Why is it so difficult to set up companies/businesses in Spain?


A fairly simple answer to that question is that Spain is Spain. Everything takes longer and involves more red tape than most other countries in the civilised world.

However, there is light at the end of the tunnel. The time scales are improving. Two years ago, it took six weeks to set up a new company from start to finish. (Which is quite amazing for a country trying to compete in the EU). The UK takes a day and costs £100 to set up a company. Spain now takes 2-3 weeks and costs 1800€ to set up a company.

When you look at what you need to set up a company in the UK it is simple, a passport and an address. In Spain, you need, NIE numbers (Spanish fiscal number), for all the Directors and Shareholders, name certificate, bank certificate, signature before a notary and of course, registration at the mercantile registry.

I recently set up a company and was told by the notary that they would deal with the signing and registration of the company in one day. I will be honest, and say that I have never found anything working that efficiently and quickly in Spain, but I am always willing to give new methods a try.

The name certificate and bank certificates had already been received and sent to the notary, all that was required was the signing, submission of the form for the exemption of the 1% stamp duty on the share capital and registration in the mercantile registry, why should it take more than one day? It finally took four days for us to receive the registered company documents.

The quickest time I have seen a company incorporated from start to finish is eight working days, and the time was split into the following:

  • Name application: three days
  • Bank certificate: one day
  • Notary: one day
  • Registry: three days

That was the quickest company incorporation, and it was based on the fact that the Shareholders and Directors of the company already had their NIE, and the Notary and Registry processed the company documents immediately. However sometimes there are setbacks along the way, e.g. should your first name application be rejected, it could easily add another three days to the process.

The system has definitely improved compared to five years ago, when it took anywhere up to six weeks to incorporate a Spanish company, so at least the process is going in the right direction, even if that is at a snail’s pace.

I have even heard it mentioned in the press that you should be able to incorporate an eponymous company in one day, or more likely it will be achieved one day.

Now you have your company set up, you want to trade, open your doors, employ a couple of staff and trade. It could not be that easy, could it, watch this space!!!

Spence Clarke specialises in the provision of Spanish tax, accounts, law and labour services, mainly to foreigners with interests in Spain. Our cross-border knowledge helps clients adapt to the Spanish system with the minimum of doubt and disruption. If you have any questions about this article or any other matter contact us, with no obligation, to see how we can help you.