There are many ways to structure your business venture in Spain. EBF Consulting would study your situation in detail to advise on the most tax efficient option for you.
The most frequently found legal structures are:
Sole Trader/Sole Proprietor (Empresario Individual or Autónomo)
Partnership (Sociedad Civil)
Limited Liability Company (Sociedad Limitada/SL or Sociedad de Responsabilidad Limitada/SRL
Public Limited Company (Sociedad Anonima /SA)
New Enterprise Limited Company (Sociedad Limitada Nueva Empresa/SLNE)
Co-ownership (Comunidad de Bienes/CB)
This is the simplest and quickest way to begin trading and there is no minimum financial investment required when establishing oneself as self-employed in Spain. However, there is unlimited liability, which means the person is responsible for all debts incurred. Before setting up as an autónomo (Spanish terminology), it is necessary to obtain a NIE. Non-EU citizens will need to apply for a combined self-employment work and residence visa as well.
Quarterly tax returns for both IVA/IGIC and business taxes (20% on profit) are presented; if you are renting business premises then you will need to present the rent retention too. There is a selection of activities that are automatically included in the “modular” system, where tax is paid on estimated business profits. You are permitted to remain in this system, so long as you do not exceed turnover of 250.000 euros or 125.000 euros if you have an obligation to issue invoices to other registered businesses.
In addition, there is an obligation to register with the Social Security where you will pay a monthly amount irrespective of the earnings from your business. There are currently reductions being applied in Spain to encourage people to establish new businesses. See our article Social Security in Spain for more Details
Also see our article on Corporate Business: What are my options?
Information by E.B.F Consulting S.L. E.B.F Consulting has been providing tax and accounting services to expatriates in Europe since 1999. Office is based in Lanzarote, Spain. Visit the www.ebfconsulting.com for more details. Copyright © E.B.F Consulting 2016 All Rights Reserved