Her English is totally fluent and she had no problem taking the time to read through all the documents and explain everything to me. However, some types of goods and services may attract a lower rate of 10% or even 4%. All contracts must, by law, be written in Spanish, so make sure that your adviser arranges a translation if you are not fluent in Spanish. Youll also need to obtain a certificate to confirm this from the Mercantile Registry. These payments will entitle you to free healthcare. Although, as a self-employed person, youll need to join a health insurance fund ( mutua ) via the social security authorities. These amounts are then credited when you fill in your annual tax return. Company annual return (abbreviated accounts: balance sheet, profit and loss statement, annual report), Ongoing updates on any legislative changes affecting the area of the Company Activities, The lawyer will contact the other party to arrange all useful information and documentation possible, including income, taxation, costs, assets, leases, licenses or permits etc, Analysis of the information obtained and a report provided to you to determine whether you should proceed, Preparation or analysis of contract of traspaso. However, youll still need to obtain your Nmero de Identificacin de Extranjero (NIE). Not only does Wise use the real mid-market exchange rates to convert your money (which nearly always beat the banks), but because your money is received and sent via local bank transfers in both your home country and in Spain, all those nasty international fees magically disappear. VAT returns, Corporation Tax, Income Tax, Non-resident tax, any other tax obligation with any national tax authority: National/Regionals/Local. Please contact me about FCA Authorised currency services (to beat the bank and save up to 4% on money transfers to and from Europe and further afield). However, its good to have, as it regulates the relationship between you and your business partners and outlines your responsibilities. Where would you prefer your Accountant/Tax Lawyer to be located? A sole trader set up, however, is not painful and, once the initial paperwork is done, you will be up and running and can get on with making some money. Youll need to make sure you comply with the applicable rules before you can start trading. Assuming you have already decided on the type of business you want to run and where in Spain you wish to locate it, then the main decision you will need to make is whether you should set it up as a limited company or as a sole trader. the notary, to ensure that everything was done in a timely manner. Now you can send, receive and organise your money internationally, without crazy fees or even-crazier exchange rates just a small, fair charge when your money moves between currencies. These instruments protect these People receive dividend allowance annually and pay tax on dividend income above their dividend allowance. This is similar to a sole trader but, whilst each proprietor will pay their own income tax and social security contribution, the business makes the IVA return. There are also benefits to forming a company; a Sociedad Limitada (SL), or buying a ready-made one. Corporation tax rates are lower than the highest rate of personal income tax and you may be able to offset more of your business costs against your profits, which could reduce your tax liability. You may need to obtain an opening licence (Licencia de Apertura) if you have business premises. This guide will cover the different ways to pay VAT, with transfer times and prices so you can choose the best option. Are you looking to find the perfect business in Spain? Just as elsewhere, one of the major differences between the two forms of business is that creating a limited company ensures limited liability to the owner of the company. You also have the option to opt-out of these cookies. In Spain, VAT is charged at 21%. Depending on the type of business and the region you live in, you may also have other periodic filing requirements. Miguel is a highly qualified - and regulated - economista, similar to a chartered accountant in the UK. The Spanish Govt can help! setting up proper accounting books, including VAT books, obtaining any licenses necessary to operate your business, including an opening licence for your business premises, financial expenses up to 1 million or 30% of your companys operating profit (whichever is less), depreciation (decrease in value of business assets over time). Case Study Sole owned property in Marriage, CASE STUDY Accidents in Private Home in Spain. I would highly recommend working with her! Each have their own special requirements and come with different rights and responsibilities. Once the most appropriate structure for your business in Spain has been determined you can review the components of each service: With 60 individual office locations throughout the Iberian peninsula and the islands, and 6 specialist tax centres we are able to offer a truly nationwide service to English-speakers wherever they are located in Spain. (You are then entitled to the Spanish national health service after a certain period). Manufacturing, financial and insurance, wholesale and retail trade, tourism, and real state are the sectors in which most of FDIs are directed. Administrative support for accounts/ accounting records: Preparation of accounting. In order to register, youll need the following: If you live and work in Spain and make social security contributions, youre entitled to free healthcare. Youll need to return the form at your local tax office in person, together with the original and a copy of your NIE. Regular monthly, quarterly and annual filings. Applying for company tax and identification numbers. These contributions tend to be significantly higher than in other northern European countries with a current minimum of approximately 250 per month payment, regardless of income. These cookies will be stored in your browser only with your consent. You must register for social security under the special regime for autonomous workers (RETA) within 30 days of registering with the tax authorities. buyers solicitors, the notary. Setting up a company is a complicated process; and Spanish law may differ substantially from the laws of your own country. You can apply for your NIE in person once youre in Spain or, even better, get it ahead of time via the Spanish embassy or consulate in your home country. Permanent or indefinite or fixed contracts are supposed to be the rule and temporary contracts the exception. Business address (whether it will be only for correspondence or you will really make your business there). IVA is Spanish sales tax and the general rule is that there is no exemption from charging IVA, the smallest business must charge IVA where applicable. Youll also need to comply with specific accounting and invoicing requirements. Especially if the activity or service to be provided is dangerous in any way, such as certain sporting activities. You can however choose to pay more in exchange for extra benefits, including a higher pension and extra insurance. Take the original deed to your local tax authority to have it stamped. Feel free to get in touch with any enquiries and one of our friendly members of staff will get back to you as soon as possible. I worked with Rosa on obtaining a background check from Spain, and she could not have been more helpful. What does this involve in Spain? Whether youre a sole trader or a freelance professional, youll need to file a personal income tax return each year, as well as quarterly returns. The pandemic meant that it was difficult for us to travel to complete the sale paperwork but to overcome this Rosa became our Power of Attorney and again liaised with professional bodies e.g. Though in recent years the unemployment rate has been going down, its still relatively high at 21%. (9.5% - 22.5% national tax + regional taxes), Approx. If youre a sole trader or a member of a partnership, youll need to make your own social security contributions. All transactions are auto. My lawyer - through her extraordinary efforts - ensured everything was done for me and on several occasions during this process went the extra mile. Limited companies pay corporation tax. Alternatively you can incorporate your company without traveling to Spain. As a director, youll need to register with the social security authorities on behalf of the company. Exceptional value for money! A company is a legal person in its own right, so youll need a tax identification code thats specific to it. This applies whether youre a sole trader, a partnership or a company; and no matter how little money you make. Youll need it to pay your taxes and for anything else that requires an official process, including renting or buying property, getting connected to utilities and opening a bank account. Accounting for special purposes, preparation of annual accounts. Either way, youll have to file a tax return at the end of each financial year. It includes information such as the name of your company, its official address, the nature of your business, names and addresses of all shareholders, names and addresses of its officials (directors, company secretary and key officers) and so on. [View on Google]. I am buying or selling property abroad. The other major expense that we mentioned above that an Autonomo will have is Social Security. Once thats done, ask your bank to give you a certificate that proves youve made the payment. Of course, you could always avoid the problem altogether and set up your own business. However, finding work may get a bit tricky. Once youre sure setting up a company is right for you, you need to check if the name youve chosen is available. I could not have had someone more trustworthy and helpful. These include: Of course, if you run a business, youll have to pay taxes. [View on Google]. a single director company then that director must register as an autonomo and pay those social security contributions. An NIE is your unique Spanish tax identification number. They should contain the following: *The invoice must have a line for the amount before IVA is added as well as a line for the IVA itself. Depending on your profession or the type of business you want to carry out, you may also need to apply for a licence. Ensure legal interests are protected, especially when creating a company with several partners. Miguel speaks English fluently. It is mandatory to procure user consent prior to running these cookies on your website. A lovely approachable gentleman who is extremely knowledgeable about law.". An excellent communicator. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. Completion and presentation of all required tax returns. 
Rosa is an experienced and highly sought-after English-speaking lawyer who provides expert legal advice and assistance in the following legal areas: Property conveyances, Inheritance, Family law, Criminal law, Business set-up and Employment law. Spanish Legislation Related to Foreign Investments, How to Purchase Shares in a Spanish Company. The main differences between them are the minimum number of shareholders required and the minimum amount of money you have to invest. Autonomos are required to register with this scheme for self employed workers. These are only a few of the conditions for, Yes, if you want to benefit from free healthcare as a sole trader in Spain you need to register for social security contribution payments. When combined with the free and innovative Advocate Abroad support services you can be sure that you are obtaining completely transparent legal services from registered and regulated English-speaking lawyers abroad.These support services include: "Following our father's death, my brother and I asked Rosa to act for us and guide us through the Spanish probate legal process. Drawing-up a notarial contract according to your guidelines, properly prepared and tailored to your objectives. This is especially helpful if things go wrong, or you have a disagreement. Its just as legally valid and significant as traditional, paper-based ty, So, what can you do with Countingup? There were several obstacles and Rosa was always there for us, explaining what was required and liaising with professional bodies e.g. If as a result of the operation of the company a financial liability should arise, then often this is limited to the amount of capital in the company. Youll also need to give the notary originals and copies of your tax forms, certificate of uniqueness, NIE and bank certificate. Where there are no employees of the company i.e. This process should take about 15 days. Youve had a good idea and want to set up a new business to make a bit of money? Sometimes, this is passed-on to the new owner, if purchasing an existing business, or if not, it may be necessary to make an application. Once completed the registration process, we will draw up all other corporate documents required by the Commercial Companies Code. Recommendations regarding the most appropriate fiscal arrangements to ensure taxation levels are optimised. Two or more proprietors can set up a Comunidad de Bienes (CB), similar to a sole trader but, whilst each proprietor pays income tax and social security contribution, the business makes the IVA return. Manage communications with the Tax Authorities. Besides Personal Income and Vat Returns, you may have other tax returns to present depending on whether you need to pay a rent retention for a business or whether you have employees. I would highly recommend anyone buying in this area to work with her. Together we will be able to offer you the specialized help you require for your business start-up in Spain. Complete management of the companys accounts. When operating in a business involved in importing and/or exporting, there are several financial instruments available. We've provided many solutions for "Business" problems. Your fiscal representative can discuss this with you and will be able to discount expenses against income if you are a sole trader, so it is vital to collect the relevant factura receipts. As a sole trader, you pay your taxes in one of two ways, depending on whether youre an empresa individual or an autonomo. Yes. On this point, you may be intermittently inspected by the Police Local as are other businesses and the paperwork that that you will be asked to produce is: Employees enjoy extensive rights, which include a minimum wage and and one months paid holiday and 14 public holidays (two of which are locally established). It is more expensive, but as the company is a separate legal entity, you may be protected from personal liability in the event of bankruptcy, and there can be tax benefits. You have to apply for your permit at the Spanish embassy or consulate in your home country. If youre an employer, you have to make social security contributions on behalf of your employees. If youre an empresa individual, youll need to pay tax on a quarterly basis at a rate of 19%. Old-world bank accounts only work properly in one country. However, after five years you can apply for long-term Spanish resident status. Are Russian and Ukrainians still buying property in Spain? Fast - Simple - Incredible prices - Your own, legally binding documents you can fill out at home! For example, setting-up as an autonomo does not require 3000 of capital as would be the case with a limited company in Spain. "Francisco was extremely helpful, he couldn't have done more.". Low. Youre exempt from paying social security if you earn less than 9,000 a year. Besides simplified company incorporation that allows entrepreneurs have a fast start on the market, there are also other benefits. What will business in Spain look like post-COVID 19? It also has a number of distinct advantages over the other forms, including limited liability and more favourable taxation (if you earn more than a certain amount). Register a declaration for starting a business (. Youll need to submit periodic VAT returns, as well as an annual return. Service levels agreed in advance and guaranteed. There was several delays on my end, and she was nothing but patient and kind during the entire process. Most businesses will have an obligation to make VAT (in Spain this is called IVA) and Income Tax returns. Your return should include all your income for the year (whether from your business or otherwise) and any allowances and deductions. Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. From offices in Valencia City and Castelln de la Plana, Inmaculada provides expert legal advice and assistance to English-speakers in Property matters, Contract Breaches/Debt Recovery, Family law and Business formation and bookkeeping service. Non-EU citizens will need to apply for a combined self-employment work and residence visa as well. In order to register your new company, youll need to do three things. Cash flow issues? Youll also need to deduct taxes and social security contributions from your employees salaries. Quarterly returns. Dealing with bank formalities connected with setting up of the company bank account. The system doesnt apply if youre a sole trader. you can also relax in the knowledge that any communications received from the Tax Authority often impenetrable to locals never mind foreigners will be managed conveniently and efficiently by your accountant. Rosa also helped us immeasurably when my fathers estate was sold. 265 per month minimum + contribution if employer, Director to register on behalf of company + contribution if employer, Personal allowances and business expenses, evidence that you have enough money to invest in your business and support yourself, copies of any business contracts or commissions, information about the potential to create employment in Spain, register with the Spanish tax office (the, get a licence (if your profession is regulated), create a partnership agreement and sign it before a notary (a lawyer can draft this for you), apply for any licences (including an opening licence for your business premises). Next, youll need to open a business bank account in the name of your new company and deposit the minimum investment amount. Certain professions and types of business - lawyers, architects, healthcare professionals and financial services, to name a few - are heavily regulated. All Rights Reserved |, Case Study Permissions for Food in Spanish Bars. Skip the medical waiting list in Ireland and get your Surgery NOW! Professionals' proficiency in English monitored. However, if you dont pay social security you wont get any benefits, so its a good idea to make the payments anyway. Once your personal legal status is in order, its time to decide your businesss legal form. Obtaining all necessary documents, permits and approvals. Some types of business must be run as a limited company by law. Sole trader in Spain are known as autonomos and those who are just starting-out and where the income is likely to be low tend to choose this route. Wise is the trading name of TransferWise, which is authorised by the Financial Conduct Authority under the Electronic Money Regulations 2011, Firm Reference 900507, for the issuing of electronic money. Case Study Can you appeal against a Criminal Conviction in Spain? He is the ultimate professional on every level. We help Peters new bar business become a dream come true! Have you got a grip on your business in Spain costs and expenses? In the case of a limited company there is an obligation to make social security contributions on behalf of an employee of 24% of their income. Tax is due on your companys net profits, after all allowable deductions are made. Hiring employees involves a lot of paperwork (work contracts, registration, social security, tax retentions, payslips and annual certificates etc) and business social security contributions can be extremely expensive. Spanish Bonds; a better option than UK Bonds? You are then entitled to the local health service and if you pay for a certain number of years you may qualify to receive a pension. Inmaculada has assisted individuals and corporations in the Valencia region with the legal and tax matters for over 30 years. As a Lexidy Law Boutique SLPclient, you will benefit from the joint expertize of local lawyers and international consultants. Either way, youll need to do the following to set one up: A partnership agreement isnt strictly required. Initial discussion with a lawyer to understand the project you have in mind, Preparation of a report on the steps to be taken to initiate the activity and the likely costs involved, including an evaluation of the likelihood of success, Upon agreement, initiation of the application and the steps to obtain the licence, Follow-up services to include full tax and accounting service. Your health plan will also cover any dependent family members living at your address. Opening and operating a business can often require the owner to obtain a license to carry-out the specific activity. Why Is Spain an Attractive Country for Foreign Investors? Like sole traders, partnerships dont require a minimum investment to be set up. Here's a selection of articles from our blog which include information about "business". It is less straight-forward and more expensive, but as the company is a legal entity, you may be protected if sued. The Spanish government is making considerable efforts to encourage employment stability. If you are planning to take over a bar, restaurant or other active restaurant or indeed need to arrange premises for the carrying-on of a new business, you may well need to arrange the traspaso or transfer of the business and/or premises. Mainly because it is less complex and more economical to both set-up and run. On the other hand, if youre an autonomo, the retention system (explained previously) applies, and clients will retain a percentage of your invoice and pay it to the tax authorities on your behalf. Nearly USD 752 billion was the total FDI stock in 2019 for Spain. A tax return for a self employed person is made annually in June (called I.R.P.F.). In Spain, you have three main options: Operating as a sole trader is probably the easiest, cheapest and most flexible way to start doing business, especially if you run your business on your own. "I cannot recommend too highly Jose A. Sempere Gelardo. For starters, theres a business current account which comes with a contactless debit Mastercard. If you dont and your business is inspected by the labour authorities, you could be fined. Unfortunately not legally. Finally, youll need to take care of some other minor formalities. There is no minimum financial investment when establishing oneself as self-employed in Spain. Rafael graduated in Law from the University of Seville in 1995. Ensuring that your Articles of Association contain all necessary elements. Moderate. Whichever type of limited company you choose, youll need to follow the following steps. Each new worker should be registered with the social security authorities and his contract registered with the national employment service within ten days. They hold money only in one currency. If you want to terminate an employees contract, you will need to tread with extreme care. [View on Google]. Her English is excellent and her patience is inexhaustible. Its very important to consult with a professional. Inma helped me to buy a property in the Valencia region. EU citizens can set up a business once they have a NIE number (Numero de Identidad de Extranjero) and social security number. All rights reserved. Your tax liability will depend on whether youre a sole trader, a partnership or a company. Very often, the process will involve getting your qualifications officially accredited or recognised (called homologacin ). With regard to invoices (facturas) in Spain, even existing businesses are confused on what these must contain when they are asked to produce one. Individual - sliding scale. He specialises in business and property matters and over the years has assisted many English-speakers relocating to Spain who wish to establish their businesses in Spain and also get assistance with property investment. La Zenia, Orihuela Costa
These include: The general rate of tax is 25%. Wise's new Borderless accounts solve all of this. Whichever type of contract you use, you must make sure that it complies with the minimum legal requirements for workers rights and you should obtain advice on this. With the power of attorney you will have granted to us, on your behalf we will register your company at all Government institutions and offices required by law. Depending on the type and size of the business that you are planning to set-up, a limited company can often be the appropriate choice for the same reasons as are the case in your home country flexibility and limited liability. One of the major drawbacks of registering as an autonomo is that you will be personally liable for any debts or losses incurred by your business and any personal assets could be at risk if your business is in financial trouble either as a result of damages owed to a client or failure to pay due taxes and social security contributions. Here we will look at the differences between the two so that you can decide on which is the most appropriate and cost effective for your business in Spain. There are benefits to forming a company; a Sociedad Limitada (SL), or buying a ready-made one. A company lawyer or accountant can help you decide if forming a company is right for you, advise you on the exact requirements and help you throughout the process. A Notary needs to sign them off and you will have to register your company for tax and IVA and to pay stamp duty. In order to start a business, you must first have the right to live and work in Spain. 03189, Spain
Resolution of tax enquiries related to your activity. Necessary cookies are absolutely essential for the website to function properly. Fees specified in advance and legally guaranteed. Two copies of the signed contract must be sent off to the Employment Service, who will stamp and return them, one for the employee and one for your records. If youre not an EU citizen, youll also need to have a valid visa and a valid work permit. Can you evict a non-paying tenant who cites covid as the reason? However, newly formed companies pay 15% tax on the first 300,000 and 20% on the remainder for the first two years. The distinction is important because of the Spanish retention system ( retenciones ). Requirements for UK buyers in Costa Blanca South, MODEL 720: OBLIGATION TO DECLARE ASSETS LOCATED OUTSIDE SPAIN. If youre still filing your VAT Returns to HM Revenue and Customs (HMRC) through the post, weve got news for you. However, the process is a bit more time-consuming and expensive.
Rosa is an experienced and highly sought-after English-speaking lawyer who provides expert legal advice and assistance in the following legal areas: Property conveyances, Inheritance, Family law, Criminal law, Business set-up and Employment law. Spanish Legislation Related to Foreign Investments, How to Purchase Shares in a Spanish Company. The main differences between them are the minimum number of shareholders required and the minimum amount of money you have to invest. Autonomos are required to register with this scheme for self employed workers. These are only a few of the conditions for, Yes, if you want to benefit from free healthcare as a sole trader in Spain you need to register for social security contribution payments. When combined with the free and innovative Advocate Abroad support services you can be sure that you are obtaining completely transparent legal services from registered and regulated English-speaking lawyers abroad.These support services include: "Following our father's death, my brother and I asked Rosa to act for us and guide us through the Spanish probate legal process. Drawing-up a notarial contract according to your guidelines, properly prepared and tailored to your objectives. This is especially helpful if things go wrong, or you have a disagreement. Its just as legally valid and significant as traditional, paper-based ty, So, what can you do with Countingup? There were several obstacles and Rosa was always there for us, explaining what was required and liaising with professional bodies e.g. If as a result of the operation of the company a financial liability should arise, then often this is limited to the amount of capital in the company. Youll also need to give the notary originals and copies of your tax forms, certificate of uniqueness, NIE and bank certificate. Where there are no employees of the company i.e. This process should take about 15 days. Youve had a good idea and want to set up a new business to make a bit of money? Sometimes, this is passed-on to the new owner, if purchasing an existing business, or if not, it may be necessary to make an application. Once completed the registration process, we will draw up all other corporate documents required by the Commercial Companies Code. Recommendations regarding the most appropriate fiscal arrangements to ensure taxation levels are optimised. Two or more proprietors can set up a Comunidad de Bienes (CB), similar to a sole trader but, whilst each proprietor pays income tax and social security contribution, the business makes the IVA return. Manage communications with the Tax Authorities. Besides Personal Income and Vat Returns, you may have other tax returns to present depending on whether you need to pay a rent retention for a business or whether you have employees. I would highly recommend anyone buying in this area to work with her. Together we will be able to offer you the specialized help you require for your business start-up in Spain. Complete management of the companys accounts. When operating in a business involved in importing and/or exporting, there are several financial instruments available. We've provided many solutions for "Business" problems. Your fiscal representative can discuss this with you and will be able to discount expenses against income if you are a sole trader, so it is vital to collect the relevant factura receipts. As a sole trader, you pay your taxes in one of two ways, depending on whether youre an empresa individual or an autonomo. Yes. On this point, you may be intermittently inspected by the Police Local as are other businesses and the paperwork that that you will be asked to produce is: Employees enjoy extensive rights, which include a minimum wage and and one months paid holiday and 14 public holidays (two of which are locally established). It is more expensive, but as the company is a separate legal entity, you may be protected from personal liability in the event of bankruptcy, and there can be tax benefits. You have to apply for your permit at the Spanish embassy or consulate in your home country. If youre an employer, you have to make social security contributions on behalf of your employees. If youre an empresa individual, youll need to pay tax on a quarterly basis at a rate of 19%. Old-world bank accounts only work properly in one country. However, after five years you can apply for long-term Spanish resident status. Are Russian and Ukrainians still buying property in Spain? Fast - Simple - Incredible prices - Your own, legally binding documents you can fill out at home! For example, setting-up as an autonomo does not require 3000 of capital as would be the case with a limited company in Spain. "Francisco was extremely helpful, he couldn't have done more.". Low. Youre exempt from paying social security if you earn less than 9,000 a year. Besides simplified company incorporation that allows entrepreneurs have a fast start on the market, there are also other benefits. What will business in Spain look like post-COVID 19? It also has a number of distinct advantages over the other forms, including limited liability and more favourable taxation (if you earn more than a certain amount). Register a declaration for starting a business (. Youll need to submit periodic VAT returns, as well as an annual return. Service levels agreed in advance and guaranteed. There was several delays on my end, and she was nothing but patient and kind during the entire process. Most businesses will have an obligation to make VAT (in Spain this is called IVA) and Income Tax returns. Your return should include all your income for the year (whether from your business or otherwise) and any allowances and deductions. Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. From offices in Valencia City and Castelln de la Plana, Inmaculada provides expert legal advice and assistance to English-speakers in Property matters, Contract Breaches/Debt Recovery, Family law and Business formation and bookkeeping service. Non-EU citizens will need to apply for a combined self-employment work and residence visa as well. In order to register your new company, youll need to do three things. Cash flow issues? Youll also need to deduct taxes and social security contributions from your employees salaries. Quarterly returns. Dealing with bank formalities connected with setting up of the company bank account. The system doesnt apply if youre a sole trader. you can also relax in the knowledge that any communications received from the Tax Authority often impenetrable to locals never mind foreigners will be managed conveniently and efficiently by your accountant. Rosa also helped us immeasurably when my fathers estate was sold. 265 per month minimum + contribution if employer, Director to register on behalf of company + contribution if employer, Personal allowances and business expenses, evidence that you have enough money to invest in your business and support yourself, copies of any business contracts or commissions, information about the potential to create employment in Spain, register with the Spanish tax office (the, get a licence (if your profession is regulated), create a partnership agreement and sign it before a notary (a lawyer can draft this for you), apply for any licences (including an opening licence for your business premises). Next, youll need to open a business bank account in the name of your new company and deposit the minimum investment amount. Certain professions and types of business - lawyers, architects, healthcare professionals and financial services, to name a few - are heavily regulated. All Rights Reserved |, Case Study Permissions for Food in Spanish Bars. Skip the medical waiting list in Ireland and get your Surgery NOW! Professionals' proficiency in English monitored. However, if you dont pay social security you wont get any benefits, so its a good idea to make the payments anyway. Once your personal legal status is in order, its time to decide your businesss legal form. Obtaining all necessary documents, permits and approvals. Some types of business must be run as a limited company by law. Sole trader in Spain are known as autonomos and those who are just starting-out and where the income is likely to be low tend to choose this route. Wise is the trading name of TransferWise, which is authorised by the Financial Conduct Authority under the Electronic Money Regulations 2011, Firm Reference 900507, for the issuing of electronic money. Case Study Can you appeal against a Criminal Conviction in Spain? He is the ultimate professional on every level. We help Peters new bar business become a dream come true! Have you got a grip on your business in Spain costs and expenses? In the case of a limited company there is an obligation to make social security contributions on behalf of an employee of 24% of their income. Tax is due on your companys net profits, after all allowable deductions are made. Hiring employees involves a lot of paperwork (work contracts, registration, social security, tax retentions, payslips and annual certificates etc) and business social security contributions can be extremely expensive. Spanish Bonds; a better option than UK Bonds? You are then entitled to the local health service and if you pay for a certain number of years you may qualify to receive a pension. Inmaculada has assisted individuals and corporations in the Valencia region with the legal and tax matters for over 30 years. As a Lexidy Law Boutique SLPclient, you will benefit from the joint expertize of local lawyers and international consultants. Either way, youll need to do the following to set one up: A partnership agreement isnt strictly required. Initial discussion with a lawyer to understand the project you have in mind, Preparation of a report on the steps to be taken to initiate the activity and the likely costs involved, including an evaluation of the likelihood of success, Upon agreement, initiation of the application and the steps to obtain the licence, Follow-up services to include full tax and accounting service. Your health plan will also cover any dependent family members living at your address. Opening and operating a business can often require the owner to obtain a license to carry-out the specific activity. Why Is Spain an Attractive Country for Foreign Investors? Like sole traders, partnerships dont require a minimum investment to be set up. Here's a selection of articles from our blog which include information about "business". It is less straight-forward and more expensive, but as the company is a legal entity, you may be protected if sued. The Spanish government is making considerable efforts to encourage employment stability. If you are planning to take over a bar, restaurant or other active restaurant or indeed need to arrange premises for the carrying-on of a new business, you may well need to arrange the traspaso or transfer of the business and/or premises. Mainly because it is less complex and more economical to both set-up and run. On the other hand, if youre an autonomo, the retention system (explained previously) applies, and clients will retain a percentage of your invoice and pay it to the tax authorities on your behalf. Nearly USD 752 billion was the total FDI stock in 2019 for Spain. A tax return for a self employed person is made annually in June (called I.R.P.F.). In Spain, you have three main options: Operating as a sole trader is probably the easiest, cheapest and most flexible way to start doing business, especially if you run your business on your own. "I cannot recommend too highly Jose A. Sempere Gelardo. For starters, theres a business current account which comes with a contactless debit Mastercard. If you dont and your business is inspected by the labour authorities, you could be fined. Unfortunately not legally. Finally, youll need to take care of some other minor formalities. There is no minimum financial investment when establishing oneself as self-employed in Spain. Rafael graduated in Law from the University of Seville in 1995. Ensuring that your Articles of Association contain all necessary elements. Moderate. Whichever type of limited company you choose, youll need to follow the following steps. Each new worker should be registered with the social security authorities and his contract registered with the national employment service within ten days. They hold money only in one currency. If you want to terminate an employees contract, you will need to tread with extreme care. [View on Google]. Her English is excellent and her patience is inexhaustible. Its very important to consult with a professional. Inma helped me to buy a property in the Valencia region. EU citizens can set up a business once they have a NIE number (Numero de Identidad de Extranjero) and social security number. All rights reserved. Your tax liability will depend on whether youre a sole trader, a partnership or a company. Very often, the process will involve getting your qualifications officially accredited or recognised (called homologacin ). With regard to invoices (facturas) in Spain, even existing businesses are confused on what these must contain when they are asked to produce one. Individual - sliding scale. He specialises in business and property matters and over the years has assisted many English-speakers relocating to Spain who wish to establish their businesses in Spain and also get assistance with property investment. La Zenia, Orihuela Costa
These include: The general rate of tax is 25%. Wise's new Borderless accounts solve all of this. Whichever type of contract you use, you must make sure that it complies with the minimum legal requirements for workers rights and you should obtain advice on this. With the power of attorney you will have granted to us, on your behalf we will register your company at all Government institutions and offices required by law. Depending on the type and size of the business that you are planning to set-up, a limited company can often be the appropriate choice for the same reasons as are the case in your home country flexibility and limited liability. One of the major drawbacks of registering as an autonomo is that you will be personally liable for any debts or losses incurred by your business and any personal assets could be at risk if your business is in financial trouble either as a result of damages owed to a client or failure to pay due taxes and social security contributions. Here we will look at the differences between the two so that you can decide on which is the most appropriate and cost effective for your business in Spain. There are benefits to forming a company; a Sociedad Limitada (SL), or buying a ready-made one. A company lawyer or accountant can help you decide if forming a company is right for you, advise you on the exact requirements and help you throughout the process. A Notary needs to sign them off and you will have to register your company for tax and IVA and to pay stamp duty. In order to start a business, you must first have the right to live and work in Spain. 03189, Spain
Resolution of tax enquiries related to your activity. Necessary cookies are absolutely essential for the website to function properly. Fees specified in advance and legally guaranteed. Two copies of the signed contract must be sent off to the Employment Service, who will stamp and return them, one for the employee and one for your records. If youre not an EU citizen, youll also need to have a valid visa and a valid work permit. Can you evict a non-paying tenant who cites covid as the reason? However, newly formed companies pay 15% tax on the first 300,000 and 20% on the remainder for the first two years. The distinction is important because of the Spanish retention system ( retenciones ). Requirements for UK buyers in Costa Blanca South, MODEL 720: OBLIGATION TO DECLARE ASSETS LOCATED OUTSIDE SPAIN. If youre still filing your VAT Returns to HM Revenue and Customs (HMRC) through the post, weve got news for you. However, the process is a bit more time-consuming and expensive.