A sole trader in Spain is known as empresario individual or autonomo and it represents the simplest business structure available in this country. There are particular requirements to consider when opening a sole proprietorship in Spain, therefore, you are invited to talk to our company formation experts in Spain and ask for comprehensive assistance and support.
| Quick Facts | |
|---|---|
| Who can establish a sole proprietorship in Spain? | Foreign and local businessmen interested in commercial activities in Spain. |
|
Also known as |
Autonomo/Empresario Individual |
|
Registration authority |
Registro Mercantil |
| Responsibilities | A sole trader in Spain is liable for every business contract signed with local/foreign partners/ fiscal declarations, losses, etc. |
| License |
Must be issued before starting the activities in Spain. |
| Application for VAT |
IVA is the VAT in Spain. Our local agents can help you register for the payment of such a tax with the Spanish office. |
| Bank account required (YES/NO) |
YES |
| What is the NIF number? |
The tax ID required for sole traders in Spain from foreign countries |
| Work permits for non-EU citizens |
Mandatory |
| Is sole proprietorship in Spain a legal entity? | Sole proprietorships in Spain are not a separate legal entities from the business owners. |
| Can hire staff (YES/NO) |
YES |
| Who signs the contracts/documents of a sole trader? |
The owner of the business |
| Other required registration for sole traders in Spain |
With the social security system in Spain, called Regimen Especial de Trabajadores Autonomos (RETA) |
| Personal tax advisor |
Required. Our Spanish accountants can offer complete services. |
| Working with our Spanish agents | We can manage the formalities for registering a sole proprietorship in Spain, collaborate with the local auuthorities, and many more. |
Table of Contents
Conditions for setting up a sole trader in Spain
Sole traders in Spain are accountable for profits and losses in the firm. However, below are a few important conditions for setting up a sole proprietorship in Spain:
- NIE or Numero de Identification de Extranjeros is an important document issued for foreigners who reside in Spain.
- NIF is the Tax Identification Number for foreigners interested in doing business in Spain. This serves as a tax ID and can be assigned to NIE.
- IAE is the Impuesto de Actividiades Economicas for which a foreigner must register.
- Registration for social security contributions is an obligation in Spain. Such taxes must be paid each month.
- The tax office in Spain (Agencia Tributaria) requires information about the commercial activities, the founder’s name, and the applicable taxation system.
- A Spanish bank account is required for a sole trader in this country.
These are only a few of the conditions for opening a sole proprietorship in Spain in 2025. We suggest you address your requests to one of our Spanish company formation agents as other legal aspects must be fulfilled. They can help you with opening a company in Spain as soon as possible. Please explore the following infographic on this subject:
Getting the business license for a sole proprietorship in Spain
To be autonomous in Spain you must first have a business license. The opening license in Spain is obtained from the Spanish Town Council where you must present the following:
- proof of business address and premises map/location,
- brief description of the activities of the sole trader in Spain,
- proof of local tax payment,
- tax books in certain cases.
It is good to know that there is a so-called “licencia de apertura” or “opening license” that must be obtained for owners of hotels, cafes, bars, restaurants in Spain, etc. In the case of travel agencies, a title license is required, which is issued in the autonomous communities by the General Directorate of Tourism. One should note that the autonomous regions of Spain may impose various conditions for obtaining a business license, which is why we recommend that you work with our Spanish agents.
Do I need health insurance for a sole trader in Spain?
Yes, if you want to benefit from free healthcare as a sole trader in Spain, you need to register for social security contribution payments. A health insurance fund is needed, and the best part is that the entire family can be covered, mainly the ones registered at the domicile in Spain. This is another important aspect you need to discuss with one of our Spanish company formation specialists.
Deductible expenses for sole traders in Spain
Sole proprietorships in Spain are subject to different deductible expenses a Spanish agent with experience in the field can explain. Here are a few details that should be in your attention:
- A part of the rental costs can be deducted.
- Business advertising, utility bills, and even transportation can be deducted, but not entirely.
- Membership fees can also be deducted.
It is required to have the support of a specialist in this field and benefit from complete information about the deductible expenses linked to a sole trader in Spain. You can count on our company formation agents in Spain right from the start, as they offer complete support and varied facilities for international entrepreneurs in Spain.
Here is a video presentation about the steps for opening a sole proprietorship in Spain:
Asking for the services of an accountant in Spain
No matter the type of business you want to set up in Spain, it is required to have the support of an experienced accountant in Spain who can help with a series of accounting aspects. Sole traders in Spain must conform to a series of tax-related matters only an accountant can explain, therefore, do not hesitate to ask for advice and guidance from our accountants in Spain.
Differences between LLC and sole proprietorship in Spain
When you decide to start a business in Spain as a foreigner, you need to consider all aspects. In the case of a limited liability company in Spain (Spanish SL or Sociedad Limitada), entrepreneurs benefit from better protection and more credibility, but complex accounting requirements are involved, in addition to high administrative costs. In the case of sole traders in Spain, there are lower startup costs, not so many administrative costs, and a simplified tax structure, among others. In fact, the business setup is faster in the case of sole proprietorship in Spain, a structure with simple management.
If you want protection of personal assets, plan to hire staff, and an initial capital of EUR 3,000, then the limited liability company is the right business structure for you. But if you want to test the market first, operate as a freelancer, and benefit from lower startup and administrative costs, then the sole trader is the preferred option in this case. Nevertheless, you can get expert advice in both cases, so don’t hesitate to contact our specialists in company formation in Spain and learn more about LLCs and sole proprietorship in Spain.
Making investments in Spain
For Spain, the year 2024 was an extremely fruitful one from an economic point of view, with figures above expectations. Here are some interesting data in this case:
- Around 3.1% was the economic growth recorded by Spain at the end of 2024, more than double the initial estimates.
- Around 2.8% was the inflation recorded in Spain at the end of 2024. This figure is expected to decrease to 2.2% in 2025.
- An economic growth of around 2.3% is expected for 2025 and around 2.1% in 2026.
If you believe that a sole trader in Spain is the right business choice for you, we suggest you contact our agents with experience in company incorporation in Spain for guidance. Our clients rely on professionalism and proficiency when working with us for setting up a company in Spain.