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 2021. 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.
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 with a series of tax-related matters only an accountant can explain, therefore, do not hesitate to ask for advice and guidance in this direction.
Making investments in Spain
Spain is a great destination for business and home to a large number of foreign and local companies. The business climate is quite appreciated due to the many advantages offered. Besides simplified company incorporation that allows entrepreneurs to have a fast start on the market, there are also other benefits.
A skilled and multilingual workforce, excellent infrastructure, a great gateway to important international markets, and beneficial business policies represent only a few of the attributes of the business environment of Spain, highly appreciated by domestic and foreign investors. We present you some interesting facts and figures that underline the business trends and economy of Spain:
- Nearly USD 752 billion was the total FDI stock in 2019 for Spain.
- The 2020 Doing Business report ranked Spain 30th out of 190 worldwide economies in terms of simplified business.
- Around 70% of the total FDIs in Spain come from countries like France, the Netherlands, Germany, the UK, Luxembourg, and Italy, the key investors of this country.
- 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.
- Manufacturing, financial and insurance, wholesale and retail trade, tourism, and real estate are the sectors in which most of FDIs are directed.
If you believe that a sole trader in Spain is the right business choice for you, we suggest you contact our Spanish team of company formation representatives for guidance. Our clients rely on professionalism and proficiency when working with us for setting up a company in Spain.