Spain: Where global ambition meets local opportunity.
Spain offers a strategic business environment with access to European, Latin American, and North African markets. Its robust infrastructure, stable regulatory framework, and growing innovation ecosystem make it attractive to foreign investors across diverse sectors. Spain also offers competitive operating costs, and its excellent quality of life attracts global talent, continually increasing its skilled workforce.
This guide will walk you through the company registration process in Spain, the associated costs, and why using an Employer of Record (EOR) can be a faster, lower-risk alternative to hiring without establishing a legal entity.
The business benefits of registering your company in Spain
Spain offers a compelling blend of European stability and strategic access points, making it an attractive destination for businesses seeking growth in multiple markets.
- Direct access to the EU single market of 448 million consumers, and growing
- EU membership with access to numerous international trade agreements
- Strong IP protections and a well-established legal framework
- Lower business costs than many Western European countries
- Modern infrastructure, including high-speed rail, ports, and digital networks
- Spain’s language and culture support Latin American market outreach.
- High quality of life that attracts international talent
Spain also offers government incentives for business growth, including tax deductions of up to 42% for qualifying R&D expenses and CDTI (Centre for Industrial Technological Development) soft loans and grants.
Companies also get incentives to hire here. You can avail grants or reductions in social security contributions for hiring unemployed individuals, young workers, or people with disabilities, and support for training programs that promote stable employment.
If you want to leverage these advantages and expand into Spain, consider two options: traditional company registration and Employer of Record (EOR).
What is the difference between standard company registration and expanding through an EOR?
When setting up a business in Spain, you can either register your entity or partner with an EOR. Each option has unique strengths and fits different needs. Here’s a breakdown:
Aspect | Standard Registration | Employer of Record (EOR) |
Purpose | Establishes a legal entity with full operational control. | Enables local hiring without creating a company. The EOR manages HR and payroll. |
Control | Full control over finances, operations, and employee management. | Day-to-day management is yours; the EOR handles compliance and admin tasks. |
Compliance | You’re responsible for labor laws, taxes, and regulatory filings. | The EOR ensures full compliance with Spanish labor and tax laws. |
Setup Time | Typically 4–8 weeks with documentation, approvals, and notarial procedures. | Launch operations in a matter of days. |
Cost | Incorporation, notary fees, ongoing legal and tax support. | One monthly fee with no entity setup costs. |
Scalability | Better suited for businesses investing in long-term growth in Spain. | Enables flexible hiring and market testing without a long-term commitment. |
Traditional registration suits businesses ready to invest in long-term infrastructure but requires setting up a local entity in Spain. An EOR offers a faster and simpler route—perfect for agile hiring and early market entry.
How EOR simplifies Spain company registration
Setting up a legal entity in Spain can be complex and time-consuming. That’s where an Employer of Record (EOR) steps in.
An EOR helps you start operations quickly by allowing you to hire local talent, manage compliance, and handle payroll without the need to set up a legal entity.
Here’s how an EOR makes it easy:
- Begin operations immediately—no need to navigate registration procedures
- Focus on growth while the EOR manages local paperwork and compliance.
- Ensure compliance with Spanish labor laws, taxes, and reporting requirements.
- Hire flexibly without long-term entity commitments.
- Access Spain’s skilled workforce without managing local employment processes
- Offer competitive, locally compliant benefits—handled by the EOR.
- Reduce risk as the EOR assumes legal and administrative responsibilities
An EOR removes the need to manage complex legal and regulatory processes. It’s the fastest way to start hiring in Spain while staying focused on your broader business goals.
However, If your company needs to issue local invoices for selling products or services in Spain, you would need a local legal entity for tax, regulatory, and commercial purposes. Similarly, if you operate in certain sectors—like financial services, healthcare, education, and energy— you will require local licensing, which requires you to register your company in Spain.
A step-by-step guide to registering a company in Spain
Understanding Spain’s company registration process can help reduce delays and avoid non-compliance.
Here’s how it works:
Step 1: Choose a business structure
- Sociedad Limitada (SL): Private Limited Company, most common for SMEs
- Sociedad Anónima (SA): Public Limited Company, for large-scale businesses
- Branch Office: Operates under the parent company
- Representative Office: Non-commercial, limited to liaison activities
Step 2: Obtain an NIE (Foreigner Identification Number)
All non-Spanish shareholders and directors must have an NIE, issued by the Spanish police or consulate.
Step 3: Register the company name
Check the name availability and reserve it with the Central Mercantile Registry (Registro Mercantil Central).
Step 4: Open a corporate bank account
Deposit the required share capital:
- SL: Minimum €3,000
- SA: Minimum €60,000
Step 5: Draft and notarize company documents
Prepare and notarize:
- Articles of Association
- Deed of incorporation
- Identity documents of shareholders and directors
Step 6: Obtain a tax identification number (NIF)
Apply with the Spanish Tax Agency (Agencia Tributaria) to get your tax identification number (NIF)
Step 7: Register with the Commercial Registry
Submit documents to the local Mercantile Registry (Registro Mercantil) for company incorporation.
Step 8: Register for social security and other licenses
If hiring, register with the Social Security Authority (TGSS). Depending on your sector, you may need special licenses.
While the steps for company registration are clear, dealing with multiple agencies and documentation can slow down your market entry. Many companies choose an EOR to bypass these steps and start hiring in Spain immediately. EOR platforms like Multiplier help you focus on growth while managing compliance, payroll, and local hiring on your behalf. It can also help you reduce costs drastically.
The real cost of registering a business in Spain
When you understand the financial aspects of company registration in Spain, it’s easier to plan your expansion budget.
Here’s a breakdown of costs:
1. Registration costs
- Company name registration: €16
- Notary and deed preparation: €300–€1,000
- Company incorporation: €250–€500 (plus registry fees)
2. Share capital
- SL: Minimum share capital of €1 (reduced from €3,000 under recent reforms). Additional creditor safeguards apply if capital is under €3,000.
- SA: Minimum €60,000 (25% paid upfront)
3. Legal and accounting services
- Lawyer/accountant fees: €1,000–€3,000 annually
- Tax filings and audit support add to ongoing compliance costs
4. Maintenance and payroll
- Annual company tax: 25%
- Social security contributions: ~30% of gross salary (employer side)
- Payroll administration tools: Additional €100–€500/month
By contrast, an EOR consolidates these costs into one monthly fee. With no upfront capital requirements or incorporation expenses, EORs like Multiplier reduce overhead and simplify your entry into the Spanish market.
Cost comparison: Standard registration vs. EOR
Understanding the financial implications of traditional company registration versus partnering with an employer of record (EOR) can help you make an informed decision.
Here’s a side-by-side comparison for Spain:
Category | Standard Registration | Employer of Record (EOR) |
Setup time | 4–8 weeks | A few days |
Initial setup cost | €2,000–€5,000 | None |
Share capital | €1–€60,000 | Not required |
Legal & accounting fees | €1,000–€3,000/year | Included in monthly fee |
Payroll & HR tools | €100–€500/month | Included |
Tax & compliance burden | Managed in-house | Handled by EOR |
Flexibility | Less flexible, suitable for long-term presence | Ideal for testing or small-scale hiring |
Traditional registration involves higher upfront investment and ongoing administrative responsibilities. It’s best for companies planning a long-term or large-scale presence in Spain.
Robust EOR solutions like Multiplier offer a faster, lower-risk alternative. Its predictable monthly fee covers compliance, payroll, and hiring support, making it ideal for companies seeking agility and speed in market entry.
Take the stress out of your Spain expansion with Multiplier
With Multiplier’s employer of record (EOR) solution, you can hire Spanish talent, quickly and compliantly without establishing a local entity. We support you every step of the way, and ensure you have fewer administrative headaches of legal worries.
Here’s what we offer:
✔️ Local hiring expertise
We tailor employment contracts compliant with Spanish labor laws and streamline onboarding, so you can build your team without delays.
✔️ Effortless payroll management
Navigate Spain’s payroll complexities with ease. Multiplier ensures accurate calculations, timely payments, and management of social security contributions and tax withholdings.
✔️ Comprehensive HR platform
Manage all employee matters in one centralized system—from contracts and leave management to expense tracking and performance reviews.
✔️ Full compliance, zero hassle
Stay protected. Our experts thoroughly understand Spanish employment regulations, collective bargaining agreements, and mandatory reporting requirements.
✔️ Tailored benefits packages
We help you attract and retain top Spanish talent with competitive, locally optimized benefits—including private healthcare, meal vouchers, and transportation allowances.
✔️ Reliable support and security
Get expert assistance from our Spain specialists whenever you need it with the assurance of enterprise-level data security and privacy compliance.
Expanding into Spain offers exciting opportunities, but setting up a legal entity can be time-consuming and complex. Book a demo today to see how Multiplier can make this expansion efficient, effortless, and more effective.
