How to Start a Small Business in Spain

Spain is a country of small businesses.

Small businesses are the most common form of enterprise in Spain. According to a 2009 report from the country's policy director general for small and medium businesses, about 94 percent of the country's businesses had fewer than 10 employees, while about half had no employees. About 54 percent of Spain's businesses are sole proprietorships.

Things You'll Need

• National Identity Card, if you are a Spanish citizen
• Passport and tax ID number or a Spanish residency card, if you aren't a Spanish citizen but live in Spain

Instructions

1. File a business opening declaration form and register to pay the economic activities tax for your small business in Spain. Go to the branch of the Spanish national tax agency closest to the business' official address. Present your application form, Modelo 037; identification; and a photocopy of your identification. The tax is levied only if your business earns more than 1 million euros annually. However, you must register no matter how much your business makes.

2. Register with social security at the social security office nearest your business' official address. Present original proof of your economic activities tax registration; your identification; photocopies of the previous two items; and a completed application form, Modelo TA. 0521. If you plan to hire workers for your small business in Spain, contract an accident insurance company and obtain proof of coverage.

3. Obtain licenses if you wish to open a physical store or location for your small business in Spain. Because local governments in Spain have varying rules, ask which licenses are required at the local town hall or regional government office. In Madrid, for example, you will need an opening license, as well as a town planning license if you wish to change anything on the property you have acquired for your business. Auto repair shops, tattoo parlors and other specialty businesses will need additional licenses.

Tips & Warnings

• Find the branch offices nearest to you on the main websites of Spain's government agencies.

• Spanish national tax and social security forms are available on the respective government agencies' websites and at all their local offices.

• Non-Spanish citizens who live in Spain will receive a tax ID number as part of the residency process.

References

• Policy Director General for Small and Medium Businesses: Profile of Small and Medium Businesses 2009
• Sole Proprietors Madrid: Procedures
• "Starting a Business in Spain"; John Howell; 2005

Resources

• Read this Article in Spanish
• Spanish Social Security
• Spanish Tax Agency