Investing in Spain

Establishing a company in Spain has several advantages and benefits. The reasons why investors prefer to do business in Spain can be listed as geographical location and climate, the country’s stable political situation, a growing economy, and opportunities to grow and develop the business to be established.

Since Spain is a member of the EU, the company established in Spain also has the opportunity to trade within the European Union.

To start a business in Spain, firstly, a tax number for foreigners must be obtained. Subsequently, it is required to obtain a tax number for the company to be established.

After acquiring the necessary tax numbers, a bank account is opened in the name of the company, and the necessary documents for the establishment of the company must be signed.

Once all procedures are completed, the company’s registration and the social security registrations of the company employees are prepared, and the process of starting a business in Spain is completed.

What Are the Requirements for Investing in Spain?

● Hold a Spain investor visa
● Prepare a valid business plan or have a draft
● Have a business model that can benefit the Spanish economy and create employment
● Be at least 18 years old
● Have a clean criminal record
● Have health insurance acquired privately or from the government that is valid in Spain
● Have sufficient financial means

What Are the Investment and Business Opportunities in Spain?

Limited Companies are the most common type of business among capital companies in Spain, just like in Turkey.

The reason for the popularity of Limited Companies is that they are easy to set up, can be managed with just one partner, and most importantly, the capital requirement for establishment is lower compared to corporations. However, the fact that the share transfer does not have as simple a procedure as that of a corporation represents a disadvantage.

It is not necessary to have residence or work permission in Spain to establish a company or open a branch. However, to take a role in the company to be established, one must possess a work permit.

If none of the partners are resident in Spain, it is required to authorize a resident in Spain to represent the company before the tax authority. All matters, such as establishing a company or opening a branch, can be carried out by granting power of attorney to a lawyer or authorized consultant in Spain. This power of attorney can be prepared and certified through a notary in Turkey and can be approved by the Spanish consulate in Turkey, or it can also be arranged directly through the Spanish consulate.

What Are the Advantages of Investing and Establishing a Company in Spain?

● Establishing a company in Spain is quite advantageous due to its potential customer base of 45 million.
● Spain hosts an average of 70 million tourists annually, making it a very busy country in terms of tourism, thus starting a company here is commonly preferred.
● It is a country frequently chosen by Turks due to its position as the fifth largest economy in Europe and a growing economy.
● Due to Spain's geographical location, having two different coastlines and highly developed sea transportation and logistics increases the rate of company establishment here.

What Types of Companies Exist in Spain?

Joint Stock Company: In a Joint Stock Company, the subscribed capital must be registered and at least 25% of the nominal value of shares must be paid. The board of directors acts with full authority, including the appointment and dismissal of directors. The executive board can consist of one or more directors, and it is not a requirement for the directors to be shareholders or citizens of Spain.

Steps to Establish a Joint Stock Company are summarized as follows:
● Choose a name that has not previously been registered in the Commercial Registry
● If a representative is to be used, carry out the power of attorney process
● The founders of the company sign a contract regarding the establishment
● Obtain a temporary Tax Identification number
● Open a bank account
● Obtain a document confirming that the initial capital has been deposited
● Determine the management team
● Create the Company’s Articles of Association
● Sign legal documents (share certificates) in the presence of a notary
● Submit an income tax declaration and pay inheritance tax
● Register the Joint Stock Company in the Commercial Registry
● Obtain a permanent Tax Identification number.
● Foreign investment must be notified to the Foreign Investment Registration Office under the Ministry of Industry, Tourism and Trade. Establishing a S.A. takes an average of 6-8 weeks. To legally commence activities, the company must also complete tax, social security institution, and municipal formalities.

European Company: The European Company is a type of business that allows firms operating in various EU countries to organize as a single entity and manage its administrative and financial systems from a single center. This type of company also offers the opportunity to reduce administrative costs for firms within the framework of EU legislation.

Limited Company: This type of company gives flexibility to the owner, as the conditions related to the internal management of the company can be determined by the owner. The minimum capital is fully paid at the time of establishment and the capital is divided into shares. As a general rule, shares are not transferable.

New Limited Company: This is a new type of limited company subject to simplified procedures established to encourage Small and Medium Enterprises. The company name starts with the names and surnames of one of the partners, followed by an alphanumeric code and the expression New Limited Company.

The 8 Sectors with the Most Investment in Spain

1. Textile Sector,
2. Automotive Sector,
3. Telecommunications Sector,
4. Biotechnology Sector.
5. Infrastructure Sector,
6. Renewable Energy Sector,
7. Shipbuilding Sector,
8. Chemical Industry Sector are among the sectors where investment can be made in Spain.