A Remote Worker’s Guide to Setting Up a Business (Sociedad Limitada) in Barcelona Maria, March 23, 2025April 17, 2025 As someone who thrived through a move to Spain thanks to remote work, I faced an important decision for my tax situation in Barcelona: establish a limited company (Sociedad Limitada) or register as a self-employed worker (autónomo). If you’re more of a visual learner, check out my YouTube video where I talked about everything I learned when setting up my own business here in Barcelona – including the costs, the benefits, the headaches, and most importantly, how to make it all work while maintaining your remote lifestyle. Here’s a quick view of the structural differences between Autónomo and Sociedad Limitada (SL)— ParameterAutónomoSLLegal statusIndividualLegal entityLiabilityPersonal liabilityLiability limited to capitalMinimum capitalNot requiredminimum 3,000 eurosRegistration process1-2 daysup to a monthRegistration costsUp to 500 eurosUp to 2,000 eurosTaxesProgressive up to 47%Fixed rate of 25% (15% for newly established SLs, terms & conditions apply) Which Structure Should You Choose? If you’re just starting your business and your annual income is below 60,000 euros, Autónomo is a quick and convenient way to get started. It’s perfect for freelancers, specialists, and small shops. However, be prepared for the risks to fall on you, and taxes could rise significantly if your income increases. On the other hand, if your business is growing, you need to scale up, or you want to minimize personal asset risks, SL would be the better choice. Despite the more complex registration process and additional costs, this structure provides more protection and potential benefits, especially for larger projects. My partner and I ultimately chose to form an SL, partly because we were launching an Amazon business that would initially target US customers—having a Spanish business registration would benefit us as sellers. Navigating the Spanish Bureaucracy Challenge Finding accurate information about setting up a business in Barcelona proved frustrating. The challenge was compounded by: Conflicting information online My limited Spanish language skills The complexity of Spanish bureaucracy These obstacles led us to consult with a lawyer to get reliable answers to our questions. When in doubt, always consult with a business accountant or a tax specialist. Essential Information for Business Setup in Spain Legal and Tax Requirements Dual Registration: When establishing an SL, the designated administrator must also register as autónomo Social Security Payments: Autónomos must pay monthly social security (seguridad social) First year: €87/month Second year: €300/month VAT Considerations: Only charge IVA (VAT) on invoices to Spanish companies—no IVA required for international clients Income Declaration: All income, whether from Spanish or international sources, must be declared Tax Filing Schedule: Mandatory quarterly tax returns and annual income tax filings Practical Considerations Professional Support: A good accountant who speaks your language is crucial for managing business finances. Expect to pay €150-200 + IVA monthly for their services. Home Office Benefits: You can claim 25% of rent and utilities as business expenses if your registered business address is your home Amazon Seller Requirements: Your accountant (gestoría) must create invoices for Amazon income transfers, as Amazon doesn’t provide these documents Keep meticulous records: Spanish bureaucracy loves paperwork, so save every invoice, receipt, and document Consider timing: July and August can be frustratingly slow months to get anything official done—everyone’s on vacation! Language matters: While you can get by with English in many situations, learning some Spanish (and ideally Catalan) will open more doors. This structured approach to business formation helped us establish our presence in Spain while maintaining our remote work flexibility. Setting Up a Sociedad Limitada (S.L.) What is an S.L.? A Sociedad Limitada is the Spanish equivalent of a Limited Liability Company (LLC). It separates your personal assets from your business ones—a huge plus if things go south. The S.L. Setup Process Name reservation: Apply at the Registro Mercantil Central for a certificate confirming your company name is available. Company statutes: Work with a lawyer or gestor to draft your company bylaws. Notary time: Take all your documents to a notary to sign the deed of incorporation (escritura de constitución). This is a formal affair and costs a few hundred euros. Tax registration: Get your company’s tax ID (CIF) by submitting Modelo 036 at the tax office. Register with the Mercantile Registry: This makes your S.L. officially exist in the eyes of Spanish law. Bank account and capital: Open a business bank account and deposit the minimum capital (€3,000). The bank will give you a certificate confirming this deposit. Social Security again: Register your company with Social Security if you plan to hire employees or yourself. How much does it cost to set up an S.L. in Barcelona? Here’s a breakdown of everything we spent: €636 – lawyer fee €775.78 – notary fee for the business registration €171.18 – gestoria (setting up digital certificates) €16.94 – Registro Mercantil Total: €1600 — we declared this as business expense S.L. Tax Benefits The corporate tax rate is currently 25% (15% for new companies during their first two profitable years—terms and conditions apply). You can generally deduct more expenses than as an autónomo, and the structure allows for easier expansion. Starting a business anywhere has its challenges, but Barcelona’s quality of life makes the bureaucratic headaches worthwhile. Got questions? Drop a comment or send me an email. Expat Life Life in Spain