As more and more foreigners choose to relocate Spain, the demand for diverse products and services continues to grow, creating a  huge market for entrepreneurs who want to start their own business in Spain. There are however several fundamental issues that must be addressed in order to ensure all goes to plan.

As an EU citizen you have the right to start a business in Spain, although it would be prudent to remember the market here is very different to that of the UK.

The first step is to visit the local police station and apply for an N.I.E. number. This is an identification number for foreigners and is primarily for tax purposes. You will need to take along your passport and complete a simple form.

This service is offered by many solicitors for a small charge. Depending on the area where you live, the process can be as short as one day and as long as 9 months.

In Spain you must register your business at both local and national level.

• You need to register your business with the town hall and obtain an opening licence (Licencia de Apertura) which clearly defines your business and the way in which it will trade.
• You will need to register with the IVA office : The Agencia Tributaria which is the equivalent of the Inland Revenue office.
   

If you are not fluent in Spanish contact a Gestoria who will complete all the forms and file the necessary papers for a reasonable fee.

The next step is to decide what structure your company will take which is similar to in the UK with PLC and Ltd companies. Again the Gestoria will provide expert advice.

Empresa Individual or sole trader one name only.

Sociedad Civil or a partnership where several individuals form a business.

Sociedad Limitada or a limited company with registered shareholders and a set minimum trading capital in the bank.

Sociedad Anonima is a larger company with a large minimum trading capital and shareholders.

All businesses are registered with the Social Security Office and as such are liable for social security payments, these vary according to the status of the business. This provides you with the benefits of the local health service and contributes towards your Spanish pension. (minimum 15 years contribution)

If you are buying an existing business it is very important that you scrutinise every detail of the business to ensure the company has no debts or tax liabilities that would be transferred with the business and on to you. Naturally do not part with any money until this is completed to your satisfaction.

Finally you will however find many business practices here very different to those in the UK and it is often impossible or unrealistic to change them.

There is however, plenty of opportunity.