Startup registering in Spain: choosing the legal form of business
- Anastasia Maslo
- Nov 4, 2024
- 3 min read
Starting a series of posts: How to found a startup in Spain.
Spain is a country with an emerging startup ecosystem that attracts entrepreneurs from all over the world. Our team decided to start a series of posts that will cover the key steps required to create a startup in Spain: from choosing a legal form to attracting investment and adapting to the local business environment. Ready to launch?
STEP 1: Choose a «suit» for your startup
The first thing is to choose a legal form for your business.
Autónomo |
Autónomo, or sole trader , - Autónomo is the simplest form of business in Spain, ideal for freelancers, small start-ups and entrepreneurs who want to start with minimal costs. |
✅ Benefits:
Simple and fast: Registration does not require a lot of time and money.
Flexible: You are your own boss, setting your own rules and working hours.
Low entry threshold: No need for authorized capital or notary services.
⚠️ Features:
Full liability: You are liable for debts with all your property.
Taxes: The tax burden can be higher, especially at high incomes (15-47% in 2024).
Social contributions: Mandatory monthly contributions (from 86 euros per month in 2024), even if you have no income.
❓ When to choose Autónomo?
At the start: Quick and inexpensive launch, testing of the idea.
Small project: If the business does not involve large turnovers and risks.
Freelancing: Freedom and flexibility to work for yourself.
❗ Important:
Consult the experts: Evaluate the pros and cons before deciding.
Plan your finances: Factor in taxes and deductions into your budget.
Think about the future: If the business is growing or needs investment, consider establishing a legal entity.
Autónomo is a great start in Spain, but it's important to understand the nuances!
Sociedad Limitada (SL) |
SL is the most popular form of legal entity in Spain, analogous to LLC. |
✅ Benefits:
Limited Liability: You risk only the capital invested, personal assets are protected.
Flexible management: Distribute shares, attract co-founders and investors.
Attractive to investors: Transparent structure and limited liability increase trust.
Legal protection: Higher level of protection than a sole proprietorship (Autónomo).
⚠️ Features:
Minimum authorized capital: €3000.
Registration and reporting: The process is more complicated than for Autónomo, requires documents and fees.
Taxation: Corporate income tax - 25% (2024).
❓ When to choose SL?
Planning to attract investment
Multiple founders
Want to protect personal assets
Seeking rapid growth
SL is a solid foundation for scaling your business in Spain!
Sociedad Anónima (SA) |
SA is the Spanish equivalent of a public company, ideal for ambitious start-ups aiming for large-scale growth and attracting serious investment. |
✅ Benefits:
Limited liability: Shareholders risk only the invested funds.
Capital Raising: The issuance of shares gives access to a wide range of investors.
Prestige and credibility: SA builds credibility with major clients and partners.
Management flexibility: Possibility to create a complex management structure.
⚠️ Features:
High authorized capital: 60,000 euros, 25% is contributed upon registration.
Complexity of registration and management: The process of registration and management of the company requires more effort and knowledge.
Taxation: Corporate income tax (25%) + dividend tax.
❓ When to choose SA?
Planning large-scale growth and going public
Working with large clients
You need a complex management structure
SA is the choice for those who think globally and are ready for big challenges. If you dream of serious business and attracting large investments, SA is your way to success!
Our team is always ready to help sort things out and find the best option for your business 🔻
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