In Spain exist a number of different forms whereby one can start doing business. Below you can find a short introduction to the main types of business forms available in Spain. You can also find information about owning a company in Spain as a none EU citizens and getting a work permit to work in Spain.

Business Forms in Spain

Self-Employed
The most simple form to do business in Spain is to work as a self employed (Autonomo). This form is frequently used by people who provide services like a taxi driver, lawyer or plumber. The paper work involved with staring as a self-employed and the ongoing declarations are simpler compared to a company but there are a number of disadvantages. First of all if you are self-employed you will be personal liable for all the services provided and your personal belongings can be reached by your creditors. Furthermore you will not be able to have employees working for you (unless they are also self employed) and there are a number of fiscal disadvantages if you have high earnings.

Limited Company
The limited company (Sociedad Limitada) is the most common form to start a business in Spain. To start a limited company you will only need 3,010Eur as initial backing capital and the company can be formed with one or more owners.
A limited company can be recommended for all small and medium sized businesses. The liability of the owners is limited to the initial capital of the company and this form also requires a more simple form of accounting compared to a corporation (see below).

Corporation
The corporation (Sociedad Anónima or S.A.) is normally used when big companies want to settle in Spain or for bigger projects. The initial capital needed to form a S.A. is 60,000Eur. The liability of the owners is limited to the initial capital but there are number of requirements a S.A. have to follow. Each corporation must have a Board of Directors ("Consejo de Administracion"), and must hold a Shareholders' General Meeting ("Junta General de Accionistas") and furthermore there are some strict accounting requirements.
The S.A. has some tax advantages for high earnings and if you want to sell shares publicly this is the best option available.

Workers' Cooperative
This is a company owned by the workers and requires a minimum capital of 25,000Eur and 3 workers as partners.

Partnerships
The main characteristics of this type of partnership is the personal and unlimited liability of each partner and the fact that a partnership may not be offered to third parties without the agreement of all partners.

Branch
Setting up a branch is an option for foreign companies who wants representation in Spain.
A branch is an organisation depending on its head office situated abroad and is not a legal entity of its own. To set up a branch is normally faster than setting up a new company but it still has to be done through a public deed and entered in the Commercial Register.
There are some requirements to a branch like having a permanent address and a fiscal representative in Spain. As to the yearly accounting and obligations they are very similar to those for a limited company.

None EU Citizens - Starting Business in Spain

In Spain all nationalities can own a property and a business. Although none EU citizens and companies are allowed to invest in Spain and own a business this does not automatically give them the right to work in the company as well.
To work in Spain everybody will need a work permit. EU citizens can easily get this permit due to the free movement of workers within the European Union.
The main condition necessary for none EU citizens to be able to apply for a work permit is that they can show they have a job offer with a fixed contract in Spain.
Even though you have a company in Spain who are willing to sponsor your application it is still a difficult process and can take a very long time depending on what type of job offer you have.

If you set up a business the only advantages when applying for a work permit is that you do not need to have a job offer (or if you apply when the company is up and running you can make this offer yourself). In any case the Spanish authorities will need some kind of proof of your business intentions and that you will create wealth in form of employing workers and paying taxes to the Spanish state. This can be difficult to proof until your company has been running for some time and it will therefore take time before you are granted a work permit.
In some cases the best option is to start to apply for a residence permit (for this you will only need to proof that you have enough funds to maintain yourself while you are in Spain). As mentioned you can set up a company in Spain without a work permit you just need to hire someone to work in your company (you can work unofficially in the company as well) and when you can show good results you can then apply for a work permit.