Is it Easy to Start a Business in Spain?

No. It is not easy to start a business in Spain. It is a long and arduous process that requires many bureaucratic steps that can wear down even the most enthusiastic entrepreneur.   

I decided to start a business way back in 2006. I was self-employed at the time and a business opportunity presented itself and I needed to sub-contract to help with the extra work.

I didn’t have to start a ‘Sociedad Limitada’ as it is called here but I was advised that it was the more professional thing to do. 

So I scraped together the minimum amount of capital needed – €3000 – came up with a company name, and told my ‘gestor’ (the person that does all the paperwork) to set the process in motion. 

I can’t remember exactly how long it took to get everything up and running but I don’t think it was less that 3 weeks. 

I didn’t have any permits or licences to worry about. All I needed was a NIF (número de identificación fiscal) so that I could legally invoice. 

All in all there were about 7 steps required. I will list them below. 

SPAIN IS NOT A COUNTRY OF ENTREPRENEURS

Even Spanish people admit that there is not really an entrepreneurial culture  in Spain. 

It is better now than it was before but many people still prefer the security of working for the government or in a big company. 

This makes sense because it is all about job security. The economy is prone to severe downturns so better to get something secure. 

The are also many big players in the Spanish market and they don’t want extra competition. If you don’t believe me, read this article. 

The government doesn’t make it easy for people to start their own businesses either. Why? Hard to know. My guess is that it is to look after the monopolies.  

You would think that it would be the government’s number one priority in a country where unemployment rates often hit 20%. 

You only have to look at this ranking to see that it is not easy.  

Spain comes in at position 28 in the Ease of Doing Business Ranking. 

You might think that position 28 out of 180 is not too bad. Look closely and you will see that this is not the case. 

For example, to open a business Spain ranks at position 82. If you have to get construction permits, it sits at number 123. 

However, because it is in the EU, Spain is number one at trading across borders. This brings the overall average down to 28. 

But how can you trade across borders if it takes you longer to get electricity and you have trouble accessing credit?

THE STEPS TO OPENING A BUSINESS IN SPAIN

If you are hell-bent on opening a business, these are steps needed to open a limited company in Spain. 

1. Register a business name

2. Open a company bank account to deposit €3000

3. Sign the deeds of incorporation before a notary

4. Pay the transfer tax (1% of social capital)

5. Sort out the tax side at Hacienda (NIF, IAE, Censal)

6. Register the business

7. Get your definitive NIF

You can read a more detailed version in English here, and in Spanish here. 

On top of the €3000 you will need to take into account notary and gestor fees. As well as other payments like the Corporate Registry (Registro Mercantil). 

Here are a couple of Gestorías that I trust to get the job done. Mention my name and they might give you a special rate. 

Gestiauto Tramitaciones  ask for Sergio

Mi Consultoría  ask for Manuel. 

They will get you started in no time. 

SHOULD YOU OPEN A BUSINESS IN SPAIN?

There is no easy answer to this question. If you are thinking of coming to Spain and work and, or open a business, I suggest you read this comment  I received on one of my videos. The last paragraph is interesting. 

“To work as “Autonomo” Self-employed in Spain you need to pay a monthly fee of minimum 275€, this is regardless of whether you are a Spanish National or a Foreign Resident.

I am in the same situation as Stuart, a foreign resident with no tax obligations  outside of Spain.

If you are “Autonomo” Self-employed, you only have benefits whilst you pay the 275€ per month. If you lose you job, you do not have the right to “Paro” or any other social benefits referring to loss of employment.

As well as, only the last 15 years worked compute for a state pension.

However, if you are unemployed with no access to benefits because you had been working as autonmo you do have access to social benefits and lower taxes (IBI, basura,). You do have access if you are a Spanish National.

A Foreign Resident regardless of how much he has paid in to the Social Security doesn’t not qualify for these social benefits, specially if our children don’t have a Spanish passport, you get nothing.

I order to be treated as equal and have same rights as any other worker in Spain you need to be a Spanish National. The economic situation in Spain and the social security doesn’t allow to stretch the budget to cover all the needs of the Spaniards.

It is not only illegal immigrants that get refused social services but legally resident migrants with a proven work and tax track record. 

If you are not Spanish you don’t get it, full stop. In fact the staff at the social security/hacienda/extranjería will ask you why don’t you take the Spanish Nationality, you are entitled too they tell me.

Little do the know that the sun is brighter in my home country and no way in this world would give up my Swedish Nationality.

I would think twice about coming to Spain to work, it’s great for holidays in the sun but sacrificing your future and that of your family to live in the sun is nothing more that a nice dream.

Given the economic situation of Spain and what’s to come, it is not worthwhile moving to Spain unless you are wiling to take up Spanish Nationality.”

Carlos

So there you go. Make sure you weigh up all the pros and cons before deciding to embark on an entrepreneurial adventure here in Spain. 

Due the due diligence, make sure the Spanish market needs your service or you can provide and existing service better than the competition. 

If you have set up a successful business in Spain, I would love to get your input on the topic. 

Suerte!