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Startup in Spain

Startup in Spain

Updated on Tuesday 22nd September 2020

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Startup-in-Spain.jpgSeveral European states have created a competitive environment for the development of the startup industry and Spain is one of such countries. Its main startup centers are Madrid and Barcelona, two major cities that are known as being among the best cities for developing an economic activity in this country. 
 
Businessmen who want to open a Spanish business as a startup company can benefit from the advantages offered by this market and in the case of those who need legal advice on the steps for registering a business or on the legislation regulating the field, our team of lawyers in Spain can provide legal representation or information on any question related to this industry. 
 

What is the law applicable to a startup in Spain? 

 
One of the main rules of law applied to a startup in Spain is the commercial legislation, as a startup simply defines a commercial entity, incorporated under one of the business forms available here, that is set up for the purpose of selling a product or a service, the difference from another type of company being that the Spanish startup has a technological component which can vary from a company to another. 
 
Another characteristic of a startup in Spain is that the business must always address to the local or the international markets with an innovative idea, this being a central point of any startup business. Under a legislative proposal of the Spanish government – the Law for the Promotion of the Startup Ecosystem, the Spanish startup is seen as having the following characteristics: entities funded by entrepreneurs that are technology-based, which have an innovative component and which have the capacity of rapid growth. 
 
Some of the basic rules of law that are currently applied to Spanish startups are the following: the Law 11/2013 of July 26, which establishes measures through which investors can be supported in this country, the Law 14/203 of September 27, which provides other regulations concerning entrepreneurs and the Law 5/2015 of April 27, which prescribes the legal framework with regards to the manner in which crowdfunding activities can be carried out here. Our team of Spanish lawyers can present extensive information on these rules of law. 
 
Crowdfunding is a modern means for raising capital, that is usually employed by businesses that have a technology-based business model. The idea promoted by crowdfunding platforms is that the general public or small investors can invest a small sum of money in a business that needs to raise capital, as opposed to obtaining the capital from conventional methods, such as bank credits. 
 

What are the investment trends in the startup industry in Spain? 

 
The level of investments in the startup industry in Spain is one that could determine the country in becoming a startup nation. Besides the investments and the large number of companies one can find in Barcelona and Madrid, the country is characterized by relevant investment projects in other major cities in Spain, some of the key aspects of the industry being the following:
 
  • in 2018, Madrid accounted for 1.235 startup companies, while Barcelona had 1.197;
  • 2 growing startup capitals were, in 2018, Valencia (accounting for 261 companies) and Bilbao (accounting for 60 companies).
  • in 2018, the top industries in which startup businesses preferred to invest were the following - home industry (34% of the companies), health and wellness (29%), transportation (23%), travel (21%) and enterprise software (14%);
  • the business models preferred by a startup in Spain were marketplace (62% of the businesses), ecommerce (43%) and mobile applications (42%);
  • Spain has a growth rate of 15.1% on a year-to-year basis with regards to the increase of the number of professionals in the field, being the 2nd highest most important market in Europe. 
 

How to open a startup in Spain 

 
According to the information presented by the Ministry of Industry, Commerce and Tourism, the registration of a startup in Spain begins following the same steps that are prescribed by the national law for other business activities. Our team of lawyers in Spain can present the entire procedure if you want to invest in this country. In most of the cases, the startup in Spain will be registered as a limited liability company or as corporation, although other business forms are available as well, but they are not as recommended due to their characteristics. 
 
The investors will have to prepare the minimum share capital and the capital for other costs, find a suitable office where they can have their registered address, register for taxes, apply for business permits and other important steps. The overall procedure can be presented by our law firm in Spain and we invite you to address to our Spanish lawyers for advice on any inquiry you may have.