Foreign business activity in Spain through a startup
Spain has seen a significant increase in business related immigration, especially from foreign entrepreneurs who see a clear opportunity to create their business here in Spain. They are driven by the success that digital companies born out of small innovate projects (known as startups) had in recent years. This new knowledge–based economy is an important element for economic growth and prosperity, as it is based on highly valued activities and at the same time promotes research, development, and innovation within Spain.
In 2022, investment in Startups in Spain has been maintained despite the difficulties within the international economic environment. The volume of venture capital injected into startups is the second highest in history and the number of transactions has set its records to date with a total of 424 investment transactions.
In Spain there are currently approximately 11,000 active startups operating, which positions the country’s big startup hubs, Barcelona, and Madrid, within the top 6 cities with the best startup ecosystem in Europe, together with other huge hubs like London, Paris, Berlin, and Dublin.
Further opportunities for foreign entrepreneurship under the new Spanish Startup Law
In order to strengthen this incipient ecosystem and to further encourage the creation of startups in Spain, the Spanish Government has recently passed a new Startup Law, placing Spain at the forefront of EU to attract investment, innovative entrepreneurship and talent.
The law, which has come into effect on January 1, 2023, introduces a series of concrete administrative, tax, civil, and commercial related measures adapted to the unique nature of startups. The Startup Law aims to support startups throughout their life cycle and especially in early stages. Besides great tax benefits and a facilitation of the procedures for setting up new businesses in Spain, the new Spanish Startup Law also contains important measures related to the Spanish immigration process.
What ‘s considered an entrepreneurial profile and activity under Spanish Immigration law?
To be able to apply for a residence permit for entrepreneurs, a series of requirements must be met:
- An entrepreneurial activity will be understood as that which is innovative and/or of special economic interest for Spain.
- An innovative activity is considered a business that creates or modifies a product and introduce it to the market.
- As sectors that are of special interest to Spain, the following ones are taken into consideration: renewable energies, ICT, life sciences, agri-food, automotive and mobility, aerospace, transportation and logistics, audio-visual industry and chemical industry.
- The profile of the applicant, his/her professional experience and involvement in the project will also be valuated to determine the entrepreneurship.
- It’s also important to consider that the place where the business and investment is made will be relevant in terms of how high an impact it could have in the creation of jobs (it’s not the same to create a business in a big city such as Barcelona, Valencia o Madrid or in a little town, where the impact to the local economy would be considerably higher).
What is the process to obtain the Entrepreneur Residence in Spain?
Who can apply for the residence permit for entrepreneurs and from where can the application process be started?
The process can either be started from Spain (tourist legal status) or from the origin country of the entrepreneur (through the Spanish Consulate). The application will be addressed electronically to the UGE (immigration office in charge of this process) and it must include the following documentation that will evaluate the foreigner as entrepreneur:
- Professional profile of the applicant: Detailed information on the applicant’s training and professional experience, as well as their involvement in the project.
- Business Plan: To be valid, the business plan must at least contain a detailed description of the project (business activity, start date, location, number of jobs estimated to be created, etc.), detailed description of the product or services and in which way they are innovative and of added value to the Spanish economy, a market assessment, and a financial plan.
This business-related documentation must be presented together with the compilation of the usual residency documentation itself: passport, criminal records, sufficient economic means, health insurance, etc.
What are the deadlines for processing the entrepreneur residency applications?
By submitting the file, the process will approximately be solved within 1-2 months (the law indicates a processing time of 10 working days for the evaluation of the entrepreneurship and 20 working days for the rest of documentation).
With the approval of the Entrepreneurship (through a favourable report issued by ENISA -name of the administration in charge of this evaluations-) the UGE (immigration office) will be processing and solving the residence permit of the foreigner. If both are favourable the foreigner will be allowed to start the business in Spain.
Characteristics of the Spanish Residence Permit for Entrepreneurs
All non-EU nationals planning to start an innovative business of particular interest for the Spanish economy, can take advantage of Spain’s special migration scheme for entrepreneurs.
How long does the Spanish Entrepreneur Residence Permit last?
The residence permit for entrepreneurs will be initially valid for 3 years with the possibility to renew it for periodical 2 years until achieving the long-term residence (5 years in total).
Can direct family members also benefit from this permit?
Relatives (wife/spouse, domestic partnership, children minor age, major age dependents and ascendents dependents) can also apply for a residence permit incorporating a work authorization for those that meet the expected age labour regulations.
Who can apply for the Spanish nationality and under which time frame?
Nationals of those countries with a nationality agreement with Spain will be allowed apply for Spanish nationality after two years of continuous residence in Spain: Argentina, Andorra, Bolivia, Brazil, Colombia, Costa Rica, Cuba, Chile, Ecuador, Equatorial Guinea, El Salvador, Guatemala, Honduras, México, Nicaragua, Panama, Paraguay, Peru, Philippines, Dominican Republic, Uruguay, Venezuela).
AGM Abogados Immigration team has extensive experience in the processing of residence permits. If you need our help, feel free to contact AGM Abogados.
Marc Fernández de la Peña
Head of Immigration Department