There are many ways to set up businesses in Spain. Whether youa re to start a small business or larger operation it is necessary to set up the Spanish company that best suits your needs.
Suitable for small businesses. Owner's personal assets are linked to the business. Owner pays social security costs. Tax is paid provisionally set at 20% of each quarter's profit. At year end, all cost and taxes paid are calculated to see if the sole proprietor is due a rebate or has to pay additional tax. The income tax is progressive, ie the higher the annual income the higher the tax. VAT (IVA) is paid quarterly. Financial statements are submitted prepared by calendar year and the first year must end on 31 December.
Spain applies a voluntary modulation taxation for small businesses. This means that the tax authorities pre calculates the tax for the business based on the location, size, number of employees, industry, etc. Then a fixed figure of tax to pay each month is calculated. This module replaces the VAT tax, social security contributions and income tax. The entrepreneur will not declare income, avoid the requirement of submitting accounts, and are free from tax audit. The choice between conventional taxation and taxation module is the entrepreneur's own decision. If the modulation scheme is applicable must be done for at least three years.
The rules are quite the same as for a sole proprietor. The difference is that the number of partner is at least two. The partners are jointly and individually liable for the business. A creditor may thus seek liability from each of the partners. It is required that you have complete trust in each other. It can sometimes be cheaper for spouses to operate a sole proprietorship where the other spouse is employed instead of the spouses jointly operates a trading company.
The rules are quite the same as for a sole proprietor. The difference is that the number of partner is at least two. At least one partner has unlimited liability and at least one partner is responsible only to their stake in the company.
The capital is divided into shares. There is only have one partner. The company may have several different lines of business. Taxation is set at 35%. The person appointed as the company's representative pays social security costs of a fixed amount, just over 200 euro per month , from the month the business started.
The minimum start up capital is 3006 euros and paid at any bank. The amount is on hold until the company is fully registered. The cost to form it varies but can be estimated at about €1.500 The amount start up costs must be paid in advance by the owners because the share capital must not be touched until the company is fully registered.
VAT is paid quarterly. If the incoming tax exceeds the outgoing tax this is not -refundable amount, but rolled over to the next tax period. Social security costs for employees are paid monthly. Yearly, quarterly and monthly accounts should be presented by external auditors.
The rules are very similar if private limited company. The minimum capital amounts is 60,000 euros This means that only very large companies requiring high capital are interested in this enterprise.
The Company shall be at least 5 % of shares in a foreign company. When possession has lasted at least one year 's dividend is tax-free. The Spanish company can then distribute their profit anywhere in the world. This corporate structure is very suitable for serious international tax planning.