Your own company no1

Your own company no1
Starting a business, catering in Spain Starting a business, catering in Spain. Do you have plans to move to Spain and start your own business? Or do you already live in Spain and are you going to start or take over a company?

Starting a business in Spain

Find the necessary information here to orient yourself on your future entrepreneurship. If you want to start a bed and breakfast in Spain, check out our special page for this.

The different company forms in Spain

If you want to start your own company in Spain and you are not taking over an existing company, you will first have to make a choice about the company form.

Comerciante individual or Autónomo = Sole proprietorship
Comunidad de Bienes = Community of goods
Sociedad Civil = Civil partnership
Sociedad Regular Colectiva, S.R. or S.R.C. = general partnership
Sociedad en comanditaria = Limited partnership
Sociedad Limitada, S.L. = Private company (BV)
Sociedad Anónima, S.A. = Public Limited Company (NV)
Liability

In the first five business forms mentioned, the entrepreneur himself is personally liable. In private and public limited companies, where there is limited liability, such as S.A. or the S.L., liability only applies to the paid-up capital.

Pay taxes

In the first five business forms mentioned, the entrepreneur himself pays the tax on the profit made through income tax. At the S.L. and S.A. you pay corporate tax (Impuesto sobre la renta de sociedades). Corporate taxes in Spain will be gradually reduced by 1 percent every year between 2007 and 2011. This reduction will go from 35 percent in 2007 to 30 percent in 2011. Most deductions will be deleted. For small and medium-sized businesses, the rates will be reduced from 30 to 25 percent. After deductions, small and medium-sized organizations pay on average between 24 and 26%. An entrepreneur or self-employed person must file a tax return every quarter and make advance payments on the estimated amount of tax he owes for that year.

VAT. (Impuestos sobre el Valor Añadido, IVA)

The standard rate is 18%. A rate of 8% applies to some services and foodstuffs. On the Canary Islands the rate is 5% (IGIC).

Start-up capital

To set up an S.A. a minimum capital of approximately 60,000 euros is required, of which 25% must be paid upon incorporation. Are you going to get an S.L. (B.V.) requires a starting capital of approximately 3,000 euros.

What Should You Do Before Starting a Business?
Register the company name with the central trade register (Registro Mercantil Central).
Drawing up a deed of incorporation (escritura de constitución) before a notary established in Spain.
Registration with the Spanish Trade Register (Registro Mercantil). This is not mandatory for sole proprietorships.
Apply for a VAT number (Código de Identificación Fiscal, CIF) at the district office of the Spanish tax authorities (Delegación de Hacienda of the Agencia Tributaria).
Renting or buying a commercial building. Check with the municipality (Ayuntamiento) to ensure that the zoning plan does not cause any problems. When purchasing the building, the official deed drawn up by the notary must be registered in the Property Register (Registro de la Propiedad Inmobiliaria) and declared to the provincial tax authorities (Delegación Provincial de Hacienda).
To build or renovate commercial buildings, you must apply for a building permit (Licencia de Obras) from the municipality.
Apply for a business permit (Licencia de actividades e instalaciones) from the municipality (Ayuntamiento). After the permit has been granted, an inspection by the municipality follows to determine whether the movable property such as machines, etc., corresponds to the information provided in the application. If everything is in order, a deed of approval is issued (Acta de Ocupación y Funcionamiento). This procedure can take up to 3 months.
Registering the business activity and paying taxes (Impuesto sobre Actividades Económicas).
Hiring staff and arranging employment contracts. The registration of employees’ social security at the provincial branch of the Ministry of Social Affairs (Tesorería Territorial de la Seguridad Social).
If you start as a small self-employed person (Autónomo), you must register in a special register (Régimen Especial de Trabajadores Autónomos) at the Tesorería Territorial de la Seguridad Social).
Legalization of the Commercial Books (Legalización de los Libros de Comercio) in the Commercial Register (Registro Mercantil).
Starting a catering business in Spain

To open a catering business, you must apply for two additional permits, depending on regional laws and regulations. Please inquire about this with the relevant person