Spain Market Entry

Spain Market Entry

From a commercial point of view, Spain is one of the most internationally oriented countries in the world.

Its economy is 75% service sector, the most important areas of business opportunities are IT, renewable energy, biotechnology, aerospace, environment and automation.

Entering the Spanish market also opens the door to trade relations with Latin America.

Non-strategic foreign investments are not subject to any kind of authorization or prior notification.

The investor’s obligation is only to notify the investment in question within one month of its implementation to the General Directorate for International Trade and Investments of the Ministry of Trade (Dirección General de Comercio Internacional e Inversiones de la Secretaría de Estado de Comercio), purely for administrative, statistical or economic purposes.

A higher standard of requirements is then placed, for example, on participation in Spanish companies or the establishment of branches. Check smber for agriculture and fishing facts of Spain.

Payments above €10,000 need to be published within the scope of cross-border trade, within Spain the amount is €100,000. Specific types of payments are subject to anti-terrorist financing and anti-money laundering legislation.

For practical information regarding entering the Spanish market, we provide a link to the document Guide to Doing Business in Spain (2020) published annually by the Ministry of Industry and Trade of Spain in cooperation with foreign companies already doing business in the country. Here you will find everything you need about setting up a company, state support for investments, legal conditions, etc. – available in English and Spanish versions. The most common payment terms accepted by suppliers is payment deferral within 90 days from the date of delivery.

Market entry

From a commercial point of view, Spain is one of the most internationally oriented countries in the world. Its economy is 75% service sector, the most important areas of business opportunities are IT, renewable energy, biotechnology, aerospace, environment and automation.

Entering the Spanish market also opens the door to trade relations with Latin America. Non-strategic foreign investments are not subject to any kind of authorization or prior notification.

The investor’s obligation is only to notify the investment in question within one month of its implementation to the General Directorate for International Trade and Investments of the Ministry of Trade (Dirección General de Comercio Internacional e Inversiones de la Secretaría de Estado de Comercio), purely for administrative, statistical or economic purposes.

A higher standard of requirements is then placed, for example, on participation in Spanish companies or the establishment of branches.

Payments above €10,000 need to be published within the scope of cross-border trade, within Spain the amount is €100,000. Specific types of payments are subject to anti-terrorist financing and anti-money laundering legislation.

For practical information on entering the Spanish market, we provide a link to the document Guide to Doing Business in Spain (2021) published annually by the Ministry of Industry and Trade of Spain in cooperation with foreign companies already doing business in the country.

Here you will find everything you need about setting up a company, state support for investments, legal conditions, etc. – available in English and Spanish versions.

The most common payment terms accepted by suppliers is payment deferral within 90 days from the date of delivery.

Forms and conditions of operation on the market

A company can enter the Spanish market by finding a business partner or directly by establishing a local entity.

As for sales representatives , it is an established and recognized profession with a tradition, representatives tend to be sector oriented.

In exchange for their services, they receive regular payments and a percentage of sales.

Regional Association of Sales Representatives:

  • Málaga – www.malaga.gac.es
  • Catalonia – www.coacb.com/profesionales
  • Basque Country – www.coacbi.com

National Association:

  • www.ageco.pro
  • www.cgac.es

Another possibility of a business partnership is establishing contact with a distributor.

Spanish distributors mostly have a regional scope (2-3 autonomous regions). Sufficient room for margin/commission needs to be considered here.

Information about distributors can be found at:

  • www.einforma.com
  • www.interempresas.net

If you are interested in setting up a new entity on the local market, you can consider the following options:

The representative office is not an independent legal entity, it cannot carry out direct business activities and its business activities are practically limited to coordination, assistance, promotion and provision of information to the parent company. It has the same name as the parent company with the suffix “Oficina de Representación”. In Spain, they must have an official representative with a valid power of attorney. In the case of a representative office, no minimum capital deposit is required.

The branch already has a certain administrative independence. It has its own physical establishment and organization distinct from the main organization and also has a permanent representative with sufficient powers to act on behalf of the branch. It is subject to formal registration and accounting obligations of the same nature and scope as entities based in Spain. The main duties include the delivery of the financial statements of the parent company and the documentation of a certificate of changes relating to the parent company.

The subsidiary also has an independent legal status and is responsible for its obligations. The parent company is then responsible for the losses. No limits are placed on the number of employees or activities of the subsidiary (however within the framework of legislation and articles of association). For example, there is an obligation to document financial statements and audit them or keep records.

In general, a corporation (SA) works better than a limited liability company (SL) and its advantage is also the ability to hide the ills of the parent company.

Corporation (SA) – min. deposit EUR 60,000, repayment min. 25%, shares can be issued, board of directors min. 3 persons

Company s.r.o. (SL) – min. deposit EUR 3,000, repayment in full, shares cannot be issued, board of directors – min. 3, max. 12 people

Marketing and communication

As a large market, Spain is used to advertising campaigns, which, especially when entering the market, can be an essential instrument for promoting awareness of a given product or service.

Traditionally, according to statistics, the fields of telecommunications and systems, passenger cars, cosmetic, hygiene and pharmaceutical products, food products, distribution companies, beverages, financial institutions and the use of free time in the entertainment industry and personal consumption items invest the most in advertising.

An advertising campaign can be conducted on several fronts: conventionally (television, billboards, etc.), thanks to radio or print, in cinemas or in a smaller format and by distributing leaflets.

However, the coronavirus crisis has also confirmed the necessity of online marketing. To be successful, it is now almost necessary to have appealing websites as well as social networks such as Facebook, Instagram, YouTube, etc.

An important factor affecting sales are advertising campaigns associated with customer contests, raffles evaluating brand loyalty, etc.

In addition to continuous product innovation, there is a struggle between brands of a comparable category for the design of the packaging, the way and environment of the offer to clients, where the care of the brand image and its acceptance and support in key market segments play an important role.

In Spain, in the field of advertising, religious issues and the relationship with Catalonia are a sensitive topic, and advertisements with sexual undertones and double entenders are not appropriate in this area. Advertising agencies are united in the Federation of Advertising and Communication Companies (FEDE). An extensive list of advertising agencies can be found on the website: www.lafede.es

Issues of intellectual property protection

The protection of intellectual property is legally treated similarly as in other EU countries.

The basic legislative norm is Act 23/2006 of July 7, which amended and supplemented Royal Legislative Decree (Real Decreto Legislativo) 1/1996 of April 12.

This law incorporates Directive 2001/29/CE of the European Parliament and the Council, which harmonizes the protection of intellectual property in accordance with the implementation of the Agreement with WIPO (World Intellectual Property Organization).

Further links can be found on the website of the Ministry of Education, Culture and Sports.

The protection of intellectual property is also enshrined in the Civil Code (Código civil) articles 428 and 429 and in the Spanish Constitution of 1978, article 20.1.

Public procurement market

Legislatively, the public procurement regime was codified by the 1995 law, as amended later.

Significant competences are granted to local authorities during tender procedures, which decisively influence the selection of the contractor at the level of individual regions.

According to the findings of the OEU ZÚ Madrid, the offers of our companies (regardless of the commodity) have very little hope of success if they are not monitored long-term in advance and presented through a strong local representative.

Links to public contracts can be found on Concursos públicos, but you need to register to enter the current database. Other overviews can be found at www.ted.europa.eu (in Czech), www.boe.es and also on the website of the Ministry of Economy and Business – red.es.

In addition, we note that telecommunications, port management and operation, and air transport are gradually undergoing deregulation in infrastructure, from which the government, in addition to decentralization and the transfer of competences, promises mainly to save budget expenditures.

For an up-to-date overview of announced state contracts, it is advisable to consult the following government web portal, where you can also find the required profiles of Plataforma de contratación del sector público suppliers.

Payment terms, payment ethics and resolution of commercial disputes

The customer must pay the invoice within 30 days from the date of delivery of the product or service. The invoice must be sent within 15 days of the delivery of the product or performance of the service. A longer payment period can be negotiated, but it must not exceed 60 days. If the Spanish partner has found himself in a settlement, information about the bankruptcy administrator and the competent court must be obtained immediately and the documents handed over to them. Everything can be found in the public bankruptcy register, where there is information from the declaration of the debtor’s bankruptcy to the appointment of the bankruptcy administrator and the competent court to a description of the stages of the bankruptcy proceedings. Based on the data in the debtor’s documentation, the creditor informs the bankruptcy administrator about the bankruptcy by sending a call for applications for claims. Claims are registered with the bankruptcy administrator, who must be the exporter or his representative, asked to include the company in the list of creditors, he must be provided with an overview of the debtor’s claims – item, amount, origin, maturity and order of claim satisfaction. The deadline for the creditor to register claims with the administrator is one month from the publication of the resolution declaring bankruptcy in the Official Gazette (BOE), which in practice is extended if it is a foreign creditor based outside the country. If the data is not provided, the entity could lose its right, first the claims of the state and banks are satisfied, then the claims of private entities. if they are foreign creditors based outside the country. If the data is not provided, the entity could lose its right, first the claims of the state and banks are satisfied, then the claims of private entities. if they are foreign creditors based outside the country. If the data is not provided, the entity could lose its right, first the claims of the state and banks are satisfied, then the claims of private entities.

It is true that the out-of-court way should be used as the primary way to resolve the dispute amicably. Out-of-court settlement of civil and commercial disputes. disputes are possible at the Arbitration Court of the 3rd country. The procedure is relatively fast and efficient, the judgments of arbitration courts in the Czech Republic and Spain are mutually enforceable in the other country.

More-Act No. 60/2003Coll. of 23/12/2020 on arbitrations.

Visas, fees, specific conditions for traveling to the territory

No visa is required for Spain. For a stay of up to 90 days, there is no need to register with the foreign police in Spain.

For stays of more than 90 days, registration with the foreigner’s police is mandatory, which will issue a registration certificate. Residence permits (tarjeta de residencia comunitaria) are no longer issued.

The registration confirmation also contains the foreigner’s identification number, the so-called NIE (similar to the Czech birth number), which is used in administrative and business dealings (for buying real estate, vehicles, opening a bank account, paying taxes, social security benefits, etc.).

Entry to Spain is possible for Czech citizens with a valid travel document, i.e. a passport or an ID card of the Czech Republic.

In Spain, it is possible to drive motor vehicles with a valid Czech driver’s license and a so-called green card is mandatory. When traveling by motor vehicle, we strongly recommend that you follow the traffic regulations in Spain. The fines for violating them are quite high and the police require them to be paid on the spot if the driver does not live in Spain (does not have a registration certificate).

For example, the following are newly modified: the use of a mobile phone while driving only as hands-free; turning off the mobile phone and radio when refueling; prohibition of the use of radar detectors; use of a reflective vest if the driver stops on the road or on the roadside and gets out of the vehicle, etc. The maximum speed on highways is 120 km/h. Customs controls are abolished in the EU.

However, the import of certain goods into Spain after a certain limit ceases to be considered as the import of goods for own use and becomes the import of goods that must be declared to customs.

Spain is a relatively safe country. However, a certain degree of general crime (pickpocketing, etc.) must be expected here.

A typical phenomenon is road/highway crime, where criminals pick out the victim’s car, most often at a gas station or rest stop, damage its tire and then follow it. Once the driver detects the fault and stops, the perpetrators pull up behind him and one offers “help” while the other steals the victim’s car unnoticed.

In general, we recommend the following measures:

  • not having important documents, valuables and money in one place
  • leave passports, airline tickets and large amounts of cash in the hotel safe if possible
  • carry only small amounts of cash with you, unless you plan to make a large purchase, have separate payment cards
  • Do not leave documents, valuables, etc. in the car.
  • do not sleep in abandoned places

When it comes to moving around the country, you can use the high-quality public transport network, it is possible to move around the cities normally on foot, however, we do not recommend this at night and in deserted locations.

Tap water in Spain (except the islands) is mostly potable, but its quality varies greatly. E.g. Madrid has very good water quality compared to Barcelona.

Employment of citizens from the Czech Republic

Czech citizens can reside in Spain for a long time completely freely as part of the free movement of persons in the EU. There is no need to apply for a work permit or work visa.

Entrepreneurs must obtain a business permit (we recommend consulting the relevant town hall) and register at the social security office to pay social insurance (health care is paid for from taxes) and at the tax office to pay taxes.

Working conditions

Employment of local forces by foreign companies is subject to the same legislation as employment by Spanish companies.

Maximum length of working hours: 40 hours per week, provided that the collective agreement or individual employment contracts define working hours precisely.

With exceptions, overtime work is a matter of voluntariness, if it is paid, but it must not exceed 80 hours/year.

Minimum rest period: at least 1 and a half days per week

Minimum length of leave per calendar year: 30 calendar days – for each month (30 days) of employment, the right to days of leave arises.

Minimum wage

In 2020, the minimum wage was 950 euros per month. In 2022, there was an increase to 1,000 euros per month.

Wage determination and overtime compensation are based on collective bargaining and are adjusted according to the type of job classification.

In addition to the monthly salary, the employee is entitled to the 13th and 14th salary in a given year. The most expensive item is severance pay when the employment contract is terminated by the organization or in the event of early retirement.

Conditions for posting workers to Spain

In the case of posted workers registered in the Czech Republic (or anywhere else, regardless of EU membership), whose stay in Spain does not exceed 183 calendar days, the wage and labor law conditions are governed by the regulations of the country in which they are registered for work.

If they stay longer than 183 calendar days, they are no longer considered posted workers and must meet all the conditions for a permanent work stay.

Taxation of the activities of posted workers is governed by the treaty between the Czechoslovak Republic and Spain on the prevention of double taxation and the prevention of tax evasion (No. 23/1982Sb). Pursuant to Articles 7 and 15 of this agreement, Czech companies and their employees are obliged to pay taxes in the Czech Republic and are exempt from tax obligations in Spain. Notification is not carried out in the EC. It is only necessary to have a contract concluded with the company for which these workers will carry out their work. The contract partner in the EC must be given a copy of the certificate of registration of the sending Czech company with the Financial Office in the Czech Republic, issued with a validity of 1 year. In addition, the partner is given copies of the documents issued by the competent authority in the Czech Republic after reporting the posting of workers. A Spanish translation is recommended. Sanctions for non-fulfillment of contractual terms are set by the companies themselves. The state does not regulate them. At the place of performance, posted workers must have ordinary travel documents available – for EC, a passport or identity card is sufficient. Furthermore, they must have the prescribed certificates for those professions for which they are required in accordance with EU regulations. For professional certificates issued in the Czech Republic of the EU, their recognition by the Spanish authorities or translation is not prescribed, however, it is recommended to have a translation (and if it is verified by the Spanish consulate, all the better) in order to avoid the event. conflicts with labor inspectors. In order to keep documents on the performance of activities, there is an obligation to keep relevant documents for 4 years after the end of the assignment, the recommended practice is 5 years. Depending on the nature of the work, professional documents may be required on the competence of workers to perform it – all in accordance with EU regulations.

Fairs and events

The most important Spanish trade fairs (information as of 10/05/2022)

Mobile World Congress (Barcelona)

date: 27.2. – 2023

One of the world’s most important exhibitions of technologies and companies of the telecommunications industry.

SmartCity Expo WorldCongress (Barcelona)

date: 15. – 17.11. 2022

Annual international exhibition of entities dealing with water and waste management, automation and health protection.

Bienal Internacional de Máquina-Herramienta (Bilbao)

date: 5/30–3 6. 2022

An opportunity to meet professionals from the engineering industry, ranging from automation and aerospace technologies to the production of capital goods and home appliances to energy sources.

FEINDEF |Feria Internacional de la Defense (Madrid)

date: 17. – 19.5. 2023

A forum for defense and security technology professionals. It provides the opportunity to gain knowledge about innovation, business partners and international cooperation, and also aims to serve as a stepping stone to enter the European defense market and research field. Dozens of international delegations regularly participate in the event.

Alimentaria (Barcelona)

date: 4 – 7 April 2022

A trade fair of the food industry and gastronomy sector of world importance. It offers a wide range of exhibitors from the food industry, kitchen equipment and catering facilities.

Fruit Attraction (Madrid)

date: 4-6 October 2022

An event of global proportions on the fruit, vegetable and horticulture market. The goal is to support international exports and exchange experience and innovation. At the same time, it is also possible to connect to the digital platform Fruit Attraction LIVEConnect, on which communication between those interested in the sector takes place.

FIT | International Tourism Fair (Madrid)

date: 18–22 January 2023

One of the most important world trade fairs in the field of tourism. After the crisis years, the event is returning to its pre-covid figures, in 2022 111,193 visitors from 127 countries took part.

ARCOmadrid |Feria de artecontemporáneo (Madrid)

date: 22-26 February 2023

One of the most important modern art fairs in Europe.

Complete information on fairs and congresses can be found on the website of the Association of Spanish Fairs – Asociación de Ferias Españolas

Selection of trade fair administrations:

  • Barcelona – Fira Barcelona
  • Bilbao – BEC
  • Madrid – IFEMA
  • Seville – FIBES
  • Valencia – Feria Valencia
  • Zaragoza – Feria Zaragoza

Spain Market Entry