If you don’t yet have a NIE number this is the first thing to obtain, an NIE number is a unique reference that will identify you when you are doing business and for any formal and legal procedure, from opening a bank account to purchasing property.

Before you start trading, you need to register with the tax authorities to let them know that you are trading.

If you decide to engage in business as a self-employed individual, you and the business are the same person in the eyes of the law. The invoices issued by the business will contain your NIE number and you will be personally responsible for the debts of the business.

Compliance obligations with the tax authorities are very similar whether you are self-employed or trade through a company.

Setting up a company in Spain can be a lengthy and costly process. Companies also have additional compliance obligations with company’s house and need to maintain full accounting records.

You and the company will be separate entities in the eyes of the law. However, it is important to realize that as the administrator of a company, you will bear many responsibilities that should not be underestimated.

If you are going to carry out business as a self-employed person, immediately after you register as trading with the tax office, you need to register with the Social Security office and start making monthly social security contributions.

These monthly contributions are usually around 300 euros, although there are reductions of up to 50% in certain circumstances.

If you are the administrator of a limited company and you also own more than 25% of the share capital, you are also obliged to make social security contributions.

These contributions entitle you and your family to have access to the Spanish National Health Service and any other social security related benefits.

Sales and purchase invoices should contain the full details of both the supplier and the client. These details should include the business name (whether a limited company or a sole trader) and the CIF or NIE number and full business address. The amount chargeable for goods and services as well as the relevant VAT and IRPF if applicable should be clearly stated.

Receipts are not suitable for the reclaiming of VAT therefore ask for proper invoices whenever possible.

Receipts are not suitable for the reclaiming of VAT therefore ask for proper invoices whenever possible.