This guide provides information on issues you must take into account when creating your own company.
Being self-employed has its pros and cons, which is why you need to be clear about: the idea for the business you want to create, the market in which you will launch it, making a good business plan, the competent authorities...
Self-employed workers can be any individual who regularly and personally does an economic or professional activity for profit by themselves and outside the scope of being managed or organised by another person and may or may not employ other employees. See the Self-employed Statute.
Being self-employed has a series of advantages and disadvantages that you must take into account.
It is a suitable business style for running very small companies.
It involves the least number of procedures and red tape for doing your work, given that you do not have to register a company.
It can be cheaper, as there are no legal persons created beside the self-employed person.
The responsibility of self-employed person is unlimited
They must cover any debts from their business with their own personal equity.
The self-employed company owner must handle all expenses and investments alone, as well as its management and administration.
If profits are high, it may be subject to high tax rates, as individuals are taxed at increasingly higher rates for higher income, while small companies pay a lower rate.
Before creating a company
All business plans are developed around an idea. In general, the factors that determine selecting an idea are:
Repetition of others' experiences: this is the reflection effect of new businesses, very frequent in periods when the economy is expanding.
New business opportunities in markets with supply gaps, newly created or with high growth
Technical knowledge of specific markets, sectors or businesses.
The experience of the future business owner, who has been an employee or director of another company and wants to become independent.
When they have an innovative product they think can generate market share.
When it comes to businesses or activities that are not complex, meaning that anyone could work in this activity.
Remember that there are tools and platforms that provide self-assessment of business skills and the business idea. You can access some of these tools and platforms on the portal of the Directorate-General of Small and Medium-sized Enterprises (DGPYME): Simulates your business project.
The business plan is a support document that many self-employed workers use to detail their business ideas. This document is fleshed out as you advance in your plans of what you want to do with your company.
This document summarises these point schematically:
Description of the company, business or business initiative. References of experience and goal of developers
Human resources organisational chart
Definition of the product or service to supply. Description
Needs that it covers
Differences from competitors' products
Existence of any rights on the product or service to market
Planning of sales issues. Market analysis and study
Establishment of distribution networks
The Directorate General of Industry and SME of the Ministry of Industry, Energy and Tourism has an interactive tool available to users to create a business plan.
Administrative procedures to start-up your business
To be an individual business owner or freelancer, you need to carry out a series of administrative procedures and not all of them with the same administration.
Procedures for start-up
To start-up a business, you must complete a series of procedures with different public administrations and public authorities.
Register with the Business Owner Census at the Spanish Tax Agency (AEAT).
Register with and obtain social security number at the regional office of the Social Security Institute.
Register for the social security system at the regional office of the Social Security Institute..
Register the company, register and add employees under the pertinent social security system - Procedures for hiring employees at the regional office of the Social Security Institute.
Report on opening a work centre at the Regional Department of Labour in the pertinent autonomous community.
Register for the property tax at the city council in which the company is located.
Obtain a business-day calendar at the Provincial Labour Inspectorate.
Register employment contracts at the Public State Employment Service.
Register distinctive signs at the Spanish Patent and Trademark Office.
Register personal data files with the Spanish Data Protection Agency.
Licence the business activity at the pertinent city council.
Are you interested in these topics? Here are links to websites of public administrations with information on these topics: financing, accounting, taxes, employees, data protection, social responsibility, environment, public trust, research, innovation, internationalisation, government procurement, official statistics on topics of interest.
There are support initiatives for companies offered by the General state administration, autonomous communities, local institutes, the European Union and private organisations.
Some of these initiatives work together. Here are links to the websites of some of them.
Business One-stop Centre. Network of 34 physical offices in different autonomous communities (regions). You can do all general procedures for starting your company at these offices in person. They will also advise you on financial assistance.
Online Processing System for Companies Constitution (CIRCE). Entrepreneur Service Point network for creating companies. This network helps you to start a company under these legal methods: 1 - Individual business owner 2 - Limited company 3 - New limited company. You can do it via internet or go to service point in person on the Company Service Point network. They are located throughout Spain.
Eugo. Information on administrative procedures for service sector companies in any European country. They are service activities regulated by the services directive.