In the «Ease of Doing Business» ranking, Spain takes 3rd place in Europe in terms of attractiveness for starting a business. No wonder that recently it has been one of the most popular countries for relocating a business or starting your own company. However, for all its appeal, the process is of course not without nuances and pitfalls. Dagmara Marciniak, an attorney in the corporate and commercial department of Giambrone & Partners, told a Realting.com reporter how non-EU residents can avoid unpleasant situations and what they need to do to make a business launch in this sunny country a success.

«The less infrastructure you need, the easier the relocation of your business will be»

— Dagmara, what are the most popular sectors for business relocation to Spain right now?

Lawyer Dagmar Marciniak— Of all the areas of business that choose to relocate now, the most popular are those that do not require a large infrastructure (offices, warehouses, etc.) For example, IT, consulting companies and others.

Such industries are also so popular because of the country’s burgeoning technology sector. As in the rest of the world, Spain has a very active IT sector. For example, in 2019, the ICT (information and communications technology) sector had a turnover of 120 billion euros, which equals 3.8% of Spain’s GDP. And, according to ICT Monitor, between June 2020 and June 2021, the IT sector grew by 18.8%, regaining its pre-pandemic position. 

Spain is cultivating the value of a digital business culture and doing its best to develop a relevant environment. This creates excellent business opportunities.  

— What else besides doing business is Spain attractive lately?

— Most of our clients say that one of the main advantages of Spain is its wonderful climate. However, beautiful nature and sunny weather almost all year round are not all the bonuses of this corner of the Iberian Peninsula. Other particularly enticing aspects include:

  • A health care system that is more efficient compared to the countries our clients come from. Spain boasts a robust public health system as well as affordable private insurance. 
  • A strategically attractive location for trade partnerships. Thanks to its good location, Spain has access not only to European markets, but also to markets in the Middle East and North Africa. The country has double taxation agreements with nearly 100 countries. 
  • International transport infrastructure. Spain has many airports that offer international flights. It makes it easier for employees and company managers to move anywhere. 
  • The cultural heritage and cuisine of Spain, which make it a very attractive place for foreign visitors. 
  • The kind attitude of the local people, which is accustomed to interacting with foreigners from all over the world and is known for its openness and friendliness. 
  • Spanish as a foreign language seems to many of our clients easier to learn than other European languages.

In fact, we can talk for hours about all of this. If anyone is interested in a particular aspect, we are ready to answer all questions in detail. 

«You can’t register a business in Spain without these documents»

— How is the procedure of registration of a business in Spain for non-EU residents? What are the key stages it consists of?

— The procedure depends on what scenario we are going for: whether we are transferring an existing business from a non-EU country, or creating a new enterprise in Spain.

The first option is the transfer of an existing business:

  • The main step here is to get and translate official documents related to business in a non-EU country. Without these documents, we will not be able to start the registration procedure in Spain. The documents must also be apostilled — a stamp certifying their authenticity and legality.
  • The second is to obtain an NIE number (Foreign Identification Number) for the person or persons who will be the directors of the company.
  • Next, we need to reserve the company name in the Mercantile Registry.
  • Then open a bank account to deposit the initial capital of the company (minimum €3,000 for limited liability companies). 
  • Only then does the registration process begin: we sign the memorandum of association and bylaws before a Public Notary in Spain, followed by the registration of the public deed at the Mercantile Registry.
  • The company is now considered duly registered in Spain. The only thing left to do is to notify the Spanish Tax Agency of the start of the business.

As a side note. If you plan to transfer employees from non-EU countries, it is necessary to obtain a work permit for each of them. For those employees who have moved to Spain, there is a simplified procedure. In this case, you must first set up a company in Spain and then apply for work permits for each of the employees moving.

Second scenario — creating a business in Spain from scratch

If you are a foreigner and want to set up a limited liability company in Spain, here is the path you will have to take:  

  • Obtain a foreigner’s tax identification number (NIE). You can apply for an NIE at the processing office for foreign nationals (Oficina de Extranjeros) at the Spanish national police station (comisaría).
  • Register your company name in the Mercantile Registry (Registro Mercantil Central or RMC). You must get a certificate confirming that this company name is not already occupied. You can do this yourself through the RMC website. The process takes about three days, after which you will receive an answer.
  • Open a commercial bank account with a Spanish bank. You will need to make a deposit of 3,000 euros. This is the least capital allowed when setting up a limited company. 
  • Sign the memorandum of association. Now you need to apply for a memorandum of association. This is an official document that contains the basic details of the company (name, address, details of directors, board members, shareholders, etc.). This step takes one to three days, depending on the notary. 
  • Register the company. Register the original memorandum of association with the tax authority of the local government. Then, take the document with the seal to the RMC, and it will be registered in the Spanish Registry of LLC. It takes about 15 days to register the transaction and return the original documents. Finally, you will need to return to the tax office to obtain a permanent corporate tax identification number (CIF).
  • Register with Social Security. As mentioned above, your company will need a tax number. You’ll need to fill out tax form 036; you can do this online or by printing it out at your local tax office. You can find information about the form, as well as download forms and links to fill in online at the Spanish Tax Agency (Agencia Tributaria).

— What bureaucratic difficulties and pitfalls can be encountered in Spain?

Difficulties will pass you by if you pay attention to certain nuances. Foremost, take your time with the documentation. Make sure it is properly prepared, translated and approved — otherwise moving your business to Spain is impossible. 

Another bureaucratic hurdle is getting an NIE number for the company director. For this, you need to make an appointment at the Office for Foreigners, which can take quite a long time. However, we offer our clients the service of obtaining an NIE number on an urgent basis.

Besides, it is necessary to make sure that all relocating employees have obtained the appropriate work permits. If the company hires them without these permits, government agencies can impose financial penalties on the company, as well as proceed to the forced closure of the company.

«If you can’t come — register remotely»

— Is it possible to start registering a business remotely? How can an attorney and your law firm help?

— Yes, it is possible. Many of our clients have «relocated» their business without visiting Spain. In this case, our client needs to obtain the appropriate power of attorney in their country of origin. We provide a bilingual draft of the power of attorney, which then needs to be signed and legalized by a Public Notary in your country. A power of attorney can also be issued at the local Spanish consulate. 

This power of attorney enables us to complete the entire registration process in Spain on behalf of our client: obtaining the NIE number, Tax Identification Number, signing the public deed before a Spanish Public Notary, registering the deed before the Mercantile Registry, etc.

— What bonuses does a client get when he comes to you at the initial stage of business registration?

— First, we inform clients about the steps of the registration procedure and the documentation that needs to be prepared. We also give them an approximate schedule of the registration procedure and the full cost (this includes our fees and expenses such as Public Notary fees, Mercantile Registry fees, etc.). And we also talk about the main tax obligations they should consider and answer any questions that arise.

— What interesting cases of registration of new companies have you realized recently?

— From late experience: we assisted a client from the Dominican Republic in transferring his business to Spain. The entire process was completed without him having to travel to Spain. The company was fully operational within 2 months of receiving instructions from the client.

In addition, in recent months, we have completed several relocation projects for software companies that were originally located outside the EU. 

In short, eyes fear — hands make. Take advantage of our guidance and open yourself up to new opportunities.