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At Spain’s Door, a Welcome Mat for Entrepreneurs

nytimes.com

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Re: At Spain’s Door, a Welcome Mat for Entrepreneurs

#21

Post by netcan »

eps wrote: post #13
gyardley wrote: post #12

Moving to and living in a foreign country is a really great learning experience, but don't kid yourself - the sheer amount of bureaucracy involved in these entrepreneur-importing schemes plus the overhead of adapting to a new culture make them a net negative for any business you're starting. Go if you want the adventure, but if you're really passionate about something you're working on, I'd recommend staying in place…

Bureaucracy can be dealt with by hiring a specialist legal firm. It sounds really expensive, but in many cases it's not - it's in 10-20K range, which is comparable to what it costs to move an established household from US/Canada to Europe. One can of course sell everything, move with just a backpack and do it frugally by trying to deal with all the formalities themselves, but that's certainly is taxing if you are ove…

That's exactly the kind of approach that inhibits entrepreneurship. It's very hard to see hurdles which kill non existent companies by preventing them from ever happening. There are big risky steps that happen before it feels real. The easier these steps are, the more likely it is that people take them.

Red tape that would not be more than an annoyance to an existing company kills off new companies. Maybe to an individual with decades of entrepreneurship 10-20k for a lawyer to handle stuff and make decisions about things he doesn't understand is fine, but to an average joe thinking about starting a business that represents a year or more of savings.

Re: At Spain’s Door, a Welcome Mat for Entrepreneurs

#22

Post by joeyspn »

carlesfe wrote: post #14

Spain is like phone companies: a welcome mat for outsiders, a nightmare for insiders. Spanish companies can't have anybody working (i.e. 'dormant' state), they always need an "administrador" who pays a monthly 300€ self-employment tax. This kills companies in early stages unless they can break even quickly (3600€/yr while not having any income, plus maintentance expenses, is terrible) Creating a company is bureaucrat…

Not negative at all. It is actually quite accurate. I started up in Spain 5 years ago and was the worst decision ever. Never again.

For several reasons our venture failed and I was stuck with hundreds of thousands of € in debt w/o any protection, with me and my co-founders scared of losing our homes, and severely affecting our personal lives.

Spanish gov is specialist in showing a big smile in the pics that appear in the press, but the evil is in the details. When things go wrong you're alone. There's not legal protection for failed startuppers. Starting up in Spain w/o resources is extremely difficult, and can really mess up your life forever.

Looking back, I wish I had started with a LTD in UK, and working from Spain (yes, you can). It's what I'm doing next.

My 0.02

Re: At Spain’s Door, a Welcome Mat for Entrepreneurs

#23

Post by slapresta »

carlesfe wrote: post #14

Spain is like phone companies: a welcome mat for outsiders, a nightmare for insiders. Spanish companies can't have anybody working (i.e. 'dormant' state), they always need an "administrador" who pays a monthly 300€ self-employment tax. This kills companies in early stages unless they can break even quickly (3600€/yr while not having any income, plus maintentance expenses, is terrible) Creating a company is bureaucrat…

Spaniard here. While I've never started a company, this resonates pretty strongly with my experience as a freelancer. In order to be an autonomous worker, you must pay 250€ a month. On top of the 21% VAT and the 16% IRPF taxes, of course, and without even having any income. According to the law, you only need to register as an autonomous worker and pay the tax if you expect to do this "regularly and as a way of living", but how this actually translates to your income was never written into law, which means you have to fight the state for it in court.

Luckily for me, I was under 30 when I did this, which means I got an 80% discount on the 250€ tax for six months. After that, the discount got reduced to 50%. Similarly, the 16% tax was on "super-reduced mode", which meant it was only a 7% tax.

Relating to the state in Spain in a non-trivial way seems to always be about navigating this ridiculous, expensive legalese maze. Don't ask me how was I supposed to fill my taxes with the autonomous community I lived on, because I still don't have a clue. Crossing my fingers and hoping they never ask for their money.

Re: At Spain’s Door, a Welcome Mat for Entrepreneurs

#24

Post by [deleted] »

slapresta wrote: post #23
carlesfe wrote: post #14

Spain is like phone companies: a welcome mat for outsiders, a nightmare for insiders. Spanish companies can't have anybody working (i.e. 'dormant' state), they always need an "administrador" who pays a monthly 300€ self-employment tax. This kills companies in early stages unless they can break even quickly (3600€/yr while not having any income, plus maintentance expenses, is terrible) Creating a company is bureaucrat…

Spaniard here. While I've never started a company, this resonates pretty strongly with my experience as a freelancer. In order to be an autonomous worker, you must pay 250€ a month. On top of the 21% VAT and the 16% IRPF taxes, of course, and without even having any income. According to the law, you only need to register as an autonomous worker and pay the tax if you expect to do this "regularly and as a way of livin…

[deleted]

Re: At Spain’s Door, a Welcome Mat for Entrepreneurs

#25

Post by scalesolved »

joeyspn wrote: post #22
carlesfe wrote: post #14

Spain is like phone companies: a welcome mat for outsiders, a nightmare for insiders. Spanish companies can't have anybody working (i.e. 'dormant' state), they always need an "administrador" who pays a monthly 300€ self-employment tax. This kills companies in early stages unless they can break even quickly (3600€/yr while not having any income, plus maintentance expenses, is terrible) Creating a company is bureaucrat…

Not negative at all. It is actually quite accurate. I started up in Spain 5 years ago and was the worst decision ever. Never again. For several reasons our venture failed and I was stuck with hundreds of thousands of € in debt w/o any protection, with me and my co-founders scared of losing our homes, and severely affecting our personal lives. Spanish gov is specialist in showing a big smile in the pics that appear in…

How would the tax situation work with having a LTD in the UK and residing in Spain?

Re: At Spain’s Door, a Welcome Mat for Entrepreneurs

#26

Post by fasteo »

joeyspn wrote: post #22
carlesfe wrote: post #14

Spain is like phone companies: a welcome mat for outsiders, a nightmare for insiders. Spanish companies can't have anybody working (i.e. 'dormant' state), they always need an "administrador" who pays a monthly 300€ self-employment tax. This kills companies in early stages unless they can break even quickly (3600€/yr while not having any income, plus maintentance expenses, is terrible) Creating a company is bureaucrat…

Not negative at all. It is actually quite accurate. I started up in Spain 5 years ago and was the worst decision ever. Never again. For several reasons our venture failed and I was stuck with hundreds of thousands of € in debt w/o any protection, with me and my co-founders scared of losing our homes, and severely affecting our personal lives. Spanish gov is specialist in showing a big smile in the pics that appear in…

Yes, you can, but it doesn´t make things better. You will have to pay taxes in Spain if any of these conditions apply:

1) You operate the company from Spain, i.e., having an UK address is not enough.

2) Less than 15% of your revenue comes from customers outside of Spain.

Re: At Spain’s Door, a Welcome Mat for Entrepreneurs

#27

Post by endzone »

fauigerzigerk wrote: post #19
lucaspiller wrote: post #18

Earlier quoted context omitted.

> Granted, you can get the same in the UK for almost nothing until you actually make money You don't have to pay any National Insurance contributions (employer or employee) until your salary is above £153 per week. Although that's below the minimum wage for full time employees, as a director you can pay yourself what you want.

That's right, and on top of that you can create a limited company for a tiny fee with zero minimum capital requirements. The UK is pretty much ideal in that regard. However, there is only one place in the UK for starting a startup and that place is London. Rent alone will cost you several times your Spanish social security contributions.

startups can only work in london? what a bizarre claim

Re: At Spain’s Door, a Welcome Mat for Entrepreneurs

#28

Post by Symbiote »

fauigerzigerk wrote: post #19
lucaspiller wrote: post #18

Earlier quoted context omitted.

> Granted, you can get the same in the UK for almost nothing until you actually make money You don't have to pay any National Insurance contributions (employer or employee) until your salary is above £153 per week. Although that's below the minimum wage for full time employees, as a director you can pay yourself what you want.

That's right, and on top of that you can create a limited company for a tiny fee with zero minimum capital requirements. The UK is pretty much ideal in that regard. However, there is only one place in the UK for starting a startup and that place is London. Rent alone will cost you several times your Spanish social security contributions.

> However, there is only one place in the UK for starting a startup and that place is London.

But it's a small-ish country, with decent transport connections. Why not Manchester, with trains every 20 minutes to London when needed? [1] Or Bristol [2]. Cambridge has had startups for ages.

[1] http://traintimes.org.uk/london/manchester [2] http://www.theguardian.com/technology/2014/jan/12/bristol-ba...

Re: At Spain’s Door, a Welcome Mat for Entrepreneurs

#29

Post by Symbiote »

danielrhodes wrote: post #8

I recall reading an article a few years ago where an entrepreneur was sued by the Spanish government after his company went under. Spain is, as is the rest of Europe, quite hostile to entrepreneurship. It seems like Spain is trying to attract people from outside rather than deal with the problems inside. If they could make it super easy to start a company, relax red tape for businesses under a certain size, and encou…

If you would like to register a business in the UK, go here: https://www.gov.uk/register-a-company-online

It says it takes 48 hours and costs £15. You must be at least 16, and you'll need an address -- it could be a rented post box so long as it's a full address.

As far as I can see, you don't need to be resident in the UK.

Re: At Spain’s Door, a Welcome Mat for Entrepreneurs

#30

Post by dasil003 »

endzone wrote: post #27
fauigerzigerk wrote: post #19

Earlier quoted context omitted.

That's right, and on top of that you can create a limited company for a tiny fee with zero minimum capital requirements. The UK is pretty much ideal in that regard. However, there is only one place in the UK for starting a startup and that place is London. Rent alone will cost you several times your Spanish social security contributions.

startups can only work in london? what a bizarre claim

Especially when we're talking about €300 / month being a high premium for a startup to pay, because the premium for one person to live in London is way way higher.
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