Setting Up a Business

When starting a business, it is important that the company is formed correctly right from the start. There are many kinds of business: limited and unlimited companies, joint ventures, workers partnerships, branches, etc. We recommend that you get advice from a good lawyer or an established gestor. As in the UK, the type of company that you establish, will determine its liability.

The Most Popular Possibilities Are:

Empresa Individual

To be a sole trader you need a NIE but be aware that in sole proprietorship, your liability for debts is unlimited as you are personally liable for yourbusiness' debts.

Sociedad Limitada (S.L.)

Limited liability company. The minimum capital requirements are 3,005.06€ to be placed in a business bank account. Although many people withdraw the funds when the registration process is finished, legally these funds should remain in the bank.

Partners are not personally liable for company's debts; their liability is limited to their Investmentin the company. Only one share holder is needed; however there is no limit on the number of shareholders. The administrator holds the financial responsibility.

Sociedad Anonima (S.A.)

Stock Corporation. Minimum share capital is 60,101.21€. As a large company with registered shareholders, the shareholders are not personally liable for corporate debts; they are only liable to the extent of their contribution to the corporation. The administrator holds the financial responsibility.

Step one is to visit the local police station and apply for a NIE number (fiscal identity number for foreigners.)

As part of the process of starting up a business you also have to register at the local town hall for a Licencia de Apertura - an opening licence. This registers your business in the local area, defines what it is and how it trades.

You are generally required to submit a map of your business location, a photograph of the exterior and a floor plan. Each town hall has different requirements; there are guidelines to be followed for each kind of business.

You also have to register with the Spanish tax authorities (Agencia Tributaria) in order to pay the appropriate tax on your business activities. The next stage is to register for social security payments - income tax style contributions to the state allowing you to participate in workers' benefits: Spanish health system and Spanish state pension, etc. Currently, retirement benefits are based upon the last 15 years of employment, but reforms are in the works.

All of this process is best organised through a good lawyer or gestor who should be able to offer you a complete package. You may require bilingual support to help you fill in the forms, etc. It is essential to employ a Spanish accountant to ensure you fully comply with all the legalities and serve as a consultant assisting you with your initial business plan.

Having taken care of the legal aspects, you need to consider the right location and property. This is key in starting any new business and you need to undertake a careful evaluation of space requirements, set-up costs, competitors, ease of access and customer flow etc.

Whether to buy or rent in the early stages of a business is a difficult call to make. There are advantages and disadvantages both of the economic kind. It can be risky at the start, therefore consider in the early stages using the facilities of a business centre that will be able to offer you various options from virtual offices to short-term serviced offices.

Making a Living in Spain

Making a Living in Spain, written by Anne Hall, was published in April 2005 by UK publisher, Survival Books, publishers of a vast range of essential reading for those who plan to reside abroad. Anne Hall's book contains comprehensive, straightforward advice about starting a business, being self-employed and getting a job in Spain. It leads you through the seemingly endless Spanish bureaucracy, discusses how to finance your business and prepares you for the unexpected cultural differences which may affect you.

Covering business and job opportunities in the main cities and popular coastal areas, the book tells the stories of individuals and businesses all over Spain. These diverse and informative experiences help readers to avoid some of the more common pitfalls of doing business in Spain.

Making a Living in Spain is available in all good bookshops in the UK, in Bookworld España in Spain, via www.amazon.co.uk or direct from the publisher, www.survivalbooks.net.