What Legal Status for Your Business in Spain?

Published on September 30, 2025 and written by Cyril Jarnias

Spain offers an attractive environment for entrepreneurs looking to establish their business there. However, choosing the appropriate legal structure is a crucial decision that will significantly impact your operations. In this article, we will explore the main available options and guide you in selecting the most suitable legal structure for your entrepreneurial project in Spain.

Spanish legal structures: a range of possibilities

Spain offers several legal forms for businesses, each with its own characteristics, advantages, and disadvantages. Here are the main structures to consider:

1. Empresario Individual (Sole Proprietor)

This structure, equivalent to the French auto-entrepreneur status, is ideal for individuals wishing to conduct professional activities under their own name. It offers great administrative and tax simplicity but involves unlimited liability for personal assets.

2. Sociedad Limitada (SL) – Limited Liability Company

The SL is the most popular legal form in Spain. It offers limited liability for partners and requires a minimum share capital of 3,000 euros. This structure is particularly suitable for small and medium-sized businesses.

3. Sociedad Anónima (SA) – Public Limited Company

The SA is typically chosen for large companies or projects requiring significant investments. It requires a minimum share capital of 60,000 euros and offers greater flexibility for raising funds.

4. Sociedad Civil (SC) – Civil Partnership

This legal form is often used by freelance professionals or artists. It allows for a simple association between several people but does not offer protection for personal assets.

5. Cooperativa – Cooperative

Cooperatives are democratic structures where each member has an equal vote. They are particularly suitable for collaborative and social projects.

Sole proprietorship or corporation: the entrepreneur’s dilemma

The choice between a sole proprietorship and a corporation depends on several factors. Here are some elements to consider:

• Ease of creation and management
• Reduced formation costs
• Flexibility in decision-making
• Simplified tax regime (personal income tax)

• Unlimited liability for personal assets
• Difficulty raising funds
• Less professional image for certain clients or partners

• Limited liability for partners
• Better credibility with business partners
• Ability to involve multiple people in the project
• Possible tax optimization

• More complex and costly formation procedures
• Greater accounting and tax obligations
• Less flexibility in decision-making (depending on the chosen form)

Key factors for choosing your legal structure in Spain

To determine the most appropriate legal structure for your business in Spain, consider the following elements:

1. Nature of the activity Certain activities may require a specific legal structure. For example, freelance professionals may opt for a Sociedad Civil or an SLP (Sociedad Limitada Profesional).

2. Size and ambitions of the company An ambitious startup might prefer an SL to facilitate investor entry, while a large company will typically opt for an SA.

3. Number of partners If you are alone, a sole proprietorship or SLNE (Sociedad Limitada Nueva Empresa) may be suitable. For multiple partners, an SL or SA will be more appropriate.

4. Available capital The minimum required capital varies according to the chosen legal form. Ensure you have the necessary funds for the envisioned structure.

5. Desired liability If you want to protect your personal assets, opt for a limited liability structure like the SL or SA.

6. Tax regime Sole proprietorships are subject to IRPF (Personal Income Tax), while corporations are subject to Corporate Tax. Evaluate which option is most tax-advantageous for your situation.

Conclusion: a crucial choice for your business’s future

Choosing your business’s legal structure in Spain is a strategic decision that will influence its operations, taxation, and future development. It is essential to consider all the aspects mentioned above and consult professionals (lawyers, accountants) to guide you in this decision.

Remember that the legal structure can evolve over time. It is possible to start as a sole proprietor and later convert your business into a corporation if the need arises.