Starting a business in a foreign land can be an arduous task. However, understanding what it takes can be what stands between you and success. If you’re considering opening a business in Madrid, Spain, you’re probably grappling with the idea of creating a limited company or starting as self-employed, also known as “autónomo.”
In the past, many people started with the latter before evolving to create a limited company also referred to as “Sociedad Limitada” (SL). This was due to the high cost involved in starting an SL, and the accounting expenses associated with SL companies.
Once you have decided what kind of business model are you going to use to start your own business, it is important that you find a place to live while your company starts and keeps growing. For those looking for housing for rent in Madrid, there is a large number of properties located in trendy neighborhoods.
Who can Set up a Business in Madrid?
While starting a company in Madrid doesn’t have to be a daunting process, the journey can be long-winded and overly supervisory. EU citizens starting their businesses either as partnerships or sole traders can navigate the requirements fast. However, this won’t be the same for you if you’re an expat, especially those that come from outside the EU.
They will need a work permit to relocate to Spain and start-up their businesses. With the various company structures available, launching a limited company can be an expensive and time-consuming affair. Often, this is attributed to the fact that the Spanish government applies minimum financial regulations. These are affected by people in search of incorporating their companies in Madrid.
Business Practices in Madrid
The business culture in Madrid, Spain, is quite different from many other countries. For instance, there is a more laid back approach between service providers. As a result, expect to see meetings prolonging until late in the evening.
Deadlines too may overrun until the evening. Still, the idea that Spain has one of the old fashioned business cultures is not exhaustively accurate. This, for instance, was a common practice in the past. However, these have since withered down.
However, late lunches are still a common practice in various companies. Further, some organizations are abandoning outdated decision-making practices. The Spanish government is discussing the possibility of having a 14% gender pay gap.
It will take some time before business practices are well aligned in Spain. According to the World Bank Ease of Doing Business Survey conducted in 2018, Spain ranked number 28 out of 190 countries. This was an indication that doing business in Spain is easier.
What’s the Cheapest way of Setting up Business in Madrid?
This would be through launching an unincorporated company. You can achieve this as a sole trader or while under the partnership. These arrangements don’t involve minimum investment requirements. What’s more, you won’t have to go through the numerous formalities needed when establishing a limited company.
As an entrepreneur, you’ll be tasked with submitting your personal tax return. There will be no legal difference between your personal assets and business assets. What this means is that should your business incur debt, you will be personally responsible.
Starting a business in Madrid Spain can be an arduous task especially for non-EU residents. To succeed in doing business in the city, you want to keep in mind the tips mentioned herein.