Spain’s manufacturing sector is a cornerstone of its economy, contributing 13.49% to the nation’s GDP in 2023-24. The country’s strategic location, skilled workforce, and robust infrastructure make it an attractive destination for manufacturing ventures. Expanding your manufacturing business into Spain not only provides access to the European Union’s vast market but also offers a favorable environment for growth and innovation.
Do you want to establish a subsidiary of your parent company in Spain?
How to set up a manufacturing business in Spain?
To set up your manufacturing business in Spain, you need to follow the given steps:
1. Obtain a Foreigner Identification Number (NIE): This tax identification number is essential for all financial and legal transactions in Spain. You can apply for an NIE at a Spanish consulate in your home country or at the immigration office in Spain.
2. Choose a Legal Structure: Spain offers various business structures, including:
- Sole Proprietorship (Autónomo): Ideal for individual entrepreneurs, though it entails personal liability.
- Limited Liability Company (Sociedad Limitada or SL): Requires a minimum share capital of €3,000 and is suitable for small to medium-sized enterprises.
- Public Limited Company (Sociedad Anónima or SA): Requires a minimum share capital of €60,000 and is designed for larger businesses.
3. Register the Company Name: Submit your chosen company name to the Central Commercial Registry to obtain a Certificate of Uniqueness, ensuring no other business operates under the same name.
4. Open a Business Bank Account: Deposit the required share capital into a Spanish bank account to obtain a bank certificate, which is necessary for company incorporation.
5. Draft and Notarize the Articles of Incorporation: This document outlines the company’s bylaws, including the director’s details, shareholder information, company address, and business activities. A notary public must witness the signing of this document.
6. Register with Tax Authorities and Social Security: Obtain a Tax Identification Number (NIF) from the Spanish tax office and register the company with the Social Security system to ensure compliance with tax and labor regulations.
Major manufacturing industries in Spain
Spain’s manufacturing landscape is diverse, with key industries including:
- Automotive: Spain is the second-largest car manufacturer in Europe, producing 2.45 million vehicles in 2023. The sector employs approximately 229,600 people as of 2023.
- Machinery and Equipment: This sector contributes 4% to the manufacturing output, focusing on industrial machinery and equipment.
- Pharmaceuticals: Representing 6% of manufacturing output, the pharmaceutical sector is integral to Spain’s industrial landscape.
- Food and Beverages: Accounting for 12% of total manufacturing production, this industry is a significant contributor to the economy.
- Chemicals and Plastics: The primary plastics manufacturing market was valued at €8.5 billion in 2023, reflecting a 4.4% year-over-year growth.
- Textiles and Apparel: Home to global brands, Spain’s textile industry is renowned for its quality and design.
Scaling of manufacturing industries in Spain
Spain’s manufacturing sector has demonstrated resilience and growth:
- Economic Contribution: Manufacturing output reached $181.59 billion in 2023, marking a 12.3% increase from the previous year.
- Employment Growth: The automotive manufacturing industry saw an increase of approximately 11,400 employees in 2023 compared to 2022.
- Industrial Production: As of October 2024, industrial production rose by 1.9% year-on-year, indicating a strong recovery and expansion in manufacturing activities.
Business opportunities for manufacturing industries in Europe
Expanding into Spain opens doors to broader European markets:
- Strategic Access: Spain serves as a gateway to the European Union, providing seamless access to a market of over 447 million consumers.
- EU Membership: As an EU member, Spain offers businesses access to a single market of over 450 million consumers, with harmonized regulations and standards.
- Trade Agreements: As an EU member, Spain benefits from numerous trade agreements, facilitating easier export and import activities.
- Innovation and Technology: Spain’s commitment to innovation, particularly in renewable energy and advanced manufacturing, offers opportunities for businesses to integrate advanced technologies.
Conclusion
Expanding your manufacturing business into Spain presents a strategic opportunity to tap into a dynamic and growing market. With a clear understanding of the setup process, awareness of key industries, and recognition of the scaling potential within Spain and Europe, your business can thrive in this vibrant environment. Take the next step towards growth and innovation by establishing your manufacturing presence in Spain today.
If you are planning to expand your manufacturing business in Spain, schedule your consultation call with our Spanish incorporation expert today.
