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Open a Startup in Spain

Open a Startup in Spain

Several European states have created a competitive environment for the development of the startup industry and Spain is one of such countries. Its main startup centers are Madrid and Barcelona, two major cities that are known as being among the best cities for developing an economic activity in this country. 

Spain represents a vibrant business center for the startup industry, being one of the most developed European countries in this sense. It must be noted for those who want to open a company in Spain as a startup business that at the beginning of the 2010s, the startup industry was lacking a proper environment, and the market at that time had only few such businesses. We invite you to discuss with our company formation agents in Spain and find out more about how to open a startup in Barcelona or in any city in Spain.

Madrid and Barcelona are great cities for startups in Spain

Madrid and Barcelona positioned themselves quite fast as major startup centers, which attracted talent and businessmen interested in innovation and now these cities rank amongst the most important startup centers in Europe, along with European cities that are very well known for their investments in the startup sector. Considering these aspects, businessmen who want to enter the startup industry can easily select Spain for this specific activity and extensive information on the subject can be presented by our team of Spanish company formation experts, who are prepared to provide you with step-to-step assistance in opening a local startup

Entrepreneurs who want to open a Spanish business as a startup company can benefit from the advantages offered by this market and in the case of those who need legal advice on the steps for registering a business or on the legislation regulating the field, our specialists in company registration in Spain can provide legal representation or information on any question related to this industry. 

Our accountants in Spain are at your disposal with a series of services designed to serve the good functioning of the company from a financial point of view and not only. Where appropriate, we can offer various measures if financial risks are discovered in the company. On the other hand, you should know that we can take care of human resources and more precisely the administration of the recruitment and registration formalities of employees.

Why open a startup in Barcelona?

Businessmen who want to open a startup in Spain can always choose Barcelona for this particular wish, as this city ranks as one of the most important startup markets in Europe, next to cities such as Cambridge, Paris, or Stockholm. However, those who want to open a company in Spain show know that other Spanish cities provide numerous opportunities related to the startup industry. 

In SpainBarcelona and Madrid are the main hubs for startup companies and Madrid tops Barcelona on the total number of startup businesses, but Barcelona is the most important destination for startup companies as this city has the highest level with regards to the startup operations. If you want to open a startup, you can receive legal guidance and incorporation services from our team of consultants in company formation in Spain.

One can easily register a startup in Spain in any Spanish region, but Barcelona is currently qualified in providing the most suitable environment, as it represents a business accelerator due to the number of investments in this field, the startup activities developed here and the large number of companies. Some of the highlights that recommend Barcelona as the main location for a startup in Spain are presented below:

  • • in 2019, Barcelona had a total of 1,197 startup companies (a little less than Madrid, where there were 1,235 companies);
  • • in 2018, Barcelona accounted for the highest level of investments, of EUR 871 million, compared to Madrid, which, in the same year, accounted for only EUR 340 million;
  • • from the total level of investments in Spanish startupsBarcelona accounts for 66.4% of all the investments;
  • • in 2018, 29 startups in Spain were able to raise investments of more than EUR 10 million;
  • • out of these, 12 startups were registered in Barcelona, the city being the 5th most important European startup destination with regards to the value of investments

The law applicable to startups in Spain

One of the main rules of law applied to a startup in Spain is the commercial legislation, as a startup simply defines a commercial entity, incorporated under one of the business forms available here, that is set up for the purpose of selling a product or a service, the difference from another type of company being that the Spanish startup has a technological component which can vary from a company to another. 

Another characteristic of a startup in Spain is that the business must always address to the local or the international markets with an innovative idea, this being a central point of any startup business. Under a legislative proposal of the Spanish government – the Law for the Promotion of the Startup Ecosystem, the Spanish startup is seen as having the following characteristics: entities funded by entrepreneurs that are technology-based, which have an innovative component and which have the capacity of rapid growth. 

Some of the basic rules of law that are currently applied to Spanish startups are the following: the Law 11/2013 of July 26, which establishes measures through which investors can be supported in this country, the Law 14/203 of September 27, which provides other regulations concerning entrepreneurs and the Law 5/2015 of April 27, which prescribes the legal framework with regards to the manner in which crowdfunding activities can be carried out here. Our team of Spanish company formation specialists can present extensive information on these rules of law. 

Crowdfunding is a modern means for raising capital, that is usually employed by businesses that have a technology-based business model. The idea promoted by crowdfunding platforms is that the general public or small investors can invest a small sum of money in a business that needs to raise capital, as opposed to obtaining the capital from conventional methods, such as bank credits. 

Basic costs of opening a startup in Spain

startup in Spain defines a type of business that is incorporated following the standard incorporation process and which invests in a new technology or in a new product that can be used in the financial sector, medical industry and any other sectors that can benefit from the usage of new technologies. 

Consequently, the investor will begin the process of company formation in Spain by selecting a suitable business form and most commonly, the limited liability company and the joint stock company are used for this purpose. Depending on the selected company type, the investors should prepare for a startup in Spain a capital or EUR 3,000 or EUR 60,000. 

Other basic costs associated with the procedure of opening a company in Spain are the following: the company reservation name (EUR 15), the registration with the Spanish Business Registry (EUR 100), notary expenses (they can vary between EUR 100 – EUR 300), registering the company’s trademark (it can vary between EUR 93 – EUR 144), these being only few of the costs one should expect when opening a startup in Spain; for consultancy services regarding the financial aspects you can rely on the advice of our specialists in company formation in Spain.  

Main steps for opening a startup in Spain

According to the information presented by the Ministry of Industry, Commerce and Tourism, the registration of a startup in Spain begins following the same steps that are prescribed by the national law for other business activities. Our team of consultants in comapany formation in Spain can present the entire procedure if you want to invest in this country. In most cases, the startup in Spain will be registered as a limited liability company or as a corporation, although other business forms are available as well, they are not recommended due to their characteristics. 

startup in Spain is basically a legal entity that is incorporated following the standard registration procedures. As such, the founders of the company should complete the formalities involved in this process.  For instance, an investor who is interested in opening a company in Spain as a startup business will generally register a limited company, as mentioned above. The startup can also take the form of other legal entities, but in practice, most of the startups are incorporated as private limited companies, due to the advantages provided by this corporate structure. Depending on the selected business form, the investor will then have to prepare all the documents that have to be submitted with the local institutions. 

In order to gain legal personality, all companies are set up based on a founding document, such as the articles of association, the partnership agreement, etc., which has to be notarized and then submitted to various institutions, such as the Mercantile Registry. Once the company gains legal personality and it is registered with the Mercantile Registry, the investors will be able to register the startup in Spain for tax purposes. 

Mind that a startup business can benefit from various tax deductions or incentives, depending on its specific business activity; for information on this subject you can address to our team of consultants in company formation in Spain, who can present to you the current tax legislation applicable to these types of businesses. Considering that a startup in Spain is based on an innovative idea or product, it is generally necessary to protect the respective idea against other businesses. This is why, after the incorporation of the company, the investors should verify the ways in which they can protect their idea. 

How can businesses protect a product or service in Spain? 

The service or product offered by a startup in Spain can be protected against other entities through trademark or patent registration. Spain follows the Nice Classification system (the 11th edition), which presents the standard classification of goods and services. A company that wants to protect its product or service can apply for national or international trademark registration. 

The legislation, the steps and the forms necessary for this process can be found on the website of the Ministry of Industry, Commerce and Tourism working under the Spanish Government. A startup in Spain can also apply for the protection of an invention or it can also protect an industrial design, besides registering for trademark protection. 

You are invited to address to our team of consultants in company registration in Spain for advice on how to open a Spanish startup. Our team can provide step-to-step guidance and can represent you in the relation with the local institutions when registering a local trademark or a patent. Do not hesitate to receive professional assistance in this process.

Why open a startup in Spain? 

There are many reasons for which foreign investors should opt for opening a company in Spain in the startup sector. The Spanish authorities have invested in developing this field and now, depending on the type of startup activity the investor wants to develop here, one can participate in numerous business accelerators, designed for sectors such as agri-food, ICT, automotive, fintech, the protection of the environment and others. 

Besides these, foreign investors can benefit from numerous sources of financing their startup in Spain. Such businesses can obtain professional assistance from the European Business Angel Network, which comprises more than 150 organizations from European states. In Spain, one can address to the Spanish Association of Business Angel Networks

Information about Spanish startups

As we mentioned at the beginning of the article, Madrid and Barcelona are the top preferences for investing in a startup in Spain, with Barcelona as the main destination for this purpose. Investors have the tendency of investing in businesses related to e-commerce, health, transportation and numerous startup companies have created mobile apps. In a study analyzing the startup market in Spain for 2018, the following was revealed: 

  • Spain accounts for 4,115 startups, out of which 1,235 were located in Madrid
  • however, with regards to the revenues obtained from this sector, Barcelona leads with EUR 871 million; 
  • in 2018, the total investment revenues obtained by the startup industry accounted for EUR 1.3 billion; 
  • Barcelona stands out as the 4th global hub in this sector when we refer to investments; 
  • the city has experienced a massive growth, considering that in 2017, the value of investments accounted for EUR 434 million. 

Spain is a large market for the job opportunities created by the startup industry, ranking as the 6th European country on this matter. Barcelona is the 2nd European city regarding the number of jobs created by businesses operating as a startup in Spain, and in 2018 it accounted for 72,500 specialists in the field.  

Investment trends in the startup industry in Spain

The level of investments in the startup industry in Spain is one that could determine the country in becoming a startup nation. Besides the investments and the large number of companies one can find in Barcelona and Madrid, the country is characterized by relevant investment projects in other major cities in Spain, some of the key aspects of the industry being the following:

  1. in 2018, Madrid  had the largest number of startups, accounting for 1.235 startup companies;
  2. growing startup capitals were, in 2018, Valencia (accounting for 261 companies) and Bilbao (accounting for 60 companies).
  3. in 2018, the top industries in which startup businesses preferred to invest were the following – home industry (34% of the companies), health and wellness (29%), transportation (23%), travel (21%) and enterprise software (14%);
  4. the business models preferred by a startup in Spain were marketplace (62% of the businesses), eCommerce (43%), and mobile applications (42%);
  5. Spain has a growth rate of 15.1% on a year-to-year basis with regards to the increase of the number of professionals in the field, being the 2nd highest most important market in Europe. 

The investors will have to prepare the minimum share capital and the capital for other costs, find a suitable office where they can have their registered address, register for taxes, apply for business permits and other important steps. The overall procedure can be presented by our consultants and we invite you to address to our team of specialists for advice on any inquiry you may have. 

Startup in Barcelona – What business ideas you can consider

Interested in a startup in Barcelona? There are many interesting and doable ideas you can implement as future activities. Here are a few proposals you might want to consider when registering a startup in Barcelona:

  • travel agency with inbound and outbound operations. Exotic destinations are in high demand.
  • A souvenir shop dedicated to tourists visiting Barcelona.
  • Social media management services dedicated to business people who want to focus more on the business side.
  • An ecological cleaning company, considering how much emphasis is placed on protecting the environment.
  • A coffee shop that also offers vegan products to those interested in a healthy diet.
  • Photo services for various fields of interest.
  • A web design firm.
  • Translator services.
  • A catering company with products for vegetarians or with local cuisine.
  • An IT company that offers services for firms and individuals.

Here are some business ideas you can consider when you want to register a startup in Barcelona. Our team is ready to help you and guide your steps towards the correct registration of your future business.

How to implement a successful business idea

A startup can differentiate itself from what already exists on the Spanish market. Before registering a business, it is recommended to consider some ideas and features to help you from the very beginning. For example, the following principles are easy to pursue and implement when thinking about a startup in Spain:

  • Think about innovation and add a technological element to your business. An online business can be an excellent support for innovation and originality.
  • Find the right niche for your new business. It is known that you cannot offer your services and products to all customers, so you will have to find the right niche. An example in this sense can be a vegan restaurant instead of the classic ones that are based on local or international gastronomy. Here, too, innovation and inventiveness will play an important role.
  • Take care of your internal costs and set your budget right from the start. Many business models performed on a small budget at the beginning and are now worth millions of euros. It is natural that you want this too, but you have to pay attention to budgeting and invest wisely.

FAQ about startups in Spain

1. Who can open a startup in Spain?

Any entrepreneur with innovative business ideas can choose Spain for future operations. The legislation is permissive and the business is supported by the Spanish government.

2. What are the right cities to register a business in Spain?

Madrid and Barcelona are two representative cities in Spain, which already host hundreds and perhaps thousands of successful businesses. A startup in Barcelona can be the ideal business in terms of costs, but also potential customers.

3. How can I register a startup in Madrid or Barcelona?

Registering a startup in Madrid or Barcelona is a relatively simple process if you choose your entity type in the first place. A limited liability company is an optimal solution for businesses at the beginning of the road, and the costs are not high.

4. Do I need a business plan for my startup in Spain?

It is recommended to make a business plan that contains all the information about future activities. With the help of our agents in Spain, your business plan can take shape and can be successfully implemented.

5. What costs does a startup in Barcelona involve?

startup in Barcelona involves a series of costs for booking the business name, registration with the authorities, trademark registration, consulting services, minimum capital depending on the chosen entity.

6. Do I need a bank account for my business in Spain?

Of course, a bank account is associated with your new business in Spain. It is good to know that the formalities for opening a bank account are extremely simple. One of our agents can help you.

7. Do I need to register the Spanish startup for taxation?

Of course, any business must be registered for taxation in Spain. This is a condition imposed for the incorporation of a business.

8. How can I protect my new business in Spain?

In addition to registering the trademark, you can also think of an insurance policy. It is even recommended to ensure your small business from the beginning.

9. Is registering a startup in Barcelona simple?

The formalities for registering a startup in Barcelona are simple and allow you to start activities relatively quickly.

10. Why use the services of a specialized agent?

Our agents specialized in company formation in Spain have experience in business registration and can help foreign investors with the necessary formalities. Call us for complete services.

Given the fact that the incorporation procedure will require investors to obtain various licenses and permits, registering with specific institutions and other additional procedures, we highly invite you to talk to our team of consultants in company formation in Spain. Our specialists can assist in any aspect related to the registration of a startup in Spain, so contact us right away for starting company in Spain.