Complete guide to doing business in Spain in 2025, for growing startups and entrepreneurs

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Spain expansion overview Why expand business operations to Spain? Challenges of doing business in Spain How to set up a business in Spain? Which cities and areas in Spain are best for businesses? Business etiquette and culture in Spain Tips for doing business in Spain Grow your business in Spain with Wise Business

Considering launching a startup in Spain, or expanding your UK business there? Entering a European market is a popular next step for many UK entrepreneurs, partly because of the opportunity to access the EU Single Market. Spain also offers great quality of life for entrepreneurs moving there, thanks to its sunny weather and fabulous food.

But like with any foreign market, Spain also presents a number of challenges for new arrivals.

In this comprehensive guide, we’ll cover all the essentials you need to know about doing business in Spain.

This includes the benefits and obstacles to starting a business there, tips on business etiquette and corporate culture, and a rundown of some of the most business-friendly cities and regions in Spain.

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Spain expansion overview

Research is key to success when expanding to Spain, to understand local culture, business etiquette and regulatory requirements.

Consideration	Description
Opportunities/benefits	Access to the EU Single Market, strategic location, highly skilled workforce, government startup support, opportunities across multiple high growth sectors
Challenges	Burdensome bureaucracy, high unemployment, language barrier
Most attractive cities and regions for foreign entrepreneurs	Madrid, Barcelona, Valencia

Why expand business operations to Spain?

There are lots of reasons why UK businesses choose to expand their operations to Spain. For starters, it’s the largest country in Southern Europe, which means access to a potential market of nearly 48 million people.¹

But there are many other benefits too, which we’ll explore in more detail below.

Access to the EU Single Market

One of the biggest advantages of expanding to Spain has to be access to the EU Single Market. It’s the world’s largest single market, with a GDP of approximately €18.3 trillion and a population of around 450 million.²

The EU has a unified currency, free trade between member countries as well as common standards and regulations for products and services. This makes everything from trade to compliance easier.

Strategic location

Spain enjoys a strategically advantageous location between all markets of the Europe, Middle East, North Africa (EMEA) region - as well as having strong links to Latin America.

As it’s part of the EU, Spain also enjoys the benefit of many trade agreements including EU-MERCOSUR. This means reduced tariffs, easier international trading and preferential access to multiple countries.

Government support for startups

Spain’s government is actively working to boost entrepreneurship and support startups.

It even launched the Spain Entrepreneurial Nation Strategy, a 10-year plan to kickstart the country’s economy by fostering innovative entrepreneurship. One part of the plan is a New Startup Law, featuring various incentives such as tax benefits, streamlined procedures, and support.

In addition, startups can take advantage of a range of other government-backed schemes and incentives. These include tax breaks for research and development (R&D) projects and subsidised funding for SMEs.

There’s also a choice of visas that make it easy for foreigners to start a business in Spain, specifically for startups and growing businesses.

💡 Learn more about Spain's Entrepreneur Visa

For import/export businesses, another point in Spain’s favour is its Port of Algeciras on the southern tip of the country. It’s one of Europe’s busiest ports, a key trade hub between Europe, Africa and America - which handles more than 100 million tonnes of cargo a year.³

A skilled, highly educated workforce

Spain is known for its highly skilled, well-educated and multilingual workforce, particularly in sectors such as engineering, technology and healthcare.

This could make it the perfect place to find the talent needed to drive your new business forward - especially considering that labour costs are lower than in Northern Europe and the EU average.⁴

It’s also worth remembering that businesses based in Spain also have access to talent from across the EU, which potentially means a pool of over 80 million highly-skilled people.⁵

Opportunities across multiple high-growth sectors

One of the main reasons why Spain’s economy is in such robust shape is its strength across a diverse range of industries. For newcomers, this means opportunities across multiple high-growth sectors, including:

• Manufacturing
• Automotive
• Financial services
• Clothing
• Chemicals and pharmaceuticals
• Services
• Tourism

And of course, there’s tech - with rapidly growing tech startup ecosystems in Barcelona and Madrid in particular.

💡 Read our international expansion checklist

Challenges of doing business in Spain

While Spain may present many exciting opportunities for UK entrepreneurs and growing startups, it also has its challenges. It’s good to be aware of these from the outset, so you know what to expect and can prepare accordingly.

Here, we’ll take a look at a few of the most common challenges UK startups face when launching in Spain.

Burdensome bureaucracy

Spain is a country that loves its bureaucracy, and this can make things especially difficult for newcomers trying to navigate its maze of rules and procedures. Some of these can be extremely time-consuming and frustrating - for example, the typical construction permit requires 13 separate procedures and nearly 150 days until completion.⁶

As well as battling red tape, long waiting times, complicated admin processes and lots of paperwork, there’s also a complex legal and tax system to get to grips with.

So, you may need to work with specialists and local experts to keep up with compliance and regulatory requirements.

High unemployment

When starting a business in a new country, it’s always important to assess the socio-political and economic landscape - just in case any trends or issues may affect your new company.

One of these worth keeping an eye on in Spain is its high unemployment. At 10.4%, the country has the highest unemployment rate in the EU⁷ - with the situation particularly bad for young people. However, there have been definite signs of improvement in the last few years.

What this could mean for your new business is lower consumer spending and market spending, as well as broader impacts on the overall business atmosphere. It’s also not the most positive sign for Spain’s economy more generally.

Language barrier

There’s also a potential language barrier to consider. While English is spoken in the business world, Spain in general has one of the lowest levels of English proficiency compared to other EU countries.⁸

This means that in order to get by in the business world - especially when it comes to navigating government processes and tax requirements - you’ll either need to brush up on your Spanish or hire translators.

💡 Learn more about navigating risks of international expansion

How to set up a business in Spain?

The process of setting up an entity in Spain generally involves the following steps:

• Market research and planning, including developing a comprehensive business plan and conducting feasibility studies
• Choosing a suitable business structure - in Spain, options include:
  • Sociedad Limitada (SL) - Limited liability company
  • Sociedad Limitada Nueva Empresa (SLNE) - New enterprise limited liability company
  • Sociedad Anónima (SA) - Stock corporation/public limited company
  • Sociedad Comanditaria - Limited partnership
  • Sociedad Colectiva - General partnership
  • Branch office/representative office
• Registering your business with the Registro Mercantil
• Applying for the required licences and permits
• Establishing a physical or virtual office in Spain
• Opening a Spanish business bank account - you can also use an international account such as Wise Business
• Register for taxes and getting a Tax Identification Number (NIF)
• Recruit and hire employees, ensuring your follow local employment regulations
• Set up financial and accounting systems
• Take out relevant business insurance

You may want to work with an international business consultant and/or a global company formation provider.

A specialist with knowledge of Spain can help you navigate the process and understand the specific requirements for establishing a business there.

💡 See our full guide to full guide to starting a business in Spain 🇪🇸

Which cities and areas in Spain are best for businesses?

The part of Spain you choose to start your business in will largely depend on your market research, as you’ll want to go where there are the most opportunities and demand for your product or service. You may also have connections to a particular city, or already sell there.

But generally speaking, some cities and areas in Spain are more attractive for UK-owned startups than others. Let’s take a look.

Madrid

The cosmopolitan Spanish capital is the economic heart of the country, with an advanced business and entrepreneurial ecosystem. Madrid is also known as one of the most attractive European cities for tech startups.

Its many attractions for startups include the following:

• Home to leading universities and educational centres, including some of the world’s most prestigious business schools
• Access to world-class business infrastructure, from co-working spaces to transportation links
• Hotspot for venture capital (VC) funding
• Home to tech incubators, accelerators and venture funds, including the Madrid Food Innovation Hub, Madrid Startup House and Wayra.

Barcelona

Another of Europe’s most vibrant startup hubs, culture-rich Barcelona has produced many of the country’s most successful unicorns - including Glovo, Wallbox and Letgo.

The city is popular with startups and established businesses for many reasons, including the following:

• A hub for blockchain technologies, smart cities, mobile applications and e-commerce
• Headquarters of major multinational companies such as Amazon, Meta, Google and Nestlé
• Strong transport and international trading links
• Thriving entrepreneurial ecosystem, with a calendar packed with major events such as Mobile World Congress and Smart City Expo.

Valencia

While Barcelona and Madrid are well-known business and economic hotspots, smaller cities such as Valencia are also starting to attract attention. Valencia offers an ideal environment for startups, as well as companies looking to expand. This is due to factors such as:

• Lower cost of living and business costs compared to Madrid and Barcelona
• Excellent transport links, including a high-speed rail line direct to Madrid
• A growing community of innovative startups and collaborative entrepreneurs, backed by a network of incubators, accelerators, and coworking spaces
• Host to startup events, conferences and meetups throughout the year

Business etiquette and culture in Spain

One of the hardest things to adjust to as a UK entrepreneur expanding to a foreign market is the difference in culture - both inside and outside of the business world.

In many cases, you’ll find the business landscape in Spain similar to the UK. But there are a few differences, such as the importance of building strong personal relationships in order to work together. Punctuality is shall we say, ‘flexible’, in Spain, and you should expect a greater level of physical closeness and expressive communication than you may be used to back in the UK.

However, local etiquette and culture does vary between regions, so you’ll need to do your research carefully, to make sure you understand all the nuances.

Tips for doing business in Spain

• Do as much research as you possibly can - into local culture and etiquette, as well as business opportunities and target customers.
• Get expert advice from specialists in the region you’re targeting - this includes legal and tax advice, and support navigating local bureaucratic processes.
• You’re likely to need a local bank account or digital bank from the start
• Familiarise yourself with company registration and legal structures in Spain so you can choose the most appropriate one for your new business.

Grow your business in Spain with Wise Business

Having a local corporate bank account may be an essential for starting a company overseas, though this can often be challenging to set up as a non-resident. You can use Wise Business to help grow your business in Spain right from the jump.

Open a Wise Business account and you can manage your company’s finances in 40+ currencies all in one place, including EUR, GBP, USD and all other major currencies. You’ll be able to pay suppliers and staff in euros, as well as receiving payments in multiple currencies.

Wise payments are fast and secure (even for large amounts). Best of all, you’ll only pay low, transparent fees and always get the mid-market exchange rate.

With Wise Business, you’ll also benefit from the following features:

• Issue business debit and expense cards for you and your team
• Cashback on eligible card spending
• Generate invoices and payment links to receive money easily from customers
• Access accounting integrations, batch payments and a powerful API
• Wise Interest - which lets you earn returns on money held in GBP, USD and EUR. Capital at risk. Growth not guaranteed. Wise Assets UK Ltd is authorised and regulated by the Financial Conduct Authority with registration number 839689. When facilitating access to Wise investment products, Wise Payments Ltd acts as an Introducer Appointed Representative of Wise Assets UK Ltd. Please be aware that we do not offer investment advice, and you may be liable for taxes on any earnings. If you’re uncertain, we urge you to seek professional advice. To find out more about the Funds, visit our website.

It’s quick and easy to open a Wise Business account in Spain, with a fully digital application, verification and on-boarding process. Check out the requirements here.

Wise works almost everywhere, and you can also open an account in other European countries such as Germany, Portugal, Ireland, France, Switzerland, Hungary and Poland.

Register with Wise Business🚀

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Sources used:

1. Worldometer - Spain Population
2. Velocity Global - A Guide to European Expansion: Best Practices & Tips
3. Emerald Technology - Doing Business in Spain: Opportunities and Challenges
4. Euronews - Labour costs across Europe: Where are they highest and lowest?
5. Eurostat - Which regions have the most highly-skilled employed people?
6. Wolters Kluwer - Doing business in Spain: Advantages and risks
7. Eurostat - Unemployment by sex and age - monthly data
8. Euronews - Which EU countries are the best and worst at speaking English?

Sources last checked on date: 12-Aug-2025