Setting up a business in Spain

Setting up your own business is the dream of many and the best option for the future for those who are motivated by professional challenges. Entrepreneurship requires a series of skills, characteristics and knowledge, which are not only learned through academic training but through real experience, which is why many of the most successful businesses are the fruit of several failures or learning experiences; depending on how you look at it.

The only thing you should be clear about before launching into the business world is how to open a company in Spain, in terms of legal requirements and terms. For the rest, it all depends on you and your good ideas.

Keep reading, in this post, we tell you everything about how to start a company from scratch!

Steps to follow to set up a business in Spain from scratch

• Define your business idea and study the market: Carry out an exhaustive analysis of the business environment to evaluate the viability of your project and the location you have chosen.
• Choosing the legal form: decide which legal form best suits your business model needs. This will affect legal and fiscal responsibilities, as well as partners and owners.
• Reserve the brand name in the Commercial Registry.
• Write the bylaws: in the case of companies, you must write the bylaws, which are the set of internal rules of your future company.
• Obtaining the tax identification number: request the company’s NIF from the Tax Agency.
• Contribution of the minimum share capital required to form the type of commercial company you have selected.
• Register your company in the Commercial Registry of the province in which you are going to establish the headquarters of your business.
• Register with Social Security: if you are going to hire employees, you must register as an employer with Social Security and also register your workers.
• Obtaining licenses and permits: Depending on your type of business and location, you may need to obtain specific licenses and permits, such as municipal, health, or environmental licenses.
• Patent your brand: If you want to protect your trademark, you can register it with the Spanish Patent and Trademark Office.
• Open a bank account in the name of your company to manage business transactions.
• Be careful not to break any tax rules!: you must comply with tax obligations, such as Corporate Tax or VAT, and keep adequate accounting records. When a company reaches a certain volume and begins to generate profits and project its business abroad, it is important to have the help of a tax professional, in this way, you will be able to develop your activity safely, avoid risks and take advantage of the regulations that benefit you the most.
• Hire business insurance and, if necessary, employees for your business.
• Finally, you can start operating your business according to your business plan and marketing strategy.

What are the necessary permits to open a business?

The permits required to open a business in Spain may vary depending on the type of economic activity, location and other specific circumstances of your company. Below we mention some of the most common permits and licenses you may need:

• Opening license: Most physical businesses, such as shops, restaurants or workshops, require an opening license. This license is granted by municipal authorities and varies depending on location and activity.
• Activity license: some municipalities require a specific license for the activity that you will carry out in your business, in addition to the opening license. You should check with the relevant local council for accurate information on the licenses required in your area.
• Health License: If your business involves food handling, catering, healthcare, or any health-related activity, you will likely need a health license issued by local health authorities.
• Environmental license – All businesses that may have a significant environmental impact, such as those involved in industry, construction or waste management, may require an environmental license to comply with environmental regulations.
• Planning permission: If you are considering making changes to the premises or building new facilities, you must obtain planning permission from the local authority.
• Authorization for the sale of alcohol: If you plan to sell alcohol in your business, you will need specific authorization for the sale of alcoholic beverages. These authorizations may vary depending on the autonomous community.
• Live music license: If you want to offer live music or play recorded music in your establishment, you must obtain a license for the use of music, known as an SGAE license, through the General Society of Authors and Publishers.
• Outdoor advertising permit: you will need it to place advertisements or signs outside your business, you may need a permit for outdoor advertising from the municipal authorities.
• Authorization for special activities: If your business involves special activities, such as gambling, private security services or cultural activities, you will likely need specific authorizations for these activities.
• Commercial Registry: if you are creating a company, you must register it in the corresponding Commercial Registry.
• Trademark Registration (optional): if you want to protect your trademark, you can register it with the Spanish Patent and Trademark Office.

You can also read about this:

• Collective agreement: types and aspects it regulates
• Pricing strategies: How to define the value of your product