Register a Business in Spain: Everything You Need to Know

Spain in 2025 continues to be one of the most attractive destinations for international business expansion in Europe. Its robust economy, access to the EU single market, and favorable trade agreements make it a prime choice for global entrepreneurs. Major cities like Madrid, Barcelona, and Valencia are thriving hubs for technology, financial services, tourism, and manufacturing, while regions like Andalusia and Basque Country are emerging centers for renewable energy and logistics.

Foreign companies planning to register a Business in Spain benefit from a well-defined legal framework, strong infrastructure, and increasing government support for innovation and startups. Spain’s business environment supports multiple entry strategies—whether you are testing the market with a small team or establishing a fully operational subsidiary for long-term growth.

This guide will walk you through every aspect of Spanish company registration, including market entry options, business structures, step-by-step incorporation process, compliance obligations, required documentation, costs, challenges, and Employer of Record (EOR) alternatives.

Table of Contents

• Exploring Your Market Entry Options in Spain
• Business Structures You Can Choose From
• Comparing Business Structure Options
• How to Choose the Right Business Model for Your Operations
• Step-by-Step Guide to Company Registration in Spain
• Key Documents Required to Register Your Spanish Company
• Post-Incorporation Essentials You Shouldn’t Ignore in Spain
• Additional Business Licenses and Registrations You Might Need in Spain
• Timeframe to Set Up a Business in Spain
• What Does It Cost to Incorporate a Company in Spain?
• Obstacles Global Founders May Face While Setting Up in Spain
• Incorporating as a Foreign-Owned Company: A Special Path
• Employer of Record: A Simpler Way to Hire in Spain Without Incorporation
• Why Asanify is the Ideal Partner for Global Companies Entering Spain
• Summary & Final Takeaways
• FAQs

Exploring Your Market Entry Options in Spain

Before starting operations in Spain, businesses must first decide how they want to enter the market. There are two main approaches that international companies typically consider:

Incorporating a Local Business Entity

Incorporating in Spain involves formal registration with the Commercial Registry (Registro Mercantil) and compliance with Spanish corporate, tax, and labor laws. It requires obtaining a Tax Identification Number (NIF) for the company and, in some cases, NIE (Número de Identificación de Extranjero) for foreign directors and shareholders.

This approach is ideal if you plan to:

• Operate long-term in Spain
  
• Hire multiple employees
  
• Open physical offices or retail spaces
  
• Raise investment or issue shares
  

Incorporation provides credibility, investor confidence, and operational flexibility. However, it also comes with ongoing compliance, tax obligations, and administrative requirements.

Hiring Through an Employer of Record (EOR)

If you are not ready for full incorporation, an Employer of Record (EOR) allows you to hire employees in Spain without setting up a local entity. The EOR becomes the legal employer on paper, handling employment contracts, payroll, tax withholdings, and social security contributions, while you maintain full control over day-to-day operations.

This model is best suited for:

• Testing the Spanish market with a small team
  
• Launching pilot projects or short-term assignments
  
• Hiring remote employees quickly without administrative overhead
  
• Minimizing compliance risks and avoiding delays in market entry
  

Business Structures You Can Choose From

Spain provides several business entity types, each with unique liability, tax, and compliance requirements. Here are the most common structures:

• Sole Trader (Autónomo) – Fastest and simplest option, but the owner has unlimited personal liability for debts.
  
• Civil Partnership (Sociedad Civil) – Low-cost and flexible for small ventures with two or more partners; profits are taxed as personal income.
  
• General Partnership (Sociedad Colectiva) – Partners share profits and unlimited liability; commonly used for local service or trading businesses.
  
• Limited Partnership (Sociedad Comanditaria) – Has both general partners with unlimited liability and limited partners whose liability is restricted to their investment.
  
• Limited Liability Company (SL/SRL – Sociedad Limitada) – Most popular for SMEs and foreign investors; requires a minimum share capital of €3,000 and provides full limited liability protection.
  
• Public Limited Company (SA – Sociedad Anónima) – Designed for large enterprises, fundraising, and public share issuance; requires a minimum share capital of €60,000.
  
• Branch Office – An extension of a foreign company that operates locally but does not form a separate legal entity.
  

Comparing Business Structure Options

Structure	Ownership	Liability	Taxation	Compliance	Best For
Sole Trader	1 owner	Unlimited	Personal income tax	Low	Freelancers and micro-businesses
Sociedad Civil	2+ partners	Unlimited	Personal income tax	Low	Small co-owned ventures
Sociedad Colectiva	2+ partners	Unlimited	Personal income tax	Moderate	Local trading or service firms
Sociedad Comanditaria	1+ general, 1+ limited partner	Mixed	Personal/Corporate tax	Moderate	Joint ventures and partnerships
SL/SRL	1+ shareholders	Limited	Corporate tax	Moderate	SMEs and foreign subsidiaries
SA	1+ shareholders	Limited	Corporate tax	High	Large corporations and fundraising
Branch Office	Parent company	Parent liable	Corporate tax on Spanish revenue	Moderate	Market testing by foreign companies

How to Choose the Right Business Model for Your Operations

Choosing the best structure depends on your size, liability preference, and growth strategy:

• Freelancers and small partnerships should start with Sole Trader or Sociedad Civil.
  
• SMEs and foreign investors usually opt for SL/SRL due to its limited liability and credibility.
  
• Large corporations or companies planning to raise capital often choose SA.
  
• Branch offices are ideal for testing the market without creating a new legal entity.
  
• EOR is perfect for businesses that need speed, flexibility, and low compliance risk.
  

Suggested Read: Understanding Labour Laws in Spain: Contracts, Wages, and Termination Rules

Step-by-Step Guide to Company Registration in Spain

1. Decide on your legal structure (SL, SA, branch office, etc.).
   
2. Reserve a company name with the Central Mercantile Registry (Registro Mercantil Central).
   
3. Obtain NIF for the company and NIE for all foreign shareholders or directors.
   
4. Deposit the required share capital in a Spanish bank account and obtain a certificate.
   
5. Draft and notarize Articles of Association (Escritura de Constitución).
   
6. Register with the Commercial Registry (Registro Mercantil) to obtain your company registration certificate.
   
7. Register for taxes with the Spanish Tax Agency (Agencia Tributaria).
   
8. Register for social security (Seguridad Social) if you plan to hire employees.
   
9. Register for VAT (IVA) if your activity requires it.
   

Key Documents Required to Register Your Spanish Company

• Passports or IDs of all shareholders and directors
  
• NIE numbers for foreign investors or directors
  
• Proof of residential address for directors and shareholders
  
• Bank certificate confirming share capital deposit
  
• Articles of Association signed before a notary
  
• Proof of registered office address in Spain
  
• UBO declaration for compliance with EU anti-money laundering directives
  

Post-Incorporation Essentials You Shouldn’t Ignore in Spain

Once incorporated, companies must ensure ongoing legal and tax compliance:

• Register for corporate income tax and VAT
  
• Set up payroll and register for social security contributions
  
• Submit annual accounts to the Commercial Registry
  
• File corporate tax returns and VAT declarations on time
  
• Maintain statutory books, accounting records, and employee documentation
  

Additional Business Licenses and Registrations You Might Need in Spain

Depending on your sector, additional approvals may be required:

• Municipal or local trade licenses for offices, shops, or warehouses
  
• EORI registration for EU import/export activities
  
• Sector-specific permits for finance, food, healthcare, or education businesses
  
• Environmental and safety permits for industrial or manufacturing operations
  

Timeframe to Set Up a Business in Spain

Step	Estimated Duration
Reserve company name and obtain NIF/NIE	2–4 business days
Draft and notarize Articles of Association	2–4 business days
Deposit share capital and get bank confirmation	2–5 business days
Register with Commercial Registry	3–7 business days
Tax and social security registration	3–7 business days
Total Time to Register	10–20 business days

Delays may occur if foreign documents require translation, apostille, or additional regulatory approvals.

What Does It Cost to Incorporate a Company in Spain?

Typical incorporation costs include:

• Company registration fees: €200–€400
  
• Notary and legal fees: €600–€1,500
  
• Minimum share capital: €3,000 for SL, €60,000 for SA
  
• Accounting and compliance services: €800–€2,000
  
• Optional licenses or permits: €200–€1,000
  

Average total cost: €1,500–€4,000 depending on company type and professional assistance.

Obstacles Global Founders May Face While Setting Up in Spain

• Requirement for NIE numbers for all foreign directors and shareholders
  
• Document translation and notarization into Spanish
  
• Strict banking requirements for opening company accounts
  
• Understanding Spanish tax, labor, and social security compliance
  
• Sector-specific approvals for regulated industries like finance or energy
  

Incorporating as a Foreign-Owned Company: A Special Path

Foreign businesses can enter Spain via:

• Wholly-Owned Subsidiary (SL or SA) – Full control with limited liability
  
• Branch Office – Extension of the foreign parent company
  
• Representative Office – For market research or liaison only; cannot generate revenue
  

Most sectors allow 100% foreign ownership, but strategic industries like telecom, defense, and energy may require prior FDI approval.

Employer of Record: A Simpler Way to Hire in Spain Without Incorporation

Entering the Spanish market does not always require setting up a local company. An Employer of Record (EOR) provides a fast and compliant way to hire employees in Spain without the time and cost of full incorporation. This allows foreign businesses to focus on operations while the EOR manages employment contracts, payroll, and regulatory compliance.

• EOR allows foreign companies to hire Spanish employees without forming an SL or SA.
• The EOR serves as the legal employer, handling contracts, payroll, taxes, and social security contributions.
• Your company maintains control over day-to-day work, roles, and performance management.
• Ideal for market testing, pilot projects, or setting up small local teams quickly.
• EOR ensures compliance with Spanish labor laws, reducing risks of misclassification and penalties.
• Manages statutory benefits like paid leave, pensions, and employee insurance contributions.
• Saves time, reduces costs, and enables fast, flexible, and fully compliant market entry.
• Suggested Read: Employer of Record Spain: Ultimate 2025 Guide

Suggested Read: A Detailed Guide on Employer of Record Spain 2025

Why Asanify is the Ideal Partner for Global Companies Entering Spain

Expanding into Spain involves managing local legal, tax, and HR obligations, which can be complex for international companies. Asanify simplifies this process by offering both company incorporation and Employer of Record (EOR) solutions, ensuring quick, risk-free, and compliant market entry.

• Asanify provides end-to-end support for incorporation and EOR-based hiring in Spain.
• We handle company registration, payroll processing, tax setup, and compliance, so you can focus on growing your business.
• Our EOR solution allows you to hire Spanish employees within days without creating a legal entity.
• We ensure full compliance with Spanish labor laws, tax obligations, and social security contributions.
• Trusted by startups, SMEs, and global enterprises, Asanify offers local expertise, transparent pricing, and seamless market entry.

Summary & Final Takeaways

Growing into Spain offers tremendous opportunities for international companies, but selecting the right market entry route is essential. Most businesses will consider two primary options: incorporating a local entity such as an SL or SA, or hiring through an Employer of Record (EOR).

If your objective is to establish a long-term presence, scale operations, or maintain full operational control, setting up a registered Spanish company is the ideal path. However, if your goal is rapid market entry, testing the Spanish market, or hiring a small team without the administrative burden of incorporation, an EOR allows you to operate quickly while staying fully compliant.

FAQs

Not to be considered as tax, legal, financial or HR advice. Regulations change over time so please consult a lawyer, accountant  or Labour Law  expert for specific guidance.