How much does it cost to start a business in Spain?

We’ve all had those moments. The “eureka” ones that often strike when under the influence of a couple of glasses of wine, that say this: “wouldn’t this be a great place to open a bar /start-up/fashion boutique”. But have you really thought about how much it would cost to do so? Next time inspiration strikes, think about how much it really costs to open a business in Spain…

Costs of setting up a business in Spain – basic structure

First of all, decide what kind of business structure you’d like to operate under. The easiest and cheapest way to do things in Spain would be to work either as a self-employed “autónomo”, Assets Community (“Communidad de Bienes”) or Civil Society (“Sociedad Civil”).

  • Working freelance will set you back costs of just under €300 monthly in social security payments (there’s a discount during the first two years), as well as 7-20% of your net profits in income tax. And don’t forget about VAT. See here for more information about autónomo payments in Spain.
  • A Comunidad de Bienes is an agreement between two or more freelancers that allows them to share assets. As well as the “autónomo” payments, expect to pay taxes on any assets you bring to the equation if you choose to set up this kind of Business.
  • A Sociedad Civil, or group of freelancers, currently pays similar rates. However, there is talk of beginning to charge this type of association the higher-rate Societies Tax rather than Income Tax as of 2016, which would make it a far less attractive option.
  • If you’re looking to start up a limited company (one where the amount you can stand to lose is limited), expect to pay at least €1000 euros in administrative start-up costs as well as your taxes.

Setting up shop in Spain – additional costs (employees, licences…)

If you’re looking to hire staff, you can either contract freelancers (factor in similar costs to the above) or hire employees. Hiring employees, according to this excellent Spanish-language article, will cost you around €400/month for risk-prevention insurance and social security (and don’t forget that they’ll also have to pay income tax on the wages they earn).

Looking to open your own site? Bear in mind that, depending on what it’s used for, you’ll need to shell out for a licence. A bar licence will cost around €1,500. You’ll also need a licence on any reformation you do to the property.

And on top of that, don’t forget to add in the cost of hiring an accountant. In case you hadn’t worked out from this article, you’re going to need one!

…Is that business idea still looking so attractive now that you know the real cost of opening a business in Spain?

 

Text and photos by Penelope

Posted in Tax

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