Spain, officially the Kingdom of Spain (Spanish: Reino de España ), is a sovereign state that dominates the Iberian Peninsula. It is the second largest country in Western Europe, and it borders Portugal on the west, France and Andorra to the northeast, the Mediterranean Sea to the east and south, the Atlantic Ocean to the west and the Bay of Biscay to the north.
Spain’s economy is the ninth largest worldwide and the fifth largest in Europe according to the World Bank. Furthermore, it is the eighth largest industrialised economy in the OECD (Organisation for Economic Co-operation and Development).
Spain is a member of the European Union (EU), the World Trade Organization (WTO) and other international bodies such as OECD, G20, OSCE, and Council of Europe. From 2015-16, it is also a non-permanent member of the UNSC.
Spain is a perfect location for any organization wishing to develop business in Western Europe. The country offers many developing benefits for new businesses including low labour and transport costs.
The Spanish limited liability company (Sociedad Limitada or SL) is definitely the most popular corporate form in Spain. A minimum share capital of around EUR 3,000 must be deposited when opening a company in Spain. Contributions can be made in a wide category of assets, such as cash, credit rights, real estate property etc.
A Spain Limited Liability Company (LLC) has the following benefits:
- 100% Foreign Shareholders: Foreigners can own 100% of the shares in an LLC in Spain.
- Limited Liability: The shareholders of the Spanish SLare liable for the company’s debts only to the extent of their contribution to the company’s capital.
- One Shareholder: The minimum number of shareholders is one
- Audits: An annual audit is not usually required
- One Administrator: A minimum of one administrator is required to form a LLC which can be the sole shareholder.
- Low Minimum Share Capital: The required minimum share capital is 3,000 Euro.
- EU Membership: As a member of the European Union (EU), Spain offers opportunities to engage with other EU members.
VAT tax in Spain. In 2012, VAT tax in Spain was raised to 21%, with reduced rates of 4% and 10%. The 10% rate applies to certain goods such as services, the purchase newly built properties, hotels and restaurants, health products, and entertainment and sports activities. The 4% rate applies to goods considered as basic necessities, like certain foods and reading materials (newspapers, magazines, books). In addition, there are some professional activities exempt from VAT, a few examples are financial and insurance institutions and agent commissions, as well as doctor and dentist fees.
Spain offers numerous incentive schemes, many of them funded by the EU. These include regional incentives for investment in less developed areas of the country, measures that have been taken in order to encourage investment in specific sectors and tax breaks aimed at reducing unemployment among young people.
With an annual growth, above 3%, Spain has been outperforming the EU average for a number of years. A sustainable economy, a broad market with intense internal demand and with great potential for growth makes it possible for every entrepreneur to start a business in Spain.