Spain has one of the most attractive domestic markets in Europe, with 46 million potential consumers, on top of the 60 million tourists who visit this country every year. Indeed, Spain is the world’s 13th largest economy in terms of GDP and 5th largest in the European Union.
Moreover, it must be highlighted that, in terms of purchasing power, Spain’s per capita income is significantly higher than that of some other major economies ranked above Spain. In other words, in terms of purchasing power, the Spanish market is larger than many of the more consolidated and dynamic emerging economies.
Solvency, competitiveness and growth potential. These are just some of the reasons to invest in Spain highlighted by financial advisory firms. We must add to these qualities a geographical position which gives potential access to more than 1.3 billion consumers in Europe, North Africa, the Middle East and Latin America.
|Form of government:||Unitary parliamentary constitutional monarchy|
|Official & spoken languages:||Spanish (spoken Aragonese, Astur, Leonese, Basque, Catalan, Calician, Occitan)|
|Time zone:||CET (UTC +1), Canary Islands +0)|
|GDP (PPP):||$ 1,636 trillion (16th)|
|GDP (PPP)/per capita:||$ 35,269 (29th)|
|Public debt:||1,085,488,500,000 € (94% of GDP)|
|Major trading partners:||France, Germany, Portugal, UK, Italy, Marocco, Algeria|
|Overall rank 2016:||rank 33rd (+1 since 2015)|
|– Starting a business:||rank 82 (average processing time 14 days)|
|– Dealing with construction permits:||rank 101 (average processing time 205 days)|
|– Getting electricity:||rank 74 (average installation time 107 days)|
|– Registering property:||rank 49 (average processing time 12.5 days)|
|– Getting credit:||rank 59|
|– Protecting minority investors:||rank 29|
|– Paying taxes:||rank 60 (average company tax from profits 50%, average time used for taxation 158 hours per year)|
|– Trading across borders||rank 1|
|– Enforcing contract:||rank 39 (average 510 days, average cost from standing amount 18.5%)|
|– Resolving Insolvency:||rank 25 (Average time processing bankruptcy: 1.5 years)|
New businesses registered in 2015: 91,544 new limited liability companies
Who can start a new business in Spain:
Who can own property or shares of Spanish company:
Who can act as a director or member of the board:
Business entities in Spain
Opening a bank account for Spanish company:
Public register of shareholders, directors or signatories:
Accounting and reporting regulations in Spain:
How funds can be withdrawn from company
Can you transfer Spanish company to another jurisdiction?
How to terminate business in Spain?
|Overall rank 2016:||45th (62/100 points)|
|– Property rights:||70/100 points|
|– Freedom from taxes:||54/100 points|
|– Freedom of speech/religion:||94/100 points|
|– Limited government:||39/100 points|
|– Gun rights:||26/100 points|
|– Drug rights:||60/100 points|
|– Freedom from corruption:||59/100 points|
|– Freedom from inflation:||80/100 points|
|– Business freedom:||77/100 points|
A company is resident in Spain if it is incorporated under Spanish law, has its registered office in Spain or its effective management is in Spain.
Resident companies are subject to corporation tax on worldwide income. Nonresident companies are taxed only on Spanish-source income, subject to the provisions of applicable tax treaty. Branches generally are taxed in a manner similar to subsidiaries.
|Taxable income:||25% (reduced from 28% as from 1 Jan 2016)|
|Taxation of dividends:||5%/10%/19%|
|VAT registration:||Registration is mandatory for all taxpayers that carry out transactions in Spanish VAT territory|
|– VAT Rates:||21%, reduced rates of 10% and 4%|
|Withholding tax (general):||24% (19% if EU or EEA recipient)|
|– From Dividends||19% if paid to nonresident (unless a lower rate applies under a tax treaty)|
|– From Royalties||24% or 19% if recipient is resident in EU or EEA (unless a lower rate applies under a tax treaty)|
|– From Interests||19% if paid to nonresident (unless a lower rate applies under a tax treaty)|
|– Technical services||24% or 19% if recipient is resident in EU or EEA (unless a lower rate applies under a tax treaty)|
|Transfer tax:||Companies pay a 7% transfer tax (which may be increased or decreased, depending on the region) and on Spanish real estate where VAT does not apply, including indirect acquisitions in certain cases.|
|Capital gains tax:||Treated as ordinary business income taxable by rate 25% (Exemption available)|
|Real property tax:||up to 1.3%|
|Social security:||“General risk” contributions represent 28.3% of an employee’s wages, with the employer paying 23.6% and the employee paying 6.35%|
|Payroll tax:||The employer must withhold tax on income from employment|
|Stamp duty:||0.5% of the value of the subject of notarized documents registered in public register (increased rates range between 0.75% to 2.5%)|
|Capital duty:||1% applies on the reduction od capital and upon liquidation of a company|
|Tax treaties:||Spain has concluded 91 tax treaties|
|CFC (Controlled Foreign Company) rule:||Yes|
|Other:||Business activities tax is charged, at a rate depending on a number of factors, including industry type, number of employees and size of premises.|
Compliance for corporations:
Tax authorities: Agencia Estatal de la Administracion Tributaria
An individual is resident if he/she spends more than 183 day of the tax year in Spain or if the main center of the his/her business, professional activities or economic interest is in Spain.
Taxable income of individuals includes earned income (e.g. salaries, wages and business or professional income) and passive income (e.g. dividends, interests and capital gains).
Income tax rates for individuals resident is Spain:
Social security payments in Spain:
Inheritance/estate tax in Spain:
Net wealth/net worth tax in Spain:
Compliance for individuals in Spain:
For corporations operating in Spain
For individuals and families interested in Spain
For individuals and families who hold the Spain residency
In cases KYC or/and Due Diligence process required Novasigma requires a personal meeting with all its new clients before proceeding any assignment
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