been processed. If the authorisation has not been granted, the entrepreneur may appeal.

• THE SECOND OPTION IS FOR ENTREPRENEURS IN SPAIN:

For the many foreigners who are in Spain on a student visa and want to stay as self-employed workers. The process they have to follow is similar, they have to go to an Oficina de Extranjería and present the same documents. The most difficult thing in these processes is to be able to find a way to accredit and validate the training and experience to carry out the qualified activities they want to do, according to ATA.

WHAT ARE THE PROCEDURES NECESSARY TO SET UP A COMPANY IN SPAIN AS A FOREIGNER?

The formalities required to set up a company in Spain as a foreigner include obtaining a Foreigner Identification Number (NIE), obtaining an Empadronamiento Certificate, choosing a legal form, drafting the company statutes, opening a bank account and registering with the Mercantile Register.

WHAT IS A FOREIGNER'S IDENTIFICATION NUMBER (NIE)?

The Foreigner Identification Number (NIE) is a personal identification number given to foreigners in Spain. It is necessary to carry out any procedure related to the creation of a company in Spain.

WHAT IS THE REGISTRATION CERTIFICATE?

The Certificado de Empadronamiento is a document that certifies that the person is registered in a municipality in Spain. It is necessary to obtain the NIE and to carry out any other procedure related to the creation of a company in Spain.

WHAT LEGAL FORMULAS EXIST FOR SETTING UP A COMPANY IN SPAIN?

The legal forms that exist for setting up a company in Spain include the Sociedad Limitada (SL), the Sociedad Anónima (SA), the Sociedad Cooperativa (SCoop), the Sociedad Civil (SC) and the Comunidad de Bienes (CB).

WHAT IS THE COMMERCIAL REGISTER?

The Mercantile Register is a public register where all companies and trading companies are registered. It is necessary to register the company in the Mercantile Register in order for the company to be able to operate legally in Spain.

WHAT FORMALITIES ARE REQUIRED TO OPEN A BANK ACCOUNT?

The formalities required to open a bank account include obtaining the NIE, the Certificado de Empadronamiento and the company statutes.

WHAT TAXES DO COMPANIES HAVE TO PAY IN SPAIN?

Companies in Spain have to pay corporate income tax (IS), value added tax (VAT) and income tax withholdings.

WHAT ARE THE ADVANTAGES OF SETTING UP A COMPANY IN SPAIN?

The advantages of setting up a business in Spain include a stable and diversified economy, a transparent legal system, an advanced infrastructure, a highly skilled workforce and a strategic geographical position for international trade. In addition, there are a wide range of tax and financial incentive programmes available to companies setting up in Spain.