A Step-by-Step Guide for Foreign Entrepreneurs
Spain’s vibrant economy, strategic location, and welcoming business environment make it an attractive destination for international entrepreneurs. Whether you’re planning to launch a tech startup in Barcelona, open a restaurant in Madrid, or establish a consulting firm, understanding the legal and administrative requirements is crucial for success.
At Yodha Legal, we’ve guided countless foreign entrepreneurs through the process of establishing their businesses in Spain. Here’s your comprehensive roadmap to turning your business dreams into reality.
Choosing the Right Business Structure
The first major decision you’ll face is selecting the appropriate legal structure for your business. The two most common options for foreign entrepreneurs are:
Sociedad Limitada (SL) – Limited Liability Company
The SL is Spain’s most popular business structure for small to medium-sized enterprises. It offers:
- Limited liability protection – Your personal assets are separate from business debts
- Minimum capital requirement – Just €3,000 (which can be contributed in cash or assets)
- Professional credibility – Companies often prefer working with SLs over sole traders
- Tax flexibility – Ability to optimize tax strategy as your business grows
- Ease of bringing in partners – Share structure makes it simple to add investors or co-founders
Best for: Businesses with growth ambitions, those seeking investment, or entrepreneurs who want to limit personal liability.
Autónomo (Self-Employed/Freelancer)
Registering as an autónomo is the simplest way to start working independently in Spain. Key features include:
- No minimum capital – Start with whatever resources you have
- Simple administration – Less complex accounting and reporting requirements
- Quick setup – Can be registered in just a few days
- Lower initial costs – No notary or commercial registry fees
Best for: Freelancers, consultants, small-scale service providers, or those testing a business idea before committing to a full company structure.
The NIE: Your Essential First Step
Before you can do anything business-related in Spain, you need a NIE (Número de Identificación de Extranjero) – your foreigner identification number. This unique number is required for:
- Opening a bank account
- Registering your business
- Signing contracts
- Paying taxes
- Buying or renting property
The NIE application process varies depending on whether you’re currently in Spain or abroad. For those already in Spain on a valid visa, the process typically takes 2-4 weeks. If you’re applying from your home country, you’ll need to visit the Spanish consulate.
Understanding Visa Requirements for Entrepreneurs
Many foreign entrepreneurs ask: “Can I move to Spain to start a business?” The answer depends on your nationality and circumstances.
For EU/EEA/Swiss Citizens
You have freedom of movement and can start a business in Spain without special permits. Simply register your residence and proceed with business formation.
For Non-EU Citizens
You’ll typically need one of the following:
Entrepreneur Visa – Designed specifically for those starting innovative businesses in Spain. Requirements include:
- A detailed business plan demonstrating innovation and economic interest
- Proof of sufficient financial resources
- Relevant professional qualifications or experience
Self-Employment Visa (Cuenta Propia) – For those planning to work as autónomos. You’ll need to demonstrate:
- Professional qualifications or expertise in your field
- Sufficient capital to establish and sustain your business
- Economic viability of your business plan
Digital Nomad Visa – If you’re running an existing remote business or working for foreign clients, this new visa category might be ideal.
Our team can help you determine which visa route best fits your business model and prepare a compelling application.
Step-by-Step Business Formation Process
For Sociedad Limitada (SL)
1. Reserve your company name (1-3 days) Check availability through the Central Commercial Registry (Registro Mercantil Central) and reserve your preferred name. Choose something unique that reflects your brand.
2. Open a business bank account (3-7 days) Deposit the minimum share capital (€3,000) into a Spanish bank account in the company’s name. You’ll receive a certificate of deposit needed for the next steps.
3. Draft company bylaws (1-3 days) Create your estatutos sociales (company bylaws), which outline ownership structure, management rules, and operating procedures. We can draft these documents to ensure they’re legally compliant and protect your interests.
4. Sign deed of incorporation before a notary (1 day) All founding partners must appear before a Spanish notary to sign the escritura de constitución (deed of incorporation). If you can’t attend in person, you can grant power of attorney to a representative.
5. Register with the Tax Agency (1-3 days) Obtain your company’s CIF (tax identification number) from the Agencia Tributaria within 30 days of signing the deed.
6. Register with the Commercial Registry (2-4 weeks) File your deed of incorporation with the local Registro Mercantil. Once registered, your company officially exists as a legal entity.
7. Register with Social Security (immediate) As soon as you start working for your company or hiring employees, register with the Social Security system and begin making contributions.
Total timeline: Approximately 6-8 weeks from start to finish, assuming no complications.
For Autónomo Registration
The process is significantly simpler:
1. Obtain your NIE (if you don’t already have one)
2. Register with the Tax Agency – Submit Form 036 or 037 declaring your business activity and tax obligations
3. Register with Social Security – Enroll in the Special Regime for Self-Employed Workers (RETA) and choose your contribution base
4. Register with local authorities – Depending on your activity, you may need municipal licenses or permits
Total timeline: 1-2 weeks
Ongoing Obligations and Compliance
Starting your business is just the beginning. To stay compliant with Spanish law, you’ll need to manage:
For SL Companies
- Annual accounts – Prepare and file financial statements within 6 months of year-end
- Corporate tax returns – Submit Impuesto de Sociedades (generally 25% on profits)
- VAT declarations – Quarterly IVA filings if your revenue exceeds thresholds
- Annual corporate meeting – Hold and document an annual general meeting
- Social Security contributions – Monthly payments for yourself and any employees
For Autónomos
- Quarterly tax filings – Personal income tax (IRPF) and VAT declarations
- Annual tax return – Comprehensive income tax filing by June 30
- Social Security contributions – Monthly payments (currently minimum ~€294/month)
- Invoicing requirements – Proper invoice formatting and record-keeping
Common Challenges and How to Overcome Them
Language barriers – Spanish authorities primarily operate in Spanish (or Catalan in Catalonia). Having bilingual support is crucial for understanding requirements, deadlines, and correspondence. Our multilingual team bridges this gap seamlessly.
Understanding tax obligations – Spanish tax law is complex, with different rules for residents vs. non-residents, various VAT rates, and deductible expenses. Professional accounting support isn’t optional—it’s essential for avoiding penalties and optimizing your tax position.
Banking difficulties – Many Spanish banks are hesitant to open accounts for newly arrived foreigners without significant documentation. We maintain relationships with business-friendly banks and can facilitate introductions.
Licensing and permits – Depending on your industry, you may need additional permits (health certificates for restaurants, professional licenses for certain services, etc.). We help identify exactly what you need for your specific business activity.
Costs to Budget For
SL Formation Costs
- Notary fees: €200-400
- Commercial Registry: €150-300
- Company bylaws drafting: €300-600
- Minimum share capital: €3,000
- Legal/administrative assistance: €800-2,000
Total initial investment: Approximately €4,500-6,500
Autónomo Setup Costs
- NIE application: €10-15
- Administrative gestoría fees: €50-150
- Municipal license (if required): €100-500
- Professional assistance: €300-800
Total initial investment: Approximately €500-1,500
Monthly Operating Costs
- SL: Social Security (~€294+), accounting (€100-300), tax advisor (€150-400)
- Autónomo: Social Security (~€294), accounting (€50-150), tax advisor (€80-200)
Why Professional Support Makes the Difference
While it’s technically possible to handle business formation yourself, the reality is that Spanish bureaucracy can be overwhelming, especially when you’re navigating language barriers and unfamiliar legal systems. Small mistakes—like missing a deadline, filing incorrect forms, or misunderstanding tax obligations—can result in fines, delays, or even visa complications.
At Yodha Legal, we provide end-to-end support for foreign entrepreneurs:
✓ Business structure consultation – We analyze your specific situation and recommend the optimal structure
✓ Complete formation services – From name reservation to final registry, we handle every step
✓ Visa and immigration support – Integrated assistance ensuring your business formation aligns with your residence status
✓ Ongoing compliance – Accounting, tax filing, and legal support to keep your business running smoothly
✓ Multilingual communication – Services in Spanish, English, Hindi, Punjabi, and Urdu
Ready to Launch Your Spanish Business?
Your entrepreneurial journey in Spain starts with proper planning and expert guidance. Whether you’re ready to register your business today or still exploring your options, we’re here to help.
Schedule your free consultation to discuss your business goals, understand your requirements, and receive a customized roadmap for success.
Call us: +34 937000101 or +34 667396634
Email: info@yodhalegal.es
Visit us: Calle Pelai 12, 3D, Barcelona
Spain welcomes ambitious entrepreneurs. Let’s make sure you start on the right foot.
This blog post provides general information about starting a business in Spain and should not be considered legal or tax advice. Laws and procedures may change. For guidance specific to your situation, please consult with our legal and business advisory team.
English 
Spanish