As the fourth-largest economy in the European Union, Spain has a strong economy and a skilled workforce. Due to foreign investments and expansion, the nation is also considered a business-friendly country. The key sectors are IT, automation, and digital security, which create opportunities for tech companies. The government provides support and incentives for businesses and foreign investors investing in Spain.
Unlock growth opportunities in Spain with Cerity Global as your trusted partner. We offer end-to-end support for establishing your legal entity, navigating Spain’s often complex regulatory landscape with clarity and efficiency.
From company registration to ongoing back-office support, including HR, payroll, benefits, accounting, tax and compliance, Cerity Global simplifies the process so you can focus on growing your business.
Need to hire quickly before your entity is set up? We offer interim EOR services in Spain, enabling you to onboard talent fast. Once your entity is established, we ensure a smooth transition of your employees from the EOR structure to your own legal entity, without disrupting payroll or compliance.
Our experts stay ahead of regulatory changes to keep your operations aligned with Spain’s employment and tax laws, helping you scale confidently and compliantly.
Also known as a limited liability company, a Sociedad Limitada requires at least €3,000 in share capital, is flexible, and the most common setup for SMEs.
A Sociedad Anonima is known as a joint-stock company, requires €60,000 in share capital, with €15,000 paid up at incorporation, and is suited for larger businesses or those planning to raise capital.
Sucursal , also known as a branch, is an establishment that carries out the parent company’s business activities either completely or partially.
Each company must appoint directors, who may be either corporate bodies or individuals. A board must appoint a chairman and secretary.
S.A must appoint directors, who may be either individuals or corporate bodies. A board must appoint a chairman and secretary.
From incorporation, the company appoints a representative with delegated powers.
Banks do not allow full account setup before entity incorporation, but it’s part of the incorporation process itself and occurs at a specific stage. Here’s how it typically works.
In Spain, a preliminary bank account is required before incorporation to deposit share capital. The account becomes fully operational only after the entity is registered and has a CIF (tax ID).
Required documents include the company’s certificate of name reservation, directors’ identification, and the notarized articles of association.
Cerity Global supports companies in their global expansion plans and helps in legal entity setup, registration and ongoing support services. With us, you can quickly set up a legal entity, operate compliantly, and expand globally. The process typically takes a few days to a week, depending on the bank.
Employment in Spain is primarily governed by:
Additionally, Collective Bargaining Agreements (CBAs) also play a crucial role in setting out specific terms and conditions for different professions and sectors.
Some of the standard details mentioned in the written contract include:
The different types of employment relationships are:
Also known as permanent employment, these are the most common form of employment in Spain and have no set date. Indefinite employment provides job security and stability to the employees and can be both full-time and part-time.
Also known as temporary employment, these contracts have a stipulated end date and are commonly used for specific tasks or projects.
In Spain, a probationary period typically lasts up to 6 months for qualified employees and 2 months for others.
A notice period of 15 days is applicable.
An employee receives severance pay, also known as finiquito, if terminated due to economic, technical, organizational, or production-related reasons, or unfairly dismissed by a labor court.
Generally, the employer is required to pay 20 days’ salary per year of service, up to a maximum of 12 months. However, in cases of unfair dismissal, the employees receive 33 days’ salary per year of service, up to a maximum of 2 years’ salary.
Foreign nationals can live and work in Spain by securing a work and residence visa. With a valid job offer and employer sponsorship, individuals with the right skills or qualifications may be eligible for temporary or long-term work authorization.
Ideal for senior-level hires or technical roles.
Often used by multinational companies to bring in expats or foreign senior talent.
A standardized EU-wide permit for skilled non-EU workers.
For standard employment outside the HQPV or Blue Card route.
For companies moving staff from abroad to a Spanish office.
Great for remote workers employed outside of Spain.
Key Notes:
Annual leave in Spain is 22 days for full-time employees, and this leave is fully paid.
Maternity leave in Spain is for 16 weeks. 4 weeks can be taken before the birth of the child, and 6 weeks immediately after childbirth.
Paternity leave in Spain is for 16 weeks. 6 weeks immediately after childbirth and the remaining ten (10) weeks are flexible within the first year.
Employees in Spain get paid sick leave as per social security regulations, categorized based on the duration and cause of the illness or injury.
The following statutory national holidays are observed in Spain:
The payroll frequency is usually monthly, and employees are paid on the last working day.
In Spain, 13th and 14th-month salaries are common and typically paid in July and December.
Employees in Spain must pay Social Security taxes, which contribute to Social Security benefits.
The mandatory and statutory benefits in Spain are:
Companies must follow Spanish Generally Accepted Accounting Principle (GAAP) and International Financial Reporting Standards (IFRS).
Companies in Spain must file annual financial statements with the Mercantile Registry (Registro Mercantil).
Companies must undergo a statutory audit if they exceed two of the following three thresholds for two consecutive fiscal years:
A certified auditor performs audits and submits them with the annual accounts to the Mercantile Registry.
The standard corporate tax rate is 25%. Newly incorporated companies can benefit from a reduced rate of 15% during their first 2 profitable years.
The VAT rate in Spain is 21%.
Corporate tax returns are due by July 25 for companies with calendar year-ends (within 25 days after the six months following the financial year-end).
Tax authorities impose penalties ranging from 50% to 150% of the unpaid tax due.
Spain follows OECD Transfer Pricing Guidelines, regulated under Article 18 of the Spanish Corporate Income Tax Law.
Spain has implemented CbC reporting in line with OECD BEPS Action 13.
Transfer pricing documentation is mandatory for companies that exceed certain thresholds.
Master File
Local File
Deadline: To be prepared and made available by the end of the tax filing period but not submitted unless requested by the tax authorities.
Spain follows the EU General Data Protection Regulation (GDPR), requiring strict personal data protection and compliance.
Spain’s AML framework is governed by Law 10/2010 of April 28, on the prevention of money laundering and the financing of terrorism, as amended by Law 10/2020. The law aligns with EU Directives and includes:
Obligated entities: Financial institutions, accountants, notaries, real estate agents, legal professionals, and others must comply.
Key requirements:
Penalties: Authorities may impose fines and criminal charges.
Reasons you should setup legal entity in Spain:
Cerity Global ensures your business expansion in Spain is fast, compliant, and future-ready, so you can focus on growth while we manage the back-office tasks.
Economic figures are subject to change based on quarterly reports and market conditions.
Cerity Global combines deep local knowledge with proven expertise to make your Spain business establishment effortless and compliant. Whether you’re looking for legal entity setup and registration or ongoing support, we’re your trusted partner for sustainable global expansion in Spain.
Disclaimer – The information provided is for informational purposes only and does not constitute legal, business, or tax advice. Entity setup requirements, tax rates, and economic data are subject to change and may vary by location. Cerity Global disclaims any liability concerning the accuracy, completeness, or currency of this information.
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