How to Register a Business in the US from Spain

Step 1: Benefits of starting your US business from Spain

Starting a US business from Spain presents numerous advantages that can set the foundation for a prosperous entrepreneurial journey. First, the US market is one of the largest and most diverse in the world. Entrepreneurs have access to a vast consumer base and a wide array of industries ranging from technology to healthcare. This diversity allows for the exploration of niche markets and innovative solutions tailored to different segments of the population. Moreover, the ease of digital communication tools enables seamless management and collaboration across continents, ensuring that geographical barriers don't impede business operations.

Additionally, Spain offers a strategic advantage with its time zone, positioning it between the western US and other global markets in Asia and Europe. This unique positioning allows for extended business hours and the ability to interact with clients and partners in various regions throughout the day. Furthermore, the cost of living and operating in Spain can be lower than in many US cities, providing financial benefits that can be reinvested into business growth. Coupled with the rich cultural heritage, vibrant lifestyle, and strong work ethic, Spain provides an enriching environment that nurtures creativity and innovation, essential components for any successful international venture.

Step 2: How to start your US business from Spain

Starting a US business from Spain can be an exciting opportunity, as the United States offers a large and diverse market. The first step is to choose the type of business entity you wish to form, such as an LLC, corporation, or partnership. Each type has its own legal and tax implications, so it's important to research which structure best fits your business needs. Once you have decided, you will need to register your business with the appropriate state authorities. This typically involves submitting formation documents and paying a registration fee.

After registration, obtaining an Employer Identification Number (EIN) from the IRS is essential. This number is used for tax purposes and will be required for opening a US bank account and hiring employees. It's advisable to consult with a legal or financial advisor who is familiar with US business laws to ensure compliance with all regulations. Additionally, if you plan to operate from Spain, consider how you will manage your US-based operations remotely. Utilizing online services and establishing clear communication channels can help facilitate smooth business operations between the two countries.

Step 3: Opening a Business Bank Account

A business bank account is a separate account that is used exclusively for business transactions. But why is it important to open a business bank account?

Keeping your personal and business finances separate is crucial. A dedicated business bank account allows you to do just that, making it much easier to track your business’s income and expenses. This clear separation translates to simpler tax reporting come tax season.

But the benefits go beyond bookkeeping. Having a separate account can provide legal protection. It establishes your business as a distinct entity from yourself. In the unfortunate event of a lawsuit or bankruptcy, this separation can help shield your personal assets from business liabilities.

Furthermore, a business bank account can boost your credibility and project professionalism.

It demonstrates to clients and vendors that you take your business seriously and are committed to maintaining accurate financial records. This can be especially important in establishing trust with potential partners.

Finally, a business bank account is essential for accepting payments, even if you utilize a merchant account. Whether you use doola or another service, funneling those customer funds into a dedicated business account is necessary.

doola partners with banks that allow you to open a bank account remotely from anywhere in the world, like Mercury. Shop around and compare different banks’ fees and services.

Look for a bank that offers the features you need, such as online banking, mobile banking, or overdraft protection.

You may also want to consider working with a bank that specializes in small business banking.

Step 4: Understanding Your Compliance Requirements in Spain

Understanding Compliance Requirements for US Businesses in Spain

Expanding a US business into Spain presents numerous opportunities for growth and market diversification. However, it is essential to understand the various compliance requirements to operate legally and efficiently. Here are some key considerations:

1. Business Structure and Registration

Select the most appropriate business structure for your operations in Spain. Common options include:

• Sociedad Anónima (SA): Equivalent to a public limited company
• Sociedad Limitada (SL): Similar to a limited liability company
• Branch Office (Sucursal): An extension of the US company operating in Spain

Register your business with the Registro Mercantil (Commercial Registry) to obtain a Certificado de Denominación Social (Company Name Certificate) and a Número de Identificación Fiscal (NIF) (Tax Identification Number).

2. Taxation

Understand the Spanish tax system and its implications for your business. Key taxes include:

• Corporate Tax: Generally set at 25%
• Value Added Tax (VAT): Standard rate of 21%, with reduced rates for specific goods and services
• Income Tax: For employees, based on a progressive scale

Ensure compliance by registering with the Agencia Tributaria (Tax Agency) and understanding tax treaties between the US and Spain to avoid double taxation.

3. Labor Laws and Employment

Familiarize yourself with Spanish labor laws to ensure compliance in hiring and managing employees. Key aspects include:

• Contracts: Types of employment contracts and terms
• Working Hours: Maximum working hours, overtime, and breaks
• Salaries: Minimum wage requirements and salary structures
• Social Security: Contributions for employees' social security, healthcare, and unemployment insurance

4. Data Protection and Privacy

Ensure your business complies with Spain's data protection laws, which align with the EU's General Data Protection Regulation (GDPR). Important considerations include:

• Data Collection: Obtain consent from individuals before collecting personal data
• Data Storage: Ensure secure storage and processing of personal data
• Right to Access and Erasure: Respect individuals' rights to access and delete their data

5. Legal Representation

Consider appointing a legal representative in Spain to help navigate local laws and regulations. This representative can provide valuable guidance on:

• Commercial agreements
• Dispute resolution
• Regulatory compliance

Having a local expert ensures your business meets Spanish legal requirements and operates smoothly.

By understanding and adhering to these compliance requirements, US businesses can successfully establish a presence in Spain and capitalize on the opportunities available in this vibrant market.

doola offers a Total Compliance package, including bookkeeping services, to help you stay on top of your compliance requirements. This ensures your business operates smoothly and adheres to all legal and regulatory standards.

Step 5: Understanding Your Tax Obligations in Spain

Understanding Tax Obligations for Running a US Business in Spain

Expanding a US-based business to Spain can open numerous opportunities. However, it also brings complexities, especially regarding tax obligations. While both the United States and Spain have their own tax regulations, understanding the interplay between them is crucial for compliance and optimizing tax positions.

1. Double Taxation Agreements

Spain and the United States have established a double taxation agreement (DTA) to prevent businesses from being taxed twice on the same income. This treaty outlines which country has taxing rights over different types of income and offers mechanisms to alleviate double taxation.

2. Corporate Tax in Spain

Corporations in Spain are subject to the Impuesto de Sociedades, or corporate tax. The standard corporate tax rate is 25%, though newly-formed companies may qualify for reduced rates in their initial years. Knowing the specifics will help you plan your tax strategy effectively.

3. VAT (Value Added Tax)

Spain applies VAT to most goods and services. The standard rate is 21%, but reduced rates apply to certain items (e.g., food, pharmaceuticals). US businesses must understand the implications of VAT on their pricing strategy and compliance measures.

4. Permanent Establishment

The tax obligations will be different depending on whether your business has a permanent establishment (PE) in Spain. A PE could include a branch, office, or any fixed place from which business is conducted. Having a PE in Spain typically subjects your business to Spanish corporate tax on income attributed to the PE.

5. Payroll Taxes and Social Security Contributions

If your US business employs workers in Spain, you'll need to comply with local payroll taxes and social security contributions. In Spain, both employers and employees contribute to the Social Security system. Employers must understand these obligations to avoid legal penalties.

6. Reporting and Documentation

Spanish tax authorities require detailed documentation and regular reporting. Companies must maintain accurate records of their financial transactions, transfer pricing documentation, and other compliance-related documents. Timely and accurate reporting is critical to avoid fines and audits.

7. Professional Advice

Given the complexities involved, consulting with tax professionals who have expertise in US and Spanish tax law is highly recommended. They can provide tailored advice, help navigate the tax landscape, and ensure compliance with all relevant regulations.

• Seek dual-qualified tax advisors
• Keep abreast of changes in tax laws in both countries
• Regularly review and update your tax strategy

By understanding these considerations, US businesses can successfully manage their tax obligations in Spain and focus on growth and opportunities in the Spanish market.

It’s a good idea to consult with a tax professional or an accountant (or to hire these roles in-house) to make sure you’re not missing anything.

doola's Total Compliance package can handle your tax filings for you, ensuring you remain compliant with federal, state, and local tax requirements.

Step 6: How doola Can Assist

doola simplifies the incorporation and setup process for your company, ensuring you’re ready to charge customers, hire your team, and raise funds as quickly as possible.

Fill out your company details in the doola form in less than 10 minutes. Then, we’ll incorporate your company in any of the 50 US states, get your IRS tax ID (EIN) for you, and file your 83(b) tax election if needed. 

doola can also help you open a bank account and start accepting payments even before the IRS assigns your tax ID.

doola founders also gain access to exclusive discounts at leading software partners, one-click onboarding with select partners, and free CPA consultations.

The doola Application

It takes less than 10 minutes to fill out the details of your new company. You’ll choose your company structure (C corporation, limited liability company) and pick a company name.

Our instant company name checker will let you know if it’s available before you submit your application. You’ll add an address and phone number and review and sign your EIN SS4 letter in one click.

Forming the Company

doola will review your application and file your formation documents in the state within one business day. doola charges $297 for our Starter Plan and your first year of registered agent services (a state compliance requirement), and $297 each year thereafter to maintain your registered agent. 

You can also opt for our Total Compliance plan.

Getting Your IRS Tax ID (EIN)

After your formation in the state is complete, doola will file for your company’s IRS tax ID. Founders who provide a US Social Security number, US address, and US phone are eligible for expedited processing. All other users will receive standard processing. 

For standard orders, doola will fax your form SS4 to the IRS and then call the IRS to retrieve the EIN for you to expedite the process if we can, using real-time IRS data to determine when your filing is likely to be available.

Filing Your 83(b) Tax Election

Many startup founders choose to file an 83(b) tax election to potentially save on future personal taxes. doola can file and mail your 83(b) tax election in one click for both US and non-US founders — no trip to the post office required.

We’ll file it using USPS Certified Mail with tracking, and you’ll get a copy of your signed 83(b) election and proof of filing in your Dashboard.

Partner Perks and Discounts

doola partners with a range of third-party tools to offer special pricing or access to founders. We offer discounts on engineering, tax and finance, compliance, and operations tools, including Amazon Web Services.

doola also partners with Mercury to provide faster, automatic onboarding using your doola company information so you can get ready to bank and fundraise even faster.

Founders may also access discounts on other doola products, including up to one year of free credits toward payment processing.

Read our guides for startup founders, or learn more about doola and how we can help you set up your new business quickly and easily.

Turn your entrepreneurship dream into reality today!

We do our best to provide accurate and up to date information, however the information provided here are just guidelines. Please speak with a tax and compliance professional in your country