Starting a new business is no small decision. Whether it’s your first company or your twentieth, there is always a lot to take into account and a number of legal hoops you have to jump through.
Spain’s something of a prima donna when it comes bureaucracy. There’s a lot of it and you have to do it right. Our intention is to guide you through the process of starting a limited company in Barcelona as simply as possible.
Step 1: Make sure your paperwork is up-to-date
Before you try to set up a company, you need to have all your personal paperwork up-to-date. Expats living in the country will need to have a NIE number, a social security number, and be registered as Autonómo (freelancer).
It’s perfectly legal to work as a freelancer and run your business that way. However, as you expand, progress or bring on partners you may want to set up a limited company.
For helpful guides for these process, please refer to the the following websites:
Step 2: Get a Gestor
A good gestor is akin to an accountant but with all-round knowledge of your tax and financial obligations. They will help register you for various appointments, do you legal and financial paperwork, tell you what you need to do and when to do it, and be your representative in the tax office.
While you can expect to pay anything from €100 to €200 per month for their services (more if you want an English language service), the time, stress and fines they save you is invaluable. The costs are also tax deductible, so be sure to ask your new gestor about that too!
Of course, this is an optional step, but business people all over the country will all nod in agreement: gestors are life-savers. If you shell out for only one thing in your startup’s early stages, shell out for this. Just make sure to find a gestor’s office that comes with recommendations.
Step 3: Check your business name is available
As a safeguard against setting up a company with a name that’s already been used, you are obliged to check the Registro Mercantil (Mercantile Register). You can visit the website in English and search for your proposed company name. If it’s not there, you are free to submit an application. This will officially confirm that your company name is available and, for a small fee, you will reserve it for a period of six months.
Step 4: Open a business bank account
Before you do anything else, you will need to open a bank account. Shop around the different banks to see which offers the best conditions.
You will need to deposit a minimum of €3000 in order to open an account for a Sociedad Limitada (limited company). On depositing, you will receive a certificate that confirms you have done so. The time this takes will depend on the bank you use.
Step 5: Get a temporary tax number
Now you’ll need to get a temporary tax number (NIF) from the Hacienda (Tax Office). You will have to show you have your certificate from the from Registro Mercantil a business address and your identity documents.
Visit the AEAT website to do this. Your gestor will also help you.
Step 6: Sign an incorporation deed
The Escritura de Constitución (Deed Of Incorporation) is a legal document that outlines your business partnership agreement, the number of shares each partner gets and other conditions.
According to Spanish law, you must sign this with your partners in front of a Notario (notary). In order to do this, you will need the certificate from Registro Mercantil that shows you have reserved the business name, the provisional NIF and the bank certificate showing you have deposited the €3000.
Speak to your gestor to help you set this up. Expect to pay the notario around €400 on average plus IVA.
Step 7: Pay some taxes
Remember that €3000 you deposited in your business account? It’s now time to pay a 1% tax on it. The Asset Transfer Tax must be paid within 30 days of signing the Escritura de Constitución (which you must show along with your temporary NIF).
Step 8: Officially register your company
It’s time to head back to the Registro Mercantil and off load all your paperwork. You have to take documents to show you have paid your asset transfer tax, your Escritura de Constitución, and the business name certificate.
At this point you will have run the bureaucratic gauntlet. Along the way you most likely experienced delays, contradictions and mistakes from various offices, banks and civil servants. But breathe deeply. Take advice and help from your gestor and be persistent if and when things go wrong. It will all be worth it in the end and you will have a new legal business, ready to trade and take on your next challenge.