Entrepreneurship in Spain: guide to doing business in Barcelona

Entrepreneurship in Spain is not an easy task. Before running a business in Spain, the owner should be ready to dedicate him- or herself fully to the business process and be prepared to handle the majority of the business issues on his or her own. This harsh reality is confirmed by huge companies that have become competitive solely because of the personal strength and good reputation of their owners. 

Myth # 1 – Instantaneous success

When planning or beginning to run a business in Spain, many business founders firmly believe in the concept of overnight success and their ability to manage the company indirectly through a deputy manager they have appointed. However, business practices in Spain demonstrate that the most successful new companies achieve stabilization processes only after three years of business activity. On average, it might take up to five years to make a business operate smoothly. When first doing business in Barcelona, one is likely to sacrifice many things, including good health, solid nerves, enjoyable hobbies, and large amounts of money.

Myth # 2 – ready business in Spain means successful business

The purchase of a pre-existing business in Spain will not guarantee you quick revenues. In fact, when buying an already existing project, you also inherit pre-existing problems and the extra costs related to the business’s promotion and development, unlike the situation when starting a new company.

Myth # 3 – rely on yourself

Many people wrongly believe that as soon as they start a business in Spain, everything will work as a well-tuned mechanism. This belief is especially misinformed when it comes to doing business in Barcelona. When running a business in Spain, most entrepreneurs find that they are left to deal with absolutely all issues on their own.

When embarking on an entrepreneurship in Spain

Below, you can find the order of actions required for starting a business. As common business practices in Spain prove, it is not recommended to change the order of these steps.

To begin doing business in Barcelona, you will need to possess the following:

• A clear idea of what exactly you will decide to implement;
• At least 150,000 euros in cash or non-cash at your own disposal;
• At least one person in your family or company with a residence permit (permiso de residencia);
• Sufficient fluency in Spanish to make business communications easily understandable;
• Premises for your office and business that meet your needs;
• A catchy name for your company;
• Registration for the company: you will have to register and duly prepare all the necessary documents with the assistance of a competent lawyer;
• A unique company style that would be attractive to the local population;
• A mad love for your job and consideration, first and foremost, for the quality of the product you manufacture or the services you provide, and only afterward for the income;
• Business ethics: when doing your job, never to lie to anyone, under any circumstances, including the offer of large quantities of money and other valuables in the territory of Spain;
• Actively maintained social connections in your professional field and a commitment to avoiding any kind of conflict or open competition;

If you follow these business practices in Spain, you will develop every possible chance for your own successful adaptation as an individual, as well as the adjustment of your business in the near future. Now, let us discuss these aspects in more detail.

The role of capital in entrepreneurship in Spain

Money is an important aspect of running a business in Spain. In Spain, the subsistence level for a physically healthy and fully functional family without children is about 2000 euros per month. In order to implement numerous business plans with this base amount only, at least one of the spouses will have to dedicate his or her energy and work full-time during the working week. This is because most of the above-mentioned sum of money will be spent, not on investments in the new business, but on the family’s housing and alimentary needs during the period of adaptation. When living in a foreign country, if you do not have at least this amount of money, you might face vast difficulties in even meeting potential clients for your business.

The financial problems of a new business may also scare off potential partners. It should be noted that when starting a business Spain, it is strongly recommended that you retain any property you possess in your country of origin rather than sell the family property with the purpose of doing business in Barcelona.

Residence permit issued for entrepreneurship in Spain

On the dawn of your entrepreneurship in Spain, you will need to have an in-house administrator to be the image of your company and bear all kinds of liabilities. This person must be a residence permit holder in Spain, type ‘C’ (“Cuenta Propia”).

It is really difficult to obtain this document on the first try, since the standard means of obtaining a residence permit for foreigners presupposes employment with a work contract, whether genuine or fictitious. In this case, a person will be issued a type ‘C’ residence—in other words, not “Cuenta Propia” but “Cuenta Ajena.” In turn, Cuenta Ajena will not allow you to become an administrator within your company. In the future, you will be able to change “Cuenta Ajena” to “Cuenta Propia,” but this will require special efforts.

It is a fact that one can become an administrator of a new company in Catalonia even without a residence permit. However, this is another vast topic that is better discussed with a lawyer in his or her office. In any case, throughout the first months of working in Spain, you will have to consult a legal specialist almost on a daily basis.

Attention! – When requesting a residence permit and when in possession of all the basic documents, the fees for the legal support of a lawyer or consultant cannot exceed 1000 euros. Exceptions are made for some complex situations.

Enjoying running a business in Spain

According to common Spanish business practices and cultural perceptions, all people in Spain enjoy what they do, whether they work as hired labor or run their own businesses. It is an important cultural note that Spaniards expect to enjoy what they do in all aspects of life. Entrepreneurship in Spain should therefore bring you joy and internal harmony; otherwise, you risk losing your clients, who are accustomed to loving their jobs and the world around them and perceiving similar feelings in others.

Language fluency when running a business in Spain

The success of your business in Spain also directly depends upon how quickly you are able to become fluent in Spanish and/or Catalan, especially when dining with your partners and clients. When one is doing business in Barcelona, it is a good idea to resort to a translator’s services only once in a while. Business practices in Spain show that it is extremely important to build confidence among a business owner and clients on a personal basis, without the mediation of third parties.

Charter capital

When doing business in Barcelona, one should know that in Catalonia it is possible to register a company as a closed, joint-stock company only with capital of at least 3100 euros. When a company’s registration is over, one can withdraw the money from the account. However, it would be wiser to leave it there: when the lawyers see the availability of at least this sum on the banking account, they will work harder. Opening a company will cost around 2000 euros in a one-time contribution. Later on, its law-abiding maintenance, provided there are no official revenues, will cost approximately 10 000 euros per year.

Taxes for business practices in Spain

In general, the taxes in Barcelona and Catalonia are higher than in other regions of Spain. The tax police are more loyal to those who are just starting entrepreneurship in Spain. In Catalonia, great importance is paid to expenditures and duly prepared expenditure documents. Therefore, it is best to include in your business expenditure documents all expenses related to your company and yourself, including lunches and dinners. This way, you will be able to demonstrate to the tax police that you spend your money in the same place where you make it. In other words, your expenses are linked to your source of income.

Your office in the right place

From the very beginning of doing business in Barcelona, buy or rent a good office. Barcelona is divided into specific business zones. For this reason, if you do not yet know or navigate the business environment of the city well, we recommend that you consult a specialist in this field. To this effect, the specialists of ‘INEEDSpain’ service center are always ready to help you with any issue related to business in Spain. Just contact us at the phone numbers indicated on the website. Renting an office in Barcelona with 100 square meters of space in a prestigious district will cost you about 12–25 euros per square meter, depending on the interior condition. You also should be prepared to pay a large deposit at the moment you sign a lease contract.

Style and entrepreneurship in Spain

Following business practices in Spain, we recommend that you pay attention to the style of your company and commission its development from an experienced designer. Without a doubt, this type of specialist will know how to make your image comprehensible and habitual for the local market. To this end, every small detail matters. One should thoroughly brainstorm all the documents, the development of the website, which should be available in several languages, and the interior of the business office.

According to our calculations, the development of such a company style for this kind of office might cost between 3000-7000 euros, depending on the complexity of the project and the client’s preferences.

Office arrangement

Repair works in Spain cost a great deal of money. Plus, one should not count on the repair team working rapidly. In addition, an appropriate table for holding meetings for six persons will cost from 2000 to 7000 euros, as imported furniture is expensive.

When establishing a new business in Spain, consider Glorias area in Barcelona. Here, one can find plenty of second-hand furniture at affordable prices. However, it is best not to be too stingy when organizing a director’s office – it should be set at a level to attract prospective clients.

Business practices in Spain when it comes to workers

The process of workers’ employment when running a business in Spain can be a real challenge to navigate. Before finding people to whom you will entrust work involving money, documents, and company issues, you will have to conduct a complicated selection process. Furthermore, a high salary will not play a decisive role in this endeavor.

As business practices in Spain show, it is important to be cautious with workers, since legal trials involving employers in Spain are quite frequent. In the 1990s, the Spanish government established a new set of priorities in the global ‘employer-worker’ system of relations. Now it is often employers’ perception that business owners are frequently in the wrong and that the outcome of many trials is pre-defined in favor of the workers. Very often, employers end up paying large compensations to the workers.

Here are a couple more recommendations regarding business in Spain:

• Avoid lies, fraud, and non-payments, or risk losing business as word quickly travels the whole city.
• It is a good idea to invite your partners for a mutual dinner, ask them about small things, and show your interest in them as people. You may talk about your successful business, but do not mention precise amounts of money or people’s full names.