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Legal Issues When Starting a Business in Spain

Spain has become a very interesting place for foreigners to establish their businesses. They can find a solid entrepreneurial ecosystem, skilled partners and workers, and nice weather. All these elements are attractive enough to start an entrepreneurial adventure.

In this article we are going to outline some of the basic requirements that everyone should have in mind when starting a business in Spain.

Legal Structure

In Spain there are two main ways to structure a business: the first one is to work as a Freelancer (Autónomo), and the second one is to incorporate a Spanish Limited Company (Sociedad Limitada).

Identification

First of all, any foreigner interested in starting a business in Spain, either as a freelancer or through a Spanish Company, shall have a foreign identification number (NIE).

Freelance (Autónomo)

To be an Autónomo means to begin a business as a self employed person. There are two steps to become an Autónomo; first of all you have to notify to the Spanish Tax Administration (Agencia Tributaria) that you are going to start an economic activity, and then you should register to the regime of self employed persons in the Social Security (Seguridad Social), with a notification validated by the Tax Administration.

Once you are registered in the Social Security, you will have to pay a monthly fee, being the base fee 256,72 euros. However, current reductions for new Autónomos have recently being approved by the government, including the following features:

For new Autónomos under 30 years old the following reductions will apply:

  • An 80% Social Security fee reduction during the first 6 months. (50 euros approximately);
  • A 50% Social Security fee reduction during the next 6 months after the previous period of time;
  • A 30% Social Security fee reduction during the next 18 months after the previous period of time.

For new Autónomos with 30 years old or over the following reductions will apply:

  • An 80% Social Security fee reduction during the first 6 months. (50 euros approximately);
  • A 50% Social Security fee reduction during the next 6 months after the previous period of time;
  • A 30% Social Security fee reduction during the next 6 months after the previous period of time.

Furthermore, an Autónomo must comply with several tax obligations, mainly to present its quarterly declarations of taxes relating VAT and Retentions made by other professionals.

Spanish Limited Company

A Limited Company is the legal structure most used in Spain to start a company. As stated above, it is necessary to hold a NIE to become a shareholder of a Company.

The main steps to incorporate a Limited Company are as follow:

  1. First of all, it is necessary to obtain the Name of the Company through a Certificate issued by the Companies Registry (Registro Mercantil).
  2. The next step is to open a bank account and to deposit the minimum share capital to incorporate a Limited Company, which is 3.000 euros. The Bank will issue a Certificate of deposit that shall be presented at a Public Notary.
  3. Both Certificates are necessary to incorporate the Limited Company before a Public Notary. All the shareholders will have to be present and sign the deed and the Articles of Associations of the Company.
  4. After signing the deed, it will be necessary to obtain the Tax Identification Number of the Company (NIF = Número de Identificación Fiscal).
  5. Finally, the incorporation of the Company will have to be registered at the Companies Registry, and the beginning of the activity shall be notified to the Tax Administration.

It is important to add that it’s necessary to appoint a Director of the Company, and that the person occupying this role will have to be registered at the Social Security as an employee or as a self employed person (Autónomo) if he or she is a shareholder of the Company with 25% or more of the share capital.

I hope that this article has served its purpose of being a general guideline to evaluate the different options that any person has prior to start a business in Spain. We support the entrepreneurial initiative and encourage any person to follow its goals.

If you have further questions or any doubts regarding initiating your project, feel free to contact us at i[email protected]

Pablo Mancía
Lawyer
www.delvy.es

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5 Tips To Be Successful In A Business Fair

Managing a company’s presence in a business fair can be a lot of work (and stress) but certainly can be just as rewarding. There is no better place to get in touch with your target, especially if you are an ecommerce guy.

But fairs are also a hostile place where too much is on display and everyone is calling for attention. A few simple tips might help improve your presence and leave a good mark in the minds of those who got in touch with you.

1) Have a vision. A vision helps you transmit one idea and not a thousand. One idea, one message will definitely have more chances to break through than many smaller ones. One idea leads to clearness. Many will only achieve confusion.

2) Be visible. But not loud. You want to be noticed without shouting. People are curious, find a way to play with their curiosity and attract them to your stand.

3) Be longer lasting. Visitors will be overstimulated by things to look at and try. You want to give them something they will be able to take home in order to give it a second look. Once the circus is over they will be more relaxed and will take it into proper consideration. Be careful, whatever you offer needs to be original. You won’t be the only one handing out goodies.

4) Produce engagement. You want people to come back to you. That is more likely to happen if there’s something “in” for them. They are not just buyers. Whatever you are “selling”, they should have a special reason to choose you. Make them feel like an active part of the deal.

5) Observe the context and learn from the past. Pay attention to what others do and learn from their experience. Being inspired by someone’s idea is not stealing. It is upgrading. Nothing new is ever invented. It is all just a matter of recycling with creativity.

There are no real rules. And flexibility should definitely be part of your attitude. But these five tips can help you achieve better results.

Eddie Pezzopane
Events Manager & PR
Camaloon

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Lifecycle of an organization

Most of us work in a startup environment or are in touch with entrepreneurs and groups of people creating synergies in similar situations. It all starts out with a first idea and countless days and nights discussing, sketching out and turning it over again. The first pioneer looks for other passionate entrepreneurs, for specialists in their fields or for strong counterpart. Little by little, he is joined by a team. If all goes well, the idea grows into a product and the loose group of co-workers becomes an organization.

But how does a group of people become a company? How is this change attained and how does the organization evolve?

The way an organization is formed and grows is different for each product, for each entrepreneur or even for each culture but still there is an underlying pattern that is followed. I like to compare this process of growth to biological cycles that are generally structured by birth, development, flourishment and transformation or death. Just like any other being an organization goes through these same different stages in its evolution.

In the beginning of the 19th century, the researchers Bernard Lievegoed and Friedrich Glasl identified these evolutionary phases in the life of an organization as: Pioneering, Differentiating, Integrating and Associating and came up with the so called Lifecycle of an Organization. This theoretic model functions as a tool for analyzing the development of a start-up but should not be taken as the one an only guideline or golden rule.

I like to turn to this model for structure and reassurance and I consider it useful for any entrepreneur.

Pioneering

Following the cycle of life a company has its beginning in the Pioneering phase where the biggest influence on the company is the founder itself. His personality, ambition and passion run through all parts of the organization. The organization is build around people — it makes the organization very adaptable. It is autocratic and mainly focussed on the vision.

“If they cannot imagine the future, they cannot create it.”

This statement taught by Coimbatore Prahalad to his graduates in Business Strategy at the University of Michigan sums it up pretty well. The organization that is acting like a family all gathering around the pioneer depends upon one person and its vision. It relies on his or her capacity to imagine the future circumstances, to find a place for the product and to adapt accordingly.

The organization starts shaking and is in need to move forward soon enough. The first symptoms that alert the pioneer of the need to evolve are a fast changing environment, an accelerated organic growth with unknown customers or even new hires that do not match the leadership style of the first pioneers.

This might result in decreasing profits, in a dent in the growth curve, in internal conflicts with the leadership style and the communication of information and even a decrease in motivation, strength and flexibilty of the team.

The organization enters a crisis and needs to change, but how can the transition be made?

According to the Lievegoed/Glasl model the answer is Scientific Management as it was thought up by Henry Ford in the beginning of mass production. The organization has by now successfully entered the market but it needs some order and structure in order to grow further and not be distracted by internal distress and inefficiencies.

Differentiating

One way to get to the next stage (Differentiating) is by creating this order through process observation and standardization. The company needs some protocols and a stronger focus on tasks instead of people. Growth makes it inevitable to create structure, standard and control.

At some point creating structure means creating inflexibility and that is where the next crisis hits our little organization. When before we were focussing on the individual we have now brought into existence some kind of hierarchy that gives rise to coordination and communication problems. Instead of focussing on the person we focus on the task and create a fertile ground for rivalries. With new processes problems of coordination arise. Not all is well in the organization that has gone from chaos to structure.

It seems as though the established order in the Differentiating Phase has created barriers for creativity and flexibility.

Integrating

The characteristics of the first two phases come together in the next stage of life of the organization: Integration. The integration stage is the turning point in the life of the organization as it combines the spontaneity and spirit of entrepreneurship of each team member in the first phase with the standardization and process orientation of the second phase.

Through a new focus on the strength of each individual the Integrating stage is attained. It completes the development of the complete organism and is known as a synthesis of pioneering and differentiating.

The organization is characterized by a horizontal orientation, high autonomy, responsibility and self-initiative for the single worker and decentralized, autonomous teams.

Our organization has evolved to be a living organism.

The circle of life could stop here at the Integrating phase as the company has succeeded in ‘crossing the chasm’. The company is no longer an experiment or prototype but it has reached significant market acceptance, early growth and a noticeable high employee morale.

Associating

Nevertheless a startup can not only live on its own but is depended on its environment. With this, every organization enters into contact with other companies: partners that help in the value creation chain. In the last phase of the evolution we are looking at the dissolution of borders in order to become one with providers and other partners. Company biotope — such as the Japanese Keiretsu systems — are formed.

“Focus not just on your competitors, but also on your collaborators and complementors” C. Shapiro (1998)

***

The environment we work in is in constant change and we feel uncertainty on a day to day basis. If all goes well, our start-up grows very fast in all directions. We develop new products, enter new markets and hire new experts — the change is constant and omni-present.

The model of evolutionary growth (created by Lievegoed / Glasl) that I presented to you is a good handbook to give us guidance. If we feel lost and confused by small crisis, great communication complications with our 5-head strong teams or even slow-downs in growth, we can turn to this model to find advice and comfort.

The model of evolution can give us inspiration to grow our organization to be an autonomous and healthy living organism in close contact with its environment.

Bettina Groß
CMO at Camaloon

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itnig at the Mobile Mobile Conf, Kraków! #mmconf

Last April I was sent from itnig to Krakow (Poland) to attend one of the best Ruby conferences in Europe: Railsberry. What I later discovered was that just a few days before Railsberry there was another really cool conference, organized by the same people, about mobile development. So there I went!

I’m talking of course about the Mobile Mobile Conf, or #mmconf. In short, #mmconf is a conference for mobile designers and developers to share what they think is going to be the next big thing. After the talks they use the wonderful environment of the conference/Krakow to meet with other people working on the same.

The talks covered topics such as “native vs html5”, multi-platform, the future of mobile, the relation between “mobile” and “web” and marketing of mobile apps. I guess we could sum up the whole message of the 2-day conference with the message from Brad Frost in his talk:

For a future friendly web

One thing that developers (in this case specially mobile developers) have to always keep in mind is:

We don’t know what device will be under the christmas tree two years from now.

Being an advocate of Mobile First, Content First, responsiveness, etc, Brad sums up the 5 features that a future friendly mobile app/web must have as follows:

  • Ubiquity: Same content everywhere. People DO WANT to do the same things on mobile, don’t assume they’re just looking around. Mobile e-commerce growing like crazy is a good proof for this.
  • Flexibility: Give the best possible experience given the constraints of the devise being used. Don’t try to always do everything, but do it the best possible way.
  • Performance: 74% of the people will abandon a site if it takes more than 5 seconds to load. Performance is a feature.
  • Enhancement: Mobile-first, enhance progressively to add extra features or better experience if the bigger display allows it.
  • Future-friendly: Be backwards-compatible to try being forward-compatible.

Slides (from the same talk, but in a different event).

Jordi Romero
Partner at itnig

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Interviewing Ash Maurya, entrepreneur and author of Running Lean

Yes, Ash Maurya was holding a talk at itnig! He spoke about his second workshop, “The Art of the Scientist”, and we took the chance to make him some questions about him and the Lean Startup Movement. For Ash, “the principles behind Lean Startup are very simple and seem common sense and obvious. But practising it, is where the hard part comes.” Here you have the whole interview. Enjoy!

http://www.youtube.com/watch?v=zZoE11YZbyo

How did you get into Lean Startup movement?

I have been an entrepreneur for many years. And one of the things that I consciously kept running into was that the cycle time for going from “idea” to “successful product” was just too long. That’s why I have always been in search for finding better and faster ways to build successful products. And when I run into Lean Startup, a lot of the ideas resonated with me, and that’s how I got started. In many ways I decided to start testing a lot of its ideas, because putting them to practice was not as obvious… so I started a blog and that blog eventually turned into a book. That’s kind of the quick way how I got into the whole process.

What’s is your best definition of Lean Startup for someone who is just starting with it?

There is a lot of confusion about Lean Startup. For me, the most concise definition is that it is an organization that maximizes learning about what is riskiest in your business model per targeted time… so, speed is very important, learning is very important, and focusing on the right things is very important.

Does Lean Startup scale? How can we keep using its methodologies as we grow our team, and the company in general?

Sure, Lean Startup does scale. And there is lots of case studies that you can find about big companies, companies into it, using it… You can also study a lot of their models. Definitely, there are challenges. Fundamentally Lean is about breaking away the specialisation trap, so trying to build more cross-functional teams, trying to build an experimentation culture. I find that that’s sometimes harder to inject into a big company, which has lots of existing processes. So, I find bigger companies experimenting more with smaller innovation teams. For a small company, one of the challenges when you start practising Lean, as you grow, is try to maintain that level of culture experimentation and building smaller teams. And there you can look at models like Facebook: it is probably a good model of how do they build small innovation teams versus large vertical teams.

Do you have any killer strategy for prioritizing? How can we know we are prioritizing well?

That’s part of what I’ve been researching a lot lately and what I’ve starting to talk and blog about: I find that the principles behind Lean Startup are sometimes very simple and seem common sense and obvious. But practising it, is where the hard part comes. And it starts by prioritizing the right kinds of risks. So if you incorrectly prioritise risks, you start running experiments which have mediocre results. I would say that there’s just new work that’s being done. I don’t have all the answers yet, but part of it is, working with advisors, working with people, looking at key metrics in your product, and trying to focus on a few things at a time instead of trying to tackle everything about your business.