How much does an employee cost in Spain? (includes calculator)
One of the main concerns for foreign businessman who intend to establish a company in Spain is how much does an employee cost in Spain, ie, what is the monthly amount of tax to be paid to the Social Security for each worker. At the end of this post you will find a cost of hiring an employee calculator.
Likewise, briefly understanding the operation of the Spanish labour contribution system to the Social Security can provide more security in the decision process of creating or expanding a business to Spain.
Closing a limited company in Spain
INTRODUCTION
The process of closing a limited company in Spain consists of two phases. The first phase is called dissolution and the second liquidation. The objective of these two phases is the final closure of the company. It is important to understand that the beginning of the closure with the dissolution does not mean that the company is paralyzed, it simply enters a period (called the liquidation phase) in which the company has to dispose of the assets it has in order to proceed to the final closure. During this period, the company’s objective stops being that of obtaining profit and becomes the final closure.
Steps to establish a Limited Company in Spain [2 of 2]
….. Read part 1
OTHER THINGS TO TAKE INTO ACCOUNT
If you do not have Spanish ID
Any person who wants to form a company must have a Spanish DNI. In case of being a foreigner and not having a DNI, it will be essential to obtain a foreigner identification number, the so-called NIE. It is important to bear in mind that the NIE is necessary for anyone who wants to be an administrator or partner of the company. In the case of which one of the partners is another company, it must obtain a Spanish Tax ID (NIF).
Steps to establish a Limited Company in Spain [1 of 2]
Do you want to start your own business in Spain? Do you need to create a Limited Company for your business?
These are the steps to follow:
CHOOSE AND OBTAIN NAME OF THE COMPANY
The company we are going to create must have a unique name, a name that no other company has. To avoid that two companies have the same name, there is a registry, Central Mercantile Registry, in which all existing companies are listed and to which we must ask if the name we want is free.
Transfer prices agreements with the Spanish Tax Office
As I explained in another post, transfer pricing is the price agreed between related parties for goods and services. This price can be cause for review by the Tax Agency. These prices should be those which would have been agreed between two independent companies that operate in the same market.
To avoid conflicts between related companies and the tax authorities, the company can reach preliminary transfer prices agreements with the tax authorities on valuation of related party transactions. These agreements can be both national and international.