A guide to starting a business in Spain

Step one: can you legally work in Spain?

Before you start designing logos or ordering business cards, you need to check you are actually allowed to work in Spain.

Alex explains:
"First of all, you've got to make sure that you're allowed to work in Spain, that you've got the appropriate visa, or you've got residency here in Spain and you're allowed to work."

• EU citizens can move straight into self-employment or company setup.

• Non-EU citizens, including Brits post-Brexit, need the right visa first. This could be a business visa through your local Spanish consulate, or another residency route that grants work rights.

Check out our complete guide to Spanish visas for more information.

When to upgrade to a limited company (Sociedad Limitada)

The jump from freelancer to limited company is not about vanity, it is about scale.

According to Alex:
"Then as your business grows… typically once you get to around billing of or gross income of around €100,000, that's when we recommend that you would open and incorporate a Spanish company known as a Sociedad Limitada (SL)."

The SL is Spain’s most common limited company. It protects your personal assets if the business runs into financial trouble and is usually the next step for expanding businesses.

Becoming self-employed (autónomo)

For many people, the simplest way to start is to register as self-employed (autónomo).

As Alex puts it:

"Typically speaking, we'd say you'd start off as an autónomo, as someone who's self-employed. Obviously, you register with Social Security, and you pay Social Security once a month."

The basics are straightforward:

• Register with the Spanish Tax Authority (Agencia Tributaria).

• Register with Social Security.

• Submit quarterly VAT (IVA) and income tax returns.

Alex also advises getting professional support:
"You will also basically require an accountant to submit your quarterly income returns and your quarterly IVA/VAT returns."

Setting up a limited company in Spain

Alex explains the process in detail:

"We would apply for company names on your behalf. Once you've got the company names, we would go along to the notary, you would let us know who the directors are, who the shareholders will be, what the registered office is, and what the objects of the company will be. The shareholders and directors would sign the incorporation of the company, and then that company gets registered at the company's house."

Key facts to know:

• Timeframe: "That process can take anywhere between four and eight weeks."

• Costs: "I'd say you're looking at anywhere between €1,800 and €2,800, depending on the complexity of the company."

• Ongoing obligations: "Remember, once you've incorporated the company, you also need an accountant to submit those quarterly returns for you and annual returns."

If you are unsure how the Spanish tax system works, take a look at our guide to Spanish taxes for more detail.

Benefits of running a business in Spain

Yes, there is bureaucracy. But there are plenty of upsides too. Spain has:

• A large international market needing niche services.

• A lower cost of living compared to many Western countries.

• A climate that makes even paperwork days more bearable.

In short, it is a place where lifestyle and business can work hand in hand.

Buying an existing business

Some people prefer to skip the setup process and buy an existing business instead. This can save time, but it is not without risk.

Make sure you:

• Check all licences and permits are valid.

• Review the brand, contracts and accounts.

• Confirm there are no hidden debts.

Once you are satisfied, you can register the change of ownership at your local town hall and prepare for tax registration.

Read our advice on finding a good property lawyer in Spain to make sure you have the right legal support for this step.

Other business structures

Spain also offers other options:

• Sole trader (empresario individual) or partnership (sociedad civil). These are quick and cheap to set up but make you personally liable for debts.

• Non-profits (fundaciones and asociaciones). Great for social projects, though a fundación requires €30,000 starting capital.

The cultural side of business

Remember that business culture in Spain may not match what you are used to. Expect:

• More flexible attitudes to deadlines.

• Longer lunch breaks that shape the working day.

• A highly social approach to networking.

The laid-back rhythm can feel unusual at first, but it is also part of the charm.