setting up as a sole trader in spain

3/4 of the total FDIs registered in Spain in 2020 were absorbed by the region of Madrid, the most preferred area for international investors in this country.

Dont forget your Due Diligence when Acquiring a Business in Spain. 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.

Youll also need to obtain a certificate to confirm this from the Mercantile Registry. There was several delays on my end, and she was nothing but patient and kind during the entire process. 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. You are required to register with the Special Social Security scheme for self employed workers. I could not have had someone more trustworthy and helpful. Spanish Legislation Related to Foreign Investments, How to Purchase Shares in a Spanish Company. The deed of incorporation is the document that sets up your company. The purchaser agrees to make a payment to the existing leaseholder or owner to take-over the business or premises. 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.

You will need a name clearance certificate and to register the Articles of Association. 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. An excellent communicator. Complete management of the companys accounts. In Spain you dont need a VAT number as the NIE number is used as the equivalent. We'll assume you're ok with this, but you can opt-out if you wish. Its just as legally valid and significant as traditional, paper-based ty, So, what can you do with Countingup? Her English is totally fluent and she had no problem taking the time to read through all the documents and explain everything to me. Wise's new Borderless accounts solve all of this. Companies are also obliged to make social security contributions. Each partner is responsible for paying their own income tax. As in other countries, whether your business is classed as autonomo or as a limited company there are a number of fiscal obligations that the owner of a business in Spain will have.

03189, Spain Youll also get a pension if you pay social security for at least 15 years. Youll need to submit periodic VAT returns, as well as an annual 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. These payments will entitle you to free healthcare. Where would you prefer your Accountant/Tax Lawyer to be located? Take your stamped deed to the Mercantile Registry for filing in the official registry of companies. Depending on the type of business and the region you live in, you may also have other periodic filing requirements. There are also benefits to forming a company; a Sociedad Limitada (SL), or buying a ready-made one. Its very important to consult with a professional.

However, youll still need to obtain your Nmero de Identificacin de Extranjero (NIE). Where there are no employees of the company i.e. However, newly formed companies pay 15% tax on the first 300,000 and 20% on the remainder for the first two years. Calle Flores, 3, Bajo C The main differences between them are the minimum number of shareholders required and the minimum amount of money you have to invest. For starters, theres a business current account which comes with a contactless debit Mastercard. Alternatively you can incorporate your company without traveling to Spain. 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. As an autonomo or sole trader you will need to register with the local social security office and pay contributions each month. The distinction is important because of the Spanish retention system ( retenciones ). Rafael graduated in Law from the University of Seville in 1995. Opening and operating a business can often require the owner to obtain a license to carry-out the specific activity. You can deduct business expenses if they are entirely business-related, recorded in your accounting books and backed up with invoices or receipts. These extra obligations mean that the cost of maintaining the company are higher than where a sole trader is concerned. If youre an empresa individual, youll need to pay tax on a quarterly basis at a rate of 19%. He specialises in civil law, in particular property matters, mortgages, inheritance and family law. You can however choose to pay more in exchange for extra benefits, including a higher pension and extra insurance. Depends on type of partnership chosen. I am buying or selling property abroad. buyers solicitors, the notary.

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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.

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. Completion and presentation of all required tax returns. Both have benefits and drawbacks. Manufacturing, financial and insurance, wholesale and retail trade, tourism, and real state are the sectors in which most of FDIs are directed. Youll also need to give the notary originals and copies of your tax forms, certificate of uniqueness, NIE and bank certificate. Non-EU citizens will need to apply for a combined self-employment work and residence visa as well. An NIE is your unique Spanish tax identification number. Besides simplified company incorporation that allows entrepreneurs have a fast start on the market, there are also other benefits. 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.

Accounting for special purposes, preparation of annual accounts. With regard to invoices (facturas) in Spain, even existing businesses are confused on what these must contain when they are asked to produce one.

Each have their own special requirements and come with different rights and responsibilities. Especially if the activity or service to be provided is dangerous in any way, such as certain sporting activities. Regular monthly, quarterly and annual filings. (9.5% - 22.5% national tax + regional taxes), Approx. Your health plan will also cover any dependent family members living at your address.

If you want to terminate an employees contract, you will need to tread with extreme care. Are you looking to find the perfect business in Spain? Variable, depending on type of company. Once thats done, ask your bank to give you a certificate that proves youve made the payment. 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). Necessary cookies are absolutely essential for the website to function properly. The Spanish government is making considerable efforts to encourage employment stability. If youre a sole trader or a member of a partnership, youll need to make your own social security contributions. 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.

This is especially helpful if things go wrong, or you have a disagreement. One director must register with the RETA and make contributions on the companys behalf. These cookies will be stored in your browser only with your consent. There are benefits to forming a company; a Sociedad Limitada (SL), or buying a ready-made one. Can you evict a non-paying tenant who cites covid as the reason?

[View on Google]. We help Peters new bar business become a dream come true! This involves a visit to your local office with originals and copies of your deed of incorporation, NIE, tax forms and form TA0521. Professionals' proficiency in English monitored.

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. You also have the option to opt-out of these cookies.

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. 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.

Resolution of tax enquiries related to your activity. The system doesnt apply if youre a sole trader. In order to start a business, you must first have the right to live and work in Spain. The Spanish Govt can help! A company is a legal person in its own right, so youll need a tax identification code thats specific to it. Depending on your profession or the type of business you want to carry out, you may also need to apply for a licence. In order to register your new company, youll need to do three things. There are some reductions for those under 30 years of age or a temporary discount for example where the person has been unemployed and has decided to become self-employed. Next, youll need to open a business bank account in the name of your new company and deposit the minimum investment amount. Are Russian and Ukrainians still buying property in Spain? For example, setting-up as an autonomo does not require 3000 of capital as would be the case with a limited company in Spain. After all, nothing beats the satisfaction of building your own company and doing your own thing. If youre not an EU citizen, youll also need to have a valid visa and a valid work permit.

These include: Of course, if you run a business, youll have to pay taxes. This will allow you to benefit from the existing clientele or area where the premises are located and so begin your business from a privileged position.

This category only includes cookies that ensures basic functionalities and security features of the website. Old-world bank accounts only work properly in one country. If you are not alone, two or more proprietors can set up a Comunidad de Bienes (CB). He lived in Ireland for more than two years to improve his English language skills and his experience as a lawyer. The other major expense that we mentioned above that an Autonomo will have is Social Security. The minimum amount works out at about 265 a month.

As a freelance professional, your clients retain a percentage of your invoice (currently set at 18%) and pay it to the tax authorities on your behalf as an advance on your tax payments. Ensure legal interests are protected, especially when creating a company with several partners. Following successful transfer of the business or premises, full tax and accounting services as well as any design or architectural/building services required. Yes. This process should take about 15 days. Unfortunately not legally. However, finding work may get a bit tricky.

It will also have information on how the company is run. 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. The dividend allowance ranges from 2,000 to 5,000, In a nutshell, an e-invoice is a paper-free invoice that is stored and sent digitally. A tax return for a self employed person is made annually in June (called I.R.P.F.). You have to pay social security for any employees and give them contracts. Thank you to Rafael for helping us clarify how our EU Long Term Resident Permit could help us in moving to Spain. Once youre sure setting up a company is right for you, you need to check if the name youve chosen is available. If youre still filing your VAT Returns to HM Revenue and Customs (HMRC) through the post, weve got news for you. Personal tax-free allowances include a 5,500 personal allowance and child allowances. If you set up a company, it is more complicated and you are going to probably need help to do it. We are grateful for his dedication and excellent service.

However, after five years you can apply for long-term Spanish resident status. You must register for social security under the special regime for autonomous workers (RETA) within 30 days of registering with the tax authorities. 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.

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