Establishing a business in Spain

This Chapter describes the basic aspects of the main structures for investing in Spain, as well as the key formalities that a foreign investor must fulfill in order to set up or start up each of them.

Setting up a business in Spain is simple. The type of business entities available are in keeping with those existing in other OECD countries and there is also a wide range of alternatives capable of meeting the needs of the different types of investors who wish to invest in or from Spain.

This Chapter also examines how to open a branch; the pursuit of the activity directly by an individual entrepreneur as a “limited liability entrepreneur”; the formation of a joint venture with one or more enterprises already established in Spain; the acquisition of real estate; the sale and purchase of businesses; investment in venture capital firms; and distribution, agency, commission and franchising agreements.

In addition, it should be noted that, ordinarily, there is also almost total liberalization of foreign investment and exchange control in Spain, in line with EU legislation, notwithstanding the extraordinary measure introduced by the final provision of Royal Decree Law 8/2020 March 17, 2020, on urgent extraordinary measures to deal with the economic and social impact of COVID-19 and supplemented by Royal Decree Law 11/2020 of March 31, 2020, adopting additional urgent measures in the social and economic field to deal with COVID-19, both of which were approved by the Spanish Government on the occasion of the global COVID-19 pandemic, consisting of the suspension of the regime for the liberalization of foreign investment in Spain.

In this vein, Royal Decree-Law 34/2020, of November 17, 2020, on urgent measures to support the solvency of businesses and support the energy sector, and in the tax field, has broadened the suspension regime to include investments from the European Union or European Free Trade Association countries and has amended certain components of the suspension of the deregulation regime for other direct foreign investments.