How to Start a SaaS Business in Spain?: Steps, Benefits & Costs

Spain, renowned for its vibrant economy and strategic location in Europe, has become a hotspot for Software as a Service (SaaS) businesses. With its thriving startup ecosystem, highly skilled workforce, and supportive government policies, Spain is fast becoming a preferred destination for tech entrepreneurs. 

Whether you are a seasoned business owner or a startup founder looking to start a SaaS business in Spain, the country provides a fertile ground for SaaS companies to thrive. From its advanced infrastructure to favourable taxation policies, every aspect of Spain’s business environment is designed to nurture growth. 

This guide will walk you through why Spain is the ideal location for your SaaS venture, how to register software as a service company in Spain, and the steps required to ensure your business’s success. Let’s explore why expanding to Spain could be the smartest move for your SaaS enterprise.

Why Spain is a Hotspot for SaaS Businesses?

Spain is a desirable location for SaaS companies due to its strong tech environment and digital transformation path. According to the Spanish National Statistics Institute, the country’s IT sector contributes over 4% to its GDP, showcasing significant growth in cloud-based solutions.

Here are some important reasons why Spain stands out:

• Strategic Location: Located at the crossroads of Europe, Africa, and Latin America, Spain offers unparalleled access to diverse markets.
• Tech-Savvy Workforce: Spain boasts a highly skilled labour force, with over 40% of its professionals in the IT sector holding advanced degrees.
• Government Support: Initiatives like the “Digital Spain 2026” plan promote innovation and digitization, creating a conducive environment for SaaS businesses.
• Startup Ecosystem: Spain is home to over 11,000 startups, many of which are in the SaaS domain.

The Growing SaaS Market in Spain: Opportunities and Trends

The SaaS market in Spain is anticipated to expand at a compound annual growth rate (CAGR) of 18% from 2023 to 2030. Industries like healthcare, finance, and e-commerce are driving demand for cloud-based software solutions.

Key trends include:

• Rise of AI-Driven SaaS: AI integration into SaaS solutions is gaining traction, particularly in automation and analytics.
• Remote Work Adoption: The pandemic accelerated the adoption of collaborative SaaS tools.
• Localized Solutions: SaaS providers that cater to Spain’s unique regulatory and cultural needs have a competitive edge.

Requirements to Start a SaaS Business in Spain

Before you register a SaaS company in Spain, understanding the legal system is crucial. Spain’s business laws are designed to attract foreign entrepreneurs but require compliance with specific regulations:

• Tax Registration: Obtain a Tax Identification Number (NIF) from the Spanish Tax Agency.
• Company Name Reservation: Ensure your company name is unique by registering it with the Mercantile Registry.
• Social Security Registration: Mandatory for hiring employees in Spain.
• Data Protection Compliance: Adhere to the General Data Protection Regulation (GDPR) and Spain’s Organic Law on Data Protection.

Business Structures Available in Spain

The legal structure of your SaaS business significantly impacts taxation, liability, and operations.

Here are your options:

Sociedad Limitada (SL)

A Sociedad Limitada in Spain is ideal for small to medium SaaS businesses due to its minimal capital requirement (€3,000).

Sociedad Anónima (SA)

Sociedad Anónima in Spain is suitable for larger enterprises, with a minimum capital requirement of €60,000.

Representative Office

A representative office in Spain is ideal for evaluating the Spanish market without settling on a full-scale company establishment. Entrepreneurs establishing a representative office can apply for the Spain Intra Corporate Transfer Visa, which offers a pathway to temporary residency.

Subsidiary

A Spanish subsidiary operates as an independent legal entity and is ideal for entrepreneurs looking for more autonomy and limited liability.

Branch Office

A branch office in Spain operates as an extension of the parent company and may be a simpler option for businesses looking to maintain direct control from their headquarters.

Steps to Start a SaaS Business in Spain

Follow the steps below to register your SaaS business in Spain:

Step 1: Name Registration: 

Reserve a unique business name with the Central Mercantile Registry to ensure that your company’s identity is protected and compliant with Spanish regulations.

Step 2: Choose a Business Structure: 

Decide on the legal structure of your SaaS business in Spain, such as SL, SA, or a representative office, according to your operational requirements and long-term objectives.

Step 3: Open a Bank Account: 

Establish a corporate bank account to deposit your company’s share capital. This is a prerequisite for completing the incorporation process.

Step 4: Corporate Registration: 

Register your firm with the Commercial Registry (Registro Mercantil). This step legally establishes your SaaS business in Spain and provides the necessary documentation to operate.

Step 5: Tax and Social Security Registration: 

Obtain a Tax Identification Number (NIF) and register for VAT and social security contributions. Compliance with these requirements is mandatory for operating legally in Spain.

Step 6: Obtain Necessary Permits: 

Based on the specific services your SaaS business offers, you might require additional licenses or permits. Make sure that all regulatory requirements are fulfilled to avoid legal complications.

Benefits of Starting a SaaS Business in Spain

Spain offers a plethora of advantages for SaaS entrepreneurs:

1. Access to EU Markets: As a member of the European Union, Spain provides seamless access to a market of over 450 million consumers across 27 countries. This strategic advantage allows SaaS companies to scale operations and increase their clientele effectively.
2. Tax Incentives: The Spanish government actively supports tech startups through various tax benefits. Companies engaged in research and development (R&D) can avail themselves of significant deductions, and there are specific grants available for innovation-driven projects.
3. Thriving Startup Ecosystem: Spain’s collaborative startup culture fosters innovation and provides networking opportunities through events and accelerators.
4. Quality of Life: Spain is known for its top-notch healthcare, education, and cultural diversity, and it offers a good standard of living. Entrepreneurs and their teams can enjoy a balanced work-life experience in a country that values innovation and creativity.