Starting a business

Launch your business in Spain with tax confidence

From choosing the right legal structure to ongoing tax compliance: we support every step of setting up your business.

Initial steps and registrations Formation

01

Business registration

  • Select an appropriate legal structure (sole proprietorship, limited liability company or public limited company)
  • Register the business name with the Commercial Registry (Registro Mercantil)
02

Obtaining a Tax Identification Number (NIF)

Apply for a NIF for the business entity from the Tax Agency (Agencia Tributaria).

03

Social Security registration

  • Register the business as an employer
  • Register employees with Social Security and ensure they receive their social security numbers

Taxes and contributions Taxation

Corporate Income Tax 17–25%

General rate of 25%. Reduced-size companies (revenue between €1M and €10M) are taxed at 23%; microenterprises (revenue under €1M) apply a progressive scale from 17% to 20% depending on taxable income (2024 reform, Law 7/2024). Newly created companies still benefit from a reduced 15% rate for their first two profitable years. Annual tax returns filed using form 200, with payments due in three instalments.

VAT (IVA) 21%

Standard rate, with reduced rates of 10% and 4% for specific goods and services. Quarterly VAT returns filed using form 303.

Personal Income Tax (IRPF)

Sole proprietors and certain business partners must pay IRPF on business income. Businesses must withhold IRPF from employee salaries and certain professional services quarterly.

Social Security contributions

Employers contribute a percentage of each employee's salary. Self-employed individuals (autónomos) pay their own monthly contributions.

Local taxes

Business Activity Tax applies to businesses with revenue exceeding €1 million. Real Estate Tax is paid annually on business-owned property.

Additional obligations Compliance

Accounting and record-keeping

Accurate accounting records must be maintained in accordance with the Spanish General Accounting Plan. Certain businesses require an annual financial audit.

Annual reports and filings

Submit annual accounts to the Commercial Registry, alongside corporate tax returns, VAT returns and other periodic filings.

Employee obligations

Provide legal employment contracts, issue detailed payslips showing salary and deductions, and ensure health and safety compliance.

Recommendation: proper planning and professional advice can help ensure compliance and optimise your tax strategy from day one. Rates current as of 2026.

Setting up your business in Spain?

We help you choose the right structure and stay compliant from the very first day.

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