In Spain, individuals and businesses have various legal forms and independent professional statuses to choose from when establishing their operations. These are based on the following regulations:
- Spanish Commercial Code (Código de Comercio)
- Spanish Companies Act (Ley de Sociedades de Capital)
- Spanish Tax Law (Ley del Impuesto sobre la Renta de las Personas Físicas)
- Social Security Law (Ley General de la Seguridad Social)
Types of Businesses
- Sole Proprietorship (Empresario Individual or Autónomo): A business owned and operated by a single individual. The owner has unlimited liability and is responsible for all business decisions and obligations. Registration typically involves obtaining a tax identification number (NIF) from the Tax Agency (Agencia Tributaria) and registering with the Social Security system.
- Partnership (Sociedad Civil): A business formed by two or more individuals or entities who agree to jointly carry out commercial activities. Partnerships are governed by a partnership agreement (contrato de sociedad) and may be general partnerships (sociedad colectiva) or limited partnerships (sociedad comanditaria).
- Corporation (Sociedad Anónima or S.A.): A legal entity separate from its owners, with shareholders who own shares of stock. Shareholders have limited liability, and the corporation is managed by a board of directors. Incorporation involves drafting articles of association (estatutos sociales), obtaining a tax identification number, and registering with the Commercial Registry (Registro Mercantil).
- Limited Liability Company (Sociedad de Responsabilidad Limitada or S.L.): A hybrid business structure that combines features of partnerships and corporations. Owners have limited liability, and the company is managed by one or more administrators. Formation requires drafting articles of association, obtaining a tax identification number, and registering with the Commercial Registry.
Independent Professional Statuses:
- Freelancer (Trabajador Autónomo or Freelance): An individual who works independently and offers services to clients on a contractual basis. Freelancers are self-employed and responsible for their own taxes and social security contributions. Registration involves obtaining a tax identification number and registering with the Social Security system as a self-employed worker.
Registration Process and Costs:
- Sole Proprietorship: Registration typically involves obtaining a tax identification number (NIF) from the Tax Agency and registering with the Social Security system. Costs may include notary fees and administrative expenses, totaling around €50 to €100.
- Partnership: Formation requires drafting a partnership agreement and registering with the Commercial Registry. Costs vary depending on legal assistance and administrative fees, ranging from €300 to €1000.
- Corporation: Incorporation involves drafting articles of association, obtaining a tax identification number, and registering with the Commercial Registry. Costs include notary fees, administrative expenses, and capital contributions, totaling approximately €1500 to €3000.
- Limited Liability Company: Formation requires drafting articles of association, obtaining a tax identification number, and registering with the Commercial Registry. Costs include notary fees, administrative expenses, and capital contributions, totaling approximately €1000 to €2000.
- Freelancer: Registration involves obtaining a tax identification number and registering with the Social Security system. Costs may include administrative fees and social security contributions, depending on the individual's income and circumstances.
Incorporation/Registration Timeline:
- The incorporation or registration process typically takes 1 to 2 weeks for sole proprietorships, partnerships, and freelancers.
- Corporations and limited liability companies may take longer, ranging from 2 to 4 weeks due to additional formalities and documentation requirements.
These legal provisions aim to regulate business activities, protect stakeholders' interests, and promote entrepreneurship and economic growth in Spain.
