Advertisement

Why you'll soon be able to set up a company in Spain with just €1 rather than €3,000

The Local Spain
The Local Spain - [email protected]
Why you'll soon be able to set up a company in Spain with just €1 rather than €3,000
(L-R) Syrian journalist Ayham al-Ghareeb, Spanish journalist Andrea Olea, Syrian journalist Okba Mohamed and Syrian journalist Muhammad Subat of Baynana bilingual media outlet work in their office in Madrid on April 9, 2021. - Muhammad, Ayham, Moussa and Okba honed their skills as journalists in Syria's civil war before moving to Madrid. Now they proudly present the first media outlet led by refugees in Spain: Baynana, a digital news magazine in Arabic and Spanish launched last week. (Photo by JAVIER SORIANO / AFP)

The Spanish government has approved a new draft law that will allow companies to start up with just €1 and for the process to be carried out quickly and entirely online.

Advertisement

Currently, you must have to have a minimum of €3,000 to form a Limited Company in Spain, but if passed, the new bill will require you to only have €1, allowing the process to be completed electronically in just 10 days.

By doing this, the law includes measures to diversify sources of financing and promote non-bank financing, on which the majority of companies depend.

The bill’s main objective is to remove obstacles in the creation of companies in Spain.

The draft bill also looks at expanding activities for which you won't need to obtain a license and promotes the use of electronic invoicing between companies and the self-employed, which will contribute to the digitisation of business activities.

Another aspect that the bill covers are ways to support financing for business growth, such as venture capital and crowdfunding platforms.

Advertisement

The Vice President and Minister of Economy and Digital Transformation, Nadia Calviño, has indicated that this is one of the "most important" structural reforms of the Recovery and Resilience Plan which Spain submitted to the EU, and is aimed at "improving the performance and productivity of companies, as well as job creation ".

Defaults are one of the main problems that threaten business solvency for many Spanish companies because invoices are often not paid by the maximum legal term of 60 days. This problem particularly affects the self-employed, who allow large companies to take much longer to pay invoices for fear of losing more work or damaging relationships in the future.

For this reason, they do not usually demand legal compensations such as recovery costs or indemnities, even though it puts pressure on their margins.

To combat the wide non-compliance with this maximum period between companies, the new bill also suggests an incentive system for meeting payment deadlines and implementing electronic invoicing.

Together with the Startups Law and digital nomad visa, which the government also recently proposed, it aims to promote entrepreneurship and tackle the problems faced by Spanish companies, which makes it difficult for them to grow, go international or restructure debt.

READ ALSO: Tax cuts and special visas: Spain’s new law to attract foreign startups and digital nomads

Spain ranks only number 30 out of 190 in the World Bank's 'Doing Business' report in terms of business climate, behind many other EU countries.  

The bill is expected to reach the Congress of Deputies at the end of this year and if passed, will come into force in 2022.

COMPARE: Could Spain become the best country in the EU for digital nomads?

More

Join the conversation in our comments section below. Share your own views and experience and if you have a question or suggestion for our journalists then email us at [email protected].
Please keep comments civil, constructive and on topic – and make sure to read our terms of use before getting involved.

Please log in to leave a comment.

See Also