Registering a Business Entity in Spain

If the entrepreneur intends not only to set up and own the company but also to work in it, a corresponding residence and work permit for Spain will be required. If they are involved in the business only as a founding partner, with the work carried out by hired staff or by a partner holding a Spanish work permit, the applicant does not need to apply for a residence permit with the right to work. Requirements also differ between EU citizens and nationals of third countries. Just as any EU citizen can set up a company, any foreigner can open a branch of an already established company and register it in Spain.

The most common types of business entities for carrying out commercial activity are:
⁃ Sole-member limited company (Sociedad Limitada Unipersonal). Owned by a single member, who is liable for the company's debts with their personal assets; no employees are required. No initial capital investment is needed to set it up.
Taxes: personal income tax and VAT.
⁃ Limited liability company (Sociedad de Responsabilidad Limitada, SL) — a company where liability for debts is limited to the company's share capital rather than the members' personal assets. Minimum share capital: €3,000.
Taxes: corporate income tax and VAT.
⁃ Public limited company (Sociedad Anónima) — a larger company with a minimum share capital of €60,000. Taxes: corporate income tax and VAT.
If you don't want to set up a company, you can register as a self-employed professional (Autónomo).
If you are in Spain without legal status, you can regularize your situation through social arraigo by starting your own business.
If you are in Spain on a student visa, you can modify your status by becoming self-employed and obtaining a residence permit with the right to work.