Start Up Law
Founding a company in Spain
If you want to successfully establish and run a business in Spain, expert legal and tax advice is a must.
As an international law and tax firm, we are a reliable contact for entrepreneurs who want to establish themselves in Spain and for those looking for on-site legal advice in English, German, Spanish or Catalan on an occasional or permanent basis.
Establishing a company in Spain
Incorporating a company is an alternative if you do not plan to exercise your activity as an individual entrepreneur or self-employed (autónomo).
In Spain, as in many foreign countries, companies differ in terms of (personal) liability, capital requirements, and organizational structure.
Setting up a company involves several formal processes. Therefore, we support you in:
- choosing the right legal form of incorporation
- registering the company name in the Central Mercantile Register (RMC)
- the process of incorporation of the company (e.g., articles of association and notarial deed of incorporation)
- application for the company’s tax identification number (CIF/NIF) and sales tax identification number
- tax registration of your company
If necessary, we can act as your tax representative or agent and take care of all company tax matters, including accounting, payroll, payslips, employment contracts, and drawing up financial statements.
Counting on expert legal and tax advice on-site when establishing your company or branch in Spain will give you peace of mind. Only professional support in English will help you avoid legal problems, tax issues, and language barriers.
Buying an existing company in Spain
Acquiring a company can be faster than founding one since you can complete the necessary formalities and start business operations more quickly.
However, acquiring an existing company entails risks for the buyer, as it is almost impossible to rule out that it has already incurred liabilities.
We’ll be happy to analyze your case and support you, whether buying an existing company or starting your own business.
Subsidiary, branch, or office in Spain
There are three ways a foreign company can do business in Spain. From a legal, practical, and tax point of view, this can be done via an independent Spanish subsidiary, a Spanish branch, or a representative office in Spain.
If you decide to start operations through a subsidiary, you should know it has its own legal personality, independent of the parent company. The Spanish subsidiary can exist in all legal forms, such as a Spanish limited liability company (Sociedad Limitada or S.L.) or a public limited corporation (Sociedad Anónima or S.A.). The parent company or its shareholders usually owns the shares of the subsidiary.
If the activity is carried out through a Spanish branch, it’ll not be a separate legal entity. As a result, the company name of the branch is identical to that of the parent company. However, the Spanish branch can be registered in the Mercantile Registry as a subsidiary in Spain.
A representative office of a foreign company in Spain is only a minimal structure that cannot carry out business in Spain by itself.
We will be happy to advise you on which form is the most convenient for you and support you in setting up your subsidiary, branch, or representative office in Spain.
Entrepreneurs or self-employed (autónomos)
Self-employed people are generally referred to as “autónomos” in Spain. To become self-employed in Spain, you first need a Spanish foreigner identification number (Número de Identidad de Extranjero, or NIE for short) or a Spanish tax number.
You then have to notify the tax office what type of activity you’re carrying out and where. You must report whether the exercise of the activity leads to the obligation to submit certain tax returns (such as advance VAT returns, tax returns on tax deductions). When registering, you can also apply for an intra-community VAT identification number.
Entrepreneurs also have to register with the Spanish Social Security (Seguridad Social) and pay a monthly social security contribution (cuota de autónomo) when starting self-employment in Spain.
The amount of the social security contributions is independent of your income. If you are self-employed for the first time in Spain or have not been registered as such in the last two years, you can apply for a discount on social security contributions for a few months after starting your activity (tarifa plana).
In that way, the social security contributions are reduced to a flat rate of 80 euros per month in the first 12 months. The contributions increase over the next two years until they are due in full from the 37th month after starting the business. The discount is intended to help entrepreneurs and provide a certain amount of start-up assistance.
At Dr. Hohne, we’re ready to support you with all matters related to self-employment in Spain.
Investments in Spain
Individuals who participate as shareholders, partners, or investors in a company in Spain need a Spanish tax identification number (NIE). Also, persons holding positions in a Spanish company (S.L., S.A.), such as managing directors or board members from abroad, must have an NIE.
If you plan to invest large sums in Spain (e.g., in companies), it may be necessary to notify the competent authority. In the case of larger transfers from abroad to Spain, it is also possible that the Spanish credit institution requires proof of the origin of the funds as part of its obligations to prevent money laundering. If you don’t present the evidence in such a case, the bank may, in extreme cases, freeze the amounts until you provide proof of origin.
Advice and support for companies in Spain
Not only companies that want to settle in Spain need competent legal and tax advice on-site. Even existing companies are often confronted with legal questions or disputes regarding Spanish law or have to deal with the Spanish tax authorities.
Especially in injunctions, it’s essential to count on expert legal support in your language. Your lawyer should speak your language, so the legal and tax situation is always fully communicated and understood.
Advice in your language guarantees no misunderstandings with authorities, opponents, or courts.
As an international law firm with over 20 years of professional experience, we avoid language barriers by providing fluent advice in English, Spanish, Catalan, German, and French.
We are available for companies and entrepreneurs from the UK and European countries in Spain to provide support and advice in the following areas:
- Contract law
- Review, preparation, and negotiation of contracts and general terms & conditions (GTC) as well as cancellation policy
- Enforcement of contractual claims
- Defense against unjustified claims from contractual partners
- Corporate law
- Drafting of bylaws
- Shareholder agreements, participation agreements, company acquisitions, and company sales
- Employee participation
- Tax law
- Holistic tax support for companies in Spain, including bookkeeping, payroll accounting, payslips, employment contracts, and drawing up financial statements
- IT and e-commerce
- Advice on legal transactions on the Internet
- Legal requirements for websites
- Advice on information and notice obligations for websites and online sales, taking into account the data protection requirements.
- Foreclosure proceeding
- Foreclosure from national and foreign titles such as court judgments, notarial deeds or enforcement notices.
- Procedural law
- Out-of-court and judicial representation in the enforcement of claims.