Thinking of swapping your old work routine for a new venture in Spain? Starting a business here is not as complicated as the rumours about red tape suggest, but it does involve patience, paperwork and a little local know-how. In this guide we explain your options, from going solo as an autónomo to incorporating your own Spanish limited company.
We also asked lawyer Alex Radford of My Lawyer in Spain to share his insider advice. In the video below he explains exactly how foreigners can get started, what it costs, and when to make the jump from self-employed to limited company.
In this article
Step one: can you legally work in Spain?
Before you start designing logos or ordering business cards, you need to check you are actually allowed to work in Spain.
Alex explains:
"First of all, you've got to make sure that you're allowed to work in Spain, that you've got the appropriate visa, or you've got residency here in Spain and you're allowed to work."
EU citizens can move straight into self-employment or company setup.
Non-EU citizens, including Brits post-Brexit, need the right visa first. This could be a business visa through your local Spanish consulate, or another residency route that grants work rights.
For many people, the simplest way to start is to register as self-employed (autónomo).
As Alex puts it:
"Typically speaking, we'd say you'd start off as an autónomo, as someone who's self-employed. Obviously, you register with Social Security, and you pay Social Security once a month."
The basics are straightforward:
Register with the Spanish Tax Authority (Agencia Tributaria).
Register with Social Security.
Submit quarterly VAT (IVA) and income tax returns.
Alex also advises getting professional support:
"You will also basically require an accountant to submit your quarterly income returns and your quarterly IVA/VAT returns."
What autónomo social security actually costs (2026): Spain now charges autónomos based on your real net income, in tiers, rather than one flat rate. For 2026 monthly contributions ("cuotas") run from roughly €217 at the lowest income tier up to around €796 at the highest. If you're a new autónomo, you can claim a reduced flat rate of €80/month for your first 12 months (extendable to 24 months in some circumstances, such as certain municipalities or registering as a person with a disability), plus a small additional charge (0.9%) for the Mecanismo de Equidad Intergeneracional - so around €88.64/month in practice. Rates are reviewed annually, so check the current tiers before budgeting.
When to upgrade to a limited company (Sociedad Limitada)
The jump from freelancer to limited company is not about vanity, it is about scale.
According to Alex:
"Then as your business grows… typically once you get to around billing of or gross income of around €100,000, that's when we recommend that you would open and incorporate a Spanish company known as a Sociedad Limitada (SL)."
The SL is Spain’s most common limited company. It protects your personal assets if the business runs into financial trouble and is usually the next step for expanding businesses.
Setting up a limited company in Spain
Alex explains the process in detail:
"We would apply for company names on your behalf. Once you've got the company names, we would go along to the notary, you would let us know who the directors are, who the shareholders will be, what the registered office is, and what the objects of the company will be. The shareholders and directors would sign the incorporation of the company, and then that company gets registered at the company's house."
Key facts to know:
Timeframe: "That process can take anywhere between four and eight weeks."
Setup costs: "I'd say you're looking at anywhere between €1,800 and €2,800, depending on the complexity of the company."
Minimum share capital: since a 2022 law change (Ley Crea y Crece), the legal minimum is just €1 - you no longer have to find €3,000 upfront to incorporate. That said, if you set up with less than €3,000 you must put at least 20% of annual profit into a legal reserve each year, and shareholders remain personally liable for the gap between what you paid in and €3,000 if the company is wound up. Most lawyers still recommend starting with the traditional €3,000 if you can, to avoid this.
Ongoing obligations: "Remember, once you've incorporated the company, you also need an accountant to submit those quarterly returns for you and annual returns."
If you are unsure how the Spanish tax system works, take a look at our guide to Spanish taxes for more detail.
Benefits of running a business in Spain
Yes, there is bureaucracy. But there are plenty of upsides too. Spain has:
A large international market needing niche services.
A lower cost of living compared to many Western countries.
A climate that makes even paperwork days more bearable.
In short, it is a place where lifestyle and business can work hand in hand.
Buying an existing business
Some people prefer to skip the setup process and buy an existing business instead. This can save time, but it is not without risk.
Make sure you:
Check all licences and permits are valid.
Review the brand, contracts and accounts.
Confirm there are no hidden debts.
Once you are satisfied, you can register the change of ownership at your local town hall and prepare for tax registration.
Sole trader (empresario individual) or partnership (sociedad civil). These are quick and cheap to set up but make you personally liable for debts.
Non-profits (fundaciones and asociaciones). Great for social projects. A fundación needs a minimum "dotación" (founding endowment) of €30,000, though this can be lower if you submit a viability plan showing it's enough for your purposes.
The cultural side of business
Remember that business culture in Spain may not match what you are used to. Expect:
More flexible attitudes to deadlines.
Longer lunch breaks that shape the working day.
A highly social approach to networking.
The laid-back rhythm can feel unusual at first, but it is also part of the charm.
Nick Storey is the Operations Director at tumaklata.sbs, where he leads platform operations, product delivery, and commercial strategy.
Having lived and worked in Spain for 14 years, Nick began his career as an estate agent on the south coast of Granada and brings first-hand market experience to his work.
He joined Kyero in 2007 and has since played a central role in scaling the business, shaping its product direction, and strengthening how international buyers connect with agents across Spain, Portugal, France, and Italy
