In 2024, startups in Spain had a total value of approximately 3.1 billion euros. This sum is distributed among the more than 3,000 startups in the country. These are significant figures, and if you are considering creating your own startup, it is worth knowing them. What else should you know about this? We explain it here.
The Importance of Choosing the Right Legal Structure for a Startup
Choosing the right legal structure is one of the fundamental steps to ensure the success and sustainability of your startup. Most emerging startups opt for structures such as:
- Limited Liability Company (SL): Flexible and with low initial capital (€3,000), it is the preferred option for small or medium-sized startups.
- Public Limited Company (SA): More suitable for ambitious projects aiming to access financial markets, requiring a minimum capital of €60,000.
Impact of the Startup Law on the Emerging Business Ecosystem
The Startup Law has changed the landscape for startups in Spain by making their establishment and expansion easier. Since its enactment, more than 1,000 startups have obtained ENISA certification, representing around 36% of the national ecosystem. The benefits of this law, some of which we will discuss in the next section, encourage more entrepreneurs to start their business or formalize legally. However, the influence of this new legislation is not limited to Spain, as it has also attracted significant foreign investment and talent.
Specific Benefits of Establishing a Startup in Spain
Creating a startup in Spain offers tax, administrative, and financial advantages that, along with proper planning, help build a solid foundation for long-term growth and scalability.
Tax and Administrative Benefits
- Reduced tax rate of 15% for the first four years with a favorable tax base.
- Deferred tax payments without the need for additional guarantees.
- Online company registration in just a few hours.
- Special tax regime for qualified foreign professionals, with a fixed tax rate of 24% on income up to €600,000 per year.
ENISA Certification
- Access to exclusive benefits designed for innovative companies.
- Startups meeting technological innovation requirements benefit from streamlined processes.
Innovation and Scalability
- Development of proprietary technologies and disruptive business models.
- Scalability without proportional cost increases, considering entry barriers, market size, and product quality.
Funding Options
- Public programs (CDTI, ENISA).
- Business angels and venture capital.
- Crowdfunding, accelerators, and incubators.
Main Types of Corporate Structures for Startups
As mentioned earlier, in Spain, the most common options for startups are the limited liability company and the public limited company.
How to Choose the Most Suitable Structure for Your Startup
The ideal structure will depend on factors such as the number of partners, financial capacity, growth projections, and investment needs.
Limited Liability Company (SL)
- Ideal for small and medium-sized startups.
- Requires a minimum share capital of €3,000.
- Limited liability to the contributed capital.
- Relatively simple administrative process.
- Closed structure; makes it difficult for new partners to join without approval from existing ones.
Public Limited Company (SA)
- Requires a minimum share capital of €60,000, although only 25% needs to be paid at the time of incorporation.
- Easier to attract investors by issuing shares.
- Open structure with freedom to transfer shares.
- Requires greater administrative and accounting effort.
Use Cases: Specific Situations and Ideal Corporate Structures
- Technology startup with two co-founders: A limited liability company is ideal due to its low initial capital, personal asset protection, and closed structure for decision-making.
- Marketplace or e-commerce: A public limited company is the best option as it allows raising capital through share issuance and facilitates future funding rounds or an IPO.
Practical Guide to Creating a Corporate Entity for Startups in Spain
The process of setting up a company may seem complex, but with proper planning and advice, it should not pose major difficulties.
How to Create a Startup: Step-by-Step Manual
- Define Your Business Idea: Ensure your product or service addresses a specific market need. Conduct a market analysis to confirm the feasibility of your proposal.
- Create a Business Plan: This document is essential to structure your strategy, calculate costs, and attract investors. Include clear objectives, competitive analysis, and financial projections.
- Choose the Legal Structure: Study each legal structure and select the one that best suits your needs.
- Register Your Company: Reserve the name at the Central Mercantile Registry, draft the company bylaws, sign the deed before a notary, obtain your tax ID (NIF), and finally, register the company in the Mercantile Registry.
- Seek Funding: Explore options such as private investors, venture capital, grants, or entrepreneur-specific loans.
- Build a Strong Team: Surround yourself with people who have diverse skills and share your vision.
- Create a Minimum Viable Product (MVP): Launch a basic version of your product to gather user feedback and adjust before investing more resources.
- Comply with Legal and Tax Obligations: Obtain necessary licenses, register your team with Social Security, and comply with tax regulations.
Initial Legal Obligations
- Registration for the Economic Activities Tax (IAE).
- Registration with Social Security.
- Notification of workplace opening.
- Census declaration and tax obligations.
Data Protection and Regulatory Compliance in Startups
Complying with data protection regulations is now essential for startups. The Organic Law on Data Protection and Digital Rights Guarantee (LOPDGDD) and the General Data Protection Regulation (GDPR) set the standards for the proper handling of personal information. What should you do about this?
- Design clear privacy policies and establish a record of personal data processing activities.
- Ensure you obtain explicit user consent before collecting personal data.
- Implement technical and organizational measures to safeguard company information from unauthorized access, loss, or leaks.
- If your startup processes sensitive or large-scale data, appoint a Data Protection Officer (DPO) to oversee compliance.
- Facilitate the exercise of rights such as access, correction, deletion, objection, and data portability.
Practical Application: How to Take Advantage of Tax and Administrative Benefits
One of the biggest advantages of establishing a startup in Spain is access to tax and administrative incentives offered by the Startup Law. However, to truly benefit, you need to follow the correct procedures and meet the established requirements. One of the first steps is obtaining ENISA certification. This certification, requested electronically through the ENISA portal, requires an innovative, scalable business model with growth potential. The essential documents needed for the process include:
- Certificates proving tax and Social Security compliance.
- Detailed business plan and financial projections.
- Company incorporation deed.
- Responsible declaration from administrators.
- Additional information (such as patents or certifications) if applicable.
Strategies for Success in the Startup Formation Process
To make this post more comprehensive and truly useful, here are some strategies to follow during the startup formation process:
- Define a strong vision and clear objectives.
- Develop a realistic financial plan.
- Seek specialized advice.
- Build a multidisciplinary team.
- Be agile and adaptable.
- Focus on regulatory compliance from the beginning.
Conclusions
In summary, creating a startup in Spain is not necessarily difficult; it just requires planning and knowledge of the legal framework. Seek professional advice when needed to ease the process. Take advantage of the opportunities offered by the Startup Law and other support programs.
