Background

Business in Spain

Spain has improved conditions for doing business here. With the crisis behind, the country’s economy has now stabilized and the percentage of foreign entrepreneurs is constantly growing. According to modern laws, both a resident and a non-resident can open a business in Spain. The procedure for the registration of a new company is not complicated by unnecessary bureaucratic delays. The most important factor for doing business in Spain is also stability and a good economic outlook. In addition, the opening of a business and the creation of new jobs in Spain, gives foreigners the opportunity to obtain a residence permit.

The economy of Spain in 2018 grew by 2.5%. This indicator is higher than the EU average. For example, Germany’s GDP in the same year was 1.5%. The high growth rate, according to experts, will continue in the coming years, although, subject to the global economic process, it may slow down somewhat.

Pros of doing business in Spain

  • Stability of political and economic systems
  • Simplicity of the new business registration procedure
  • Favorable conditions for small and medium-sized businesses

What types of companies exist in Spain?

S.A. (Sociedad Anonima) – an analogue of the Russian joint-stock company (joint-stock company). S.A. implies the presence of a large number of shareholders. Minimum Authorized Capital S.A. is 60,101.21€ (euros). When registering a company type S.A. it is enough to put 25% of the authorized capital into the current account of the company. To manage this type of company, special procedures are envisaged that protect the rights of founders, for example, the convening of mandatory shareholders meetings, which is carried out through publication in the press and in the Official Gazette of the Trade Register. S.A. unlike S.L. may issue bonds and other securities.

S.L. (Sociedad limitada) – an analogue of the Russian LLC (limited liability company). S.L. has one or more owners and, compared to S.A., a simpler management scheme. The authorized capital is 3,006.06€ (euros), and this amount must be received in full by the company account. Company S.L. cannot issue bonds; contributions of co-founders are not quoted on the securities market.

These two types of companies are the most common in Spain. Both companies have a limited liability, which is within the limits of the co-founders’ contributions to the authorized capital, and pay the same taxes.

What you need to open a business in Spain

  • To register a company in Spain, you do not need a residence, but you will definitely need a NIE – tax number of a foreigner.
  • A non-resident cannot be the manager of a company established in Spain. Accordingly, to manage the company, it will be necessary to conclude an agreement with the resident manager or the management company (gestor / gestoria).
  • Account in a Spanish bank. To register a company, it is necessary to deposit authorized capital in accordance with the type of legal entity (S.A. or S.L.).
  • Preparation of constituent documents, which contain information about the charter of the enterprise: the name and address of the legal entity, the procedure for managing its activities and other information.
  • Notarization of constituent documents.
  • Payment of the tax for establishing a company in the amount of 1% of the authorized capital.
  • Registration of an enterprise in the Chamber of Commerce of Spain and entry in the State Commercial Register.
  • Obtaining a CIF tax number.
  • Payment of municipal taxes and fees.

The three most common forms of starting a business in Spain are:

  1. Opening a new enterprise
  2. Buying a finished business
  3. Opening a franchise company

What business to open in Tenerife

Preferential taxation in the Canary Islands is a special tax system created to promote economic development in the Canary Islands. This measure is designed to support entrepreneurs in the region and compensate for difficulties that may arise due to remoteness from European markets.

The income tax rate for enterprises (Impuesto sobre Sociedades) in the Canary Islands is 4%, subject to the creation of jobs and minimal investment. Outside the preferential zone, this rate is 25%. Income tax and income tax benefits create a very favorable investment climate in the Canary Islands.

The Canary Islands have the status of a Special Economic Zone with a low tax rate since 2000. The measure is set for a period until December 31, 2019 and can be extended by the European Commission.

Promising types of business in the ZEC zone (Special Economic Zone)

Canary Islands tax credits cover a wide variety of business activities: industry, services, and trade. Nevertheless, there are several sectors that represent promising business niches, whose development is particularly welcome in the Canary Islands, as it has great potential for the modernization of the region.

  • Tourism: tour operators and travel agencies, booking and excursion services, production of all types of tourism products for hotels and restaurants, expansion of the leisure niche, maintenance of entertainment complexes, etc.
  • Enterprise service and outsourcing: consulting and enterprise management, engineering, architecture, design, marketing and communications.
  • Digital technologies: software, computer science, data processing, Internet technologies.
  • Transport: storage and delivery of goods.
  • Marine sector: repair, maintenance, transport, logistics, supply, etc.
Background

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