Barcelona company setup · Spanish SL · Employer of Record Spain · foreign startup Spain
How to Set Up a Company in Barcelona as a Foreign Startup
The practical guide -- SL formation, NIE, bank account, tax registration, payroll and what typically goes wrong.
Executive summary
- For 1-3 early hires validating the Barcelona market, an Employer of Record (EOR) is the fastest route -- operational in 1-2 weeks, no entity required.
- For a 3+ year commitment with 5+ people, a Spanish SL is almost always more cost-effective. Minimum capital EUR 3,000. Formation timeline 4-8 weeks. One-off legal cost EUR 3,000-6,000.
- NIE numbers for all foreign directors are the most common bottleneck -- start applications on day one and allow 4-8 weeks minimum via Spanish consulate.
- Monthly ongoing SL cost: EUR 400-1,100 for accountant, payroll provider and compliance. Corporate tax 25% (15% for first two profitable years).
- Employer social security runs approximately 30-32% on top of gross salary -- the single largest employment cost item to budget for in Spain.
SL vs branch vs EOR: which structure to choose
How it works: a third-party EOR employs your people on your behalf under Spanish law. You pay the EOR; the EOR pays the employee and handles all HR compliance.
Cost: typically EUR 300-600/employee/month on top of gross employment cost.
Limitations: less contract flexibility, harder to issue equity directly, EOR is the legal employer.
Formation cost: EUR 3,000-6,000 in legal, notary and registration fees.
Timeline: 4-8 weeks. Monthly ongoing: EUR 400-1,100.
Minimum capital: EUR 3,000 fully paid up at incorporation.
Step-by-step SL formation process
| Step | What it involves | Who handles it | Typical timeline |
|---|---|---|---|
| 1. NIE for all directors | Tax ID for each non-Spanish director | Each director via consulate or Spain | 2-4 weeks consulate, 4-8 weeks Spain |
| 2. Reserve company name | Check and reserve at Registro Mercantil Central | Lawyer or gestoria | 1-3 days |
| 3. Draft articles of association | Define purpose, capital, governance, shareholder rights | Spanish lawyer | 2-5 days |
| 4. Open provisional bank account | Deposit EUR 3,000 minimum capital | Director in person or remotely | 1-3 weeks |
| 5. Notary signing | Sign deed of incorporation before Spanish notary | Director or proxy with power of attorney | 1-2 days once scheduled |
| 6. Registro Mercantil | Official company registration | Lawyer or gestoria | 2-4 weeks |
| 7. Tax registration | Obtain CIF, register for IVA and IAE with Agencia Tributaria | Accountant or gestoria | 1-3 days |
| 8. Social Security registration | Register as employer with TGSS | Accountant or gestoria | 1-2 days |
| 9. Business bank account | Operational current account | Director | 1-3 weeks depending on bank |
Typical setup and ongoing costs
| Item | Typical range | Notes |
|---|---|---|
| Spanish lawyer (SL formation) | EUR 1,500-3,000 | One-off |
| Notary fees | EUR 300-600 | Depends on capital and provisions |
| Registro Mercantil registration | EUR 150-300 | Official fee |
| Share capital deposit | EUR 3,000 minimum | Becomes company working capital |
| Monthly accountant | EUR 300-800/month | Varies with transaction volume |
| Payroll processing (outsourced) | EUR 50-150/employee/month | External payroll provider |
| Annual statutory accounts | EUR 1,000-2,500/year | Often included in accountant package |
Spanish taxes at a glance
Corporate income tax (Impuesto sobre Sociedades): 25% standard. 15% for the first two profitable tax years for newly created companies. VAT (IVA): 21% standard rate on most B2B services, quarterly filing via Modelo 303. Employer social security: approximately 30-32% on top of gross salary -- the largest employment cost item. See the full breakdown in the hiring costs guide.
Common mistakes to avoid
FAQ
What is the minimum share capital to form a Spanish SL?
The standard minimum share capital for a Sociedad Limitada (SL) is EUR 3,000, which must be fully paid up at incorporation. A 2023 reform also allows an SL with EUR 1 minimum capital (Sociedad Limitada de Formacion Sucesiva) but this structure has restrictions until the standard minimum is reached. For most international startups, the standard EUR 3,000 SL is simpler and raises fewer questions with banks and enterprise clients.
How long does it take to set up a Spanish SL from scratch?
A realistic timeline is 4-8 weeks from decision to functional entity with a bank account and active payroll. Main steps: NIE for directors (1-3 weeks via consulate, 4-8 weeks in Spain), company name reservation and articles of association (1 week), notary signing and Registro Mercantil registration (2-3 weeks), tax registration with Agencia Tributaria, and business bank account opening (1-3 weeks depending on bank).
What is an NIE and who needs one?
An NIE (Numero de Identificacion de Extranjeros) is the tax identification number for non-Spanish nationals. Every foreign director of a Spanish SL must have one before the notary signing. Apply via Spanish consulate in your home country (typically faster) or in person at a Spanish Oficina de Extranjeros. Allow 2-4 weeks via consulate, 4-8 weeks in Spain. Start NIE applications first -- they are the most common bottleneck in Spanish company formation.
Should a foreign startup use an SL, a branch, or an Employer of Record in Spain?
For 1-3 early hires validating the market: Employer of Record (EOR) is fastest -- operational in 1-2 weeks, no entity formation required. Cost: typically EUR 300-600 per employee per month on top of employment costs. For 3+ year commitment with 5+ people: Spanish SL is almost always more cost-effective and gives full legal control. A branch office is rarely the right structure for early-stage startups -- more complex, no liability separation from parent.
How much does it cost monthly to run a Spanish SL?
Monthly ongoing costs for an active SL: accountant and compliance EUR 300-800/month (varies with transaction volume), payroll processing if outsourced EUR 50-150/employee/month, registered address service if no physical office EUR 50-150/month. Annual statutory accounts preparation adds EUR 1,000-2,500/year. Total monthly overhead for a small SL: approximately EUR 400-1,100 excluding salaries.
What corporate tax rate does a Spanish SL pay?
The standard corporate income tax (Impuesto sobre Sociedades) rate is 25%. Newly created companies pay 15% for their first two profitable tax years -- a meaningful saving for early-stage companies. Loss-making companies pay zero corporate tax but must still file. Always validate with a qualified Spanish accountant for your specific situation.
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Work with Adrien
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Adrien de Malherbe helps US and international startups with the legal, HR and operational setup for their Barcelona entity. Based in Barcelona.