Company vs. Autónomo: Which is better for doing business in Spain?

If there is more than one shareholder and it is necessary to fix the ownership interest, there is no alternative to a company. However, if there is only one owner, there are options available, explains accredited tax adviser in Spain, Natalia Malysheva.

1️⃣ Liability
An Autónomo is liable with all its assets for professional debts, which can only be partially secured. However, it is possible to make an Autónomo with limited liability by registering it with the ERL (Emprendedores de Responsabilidad Limitada) register. In the case of company founders, liability is limited to the authorized capital. The director of the company is liable with all their personal assets for the company's debts to third parties and to the founders if they prove poor performance.

2️⃣ Opening fees
For an Autónomo, the opening fees range from free up to 100 euros. On the other hand, for an SL, the average cost of opening is between €1,000 and €1,200. This includes the cost of the company name certificate, the state fee to the Registro Mercantil, and notary services.

3️⃣ Opening times
An Autónomo can be opened in just one day, whereas an SL takes approximately 2-3 weeks to open. The process can be sped up if you choose not to name the company yourself.

4️⃣ Authorized capital
An Autónomo does not require authorized capital, but for an SL, the minimum authorized capital required under the new legislation ( is €1. However, it still needs to be brought up to at least €3,000. It is possible to incorporate some equipment, including a computer, into the articles of association.

5️⃣ Taxation
A company has to pay IVA (VAT) at 4, 10, or 21%, and IS (corporate income tax) at 15% for the first 2 years, and 25% for the following years. The tax on dividends ranges from 19% to 26%. An Autónomo has to pay IVA (VAT) at 4, 10, or 21% and IRPF (personal income tax) ranging from 19% to 47% (progressive scale, the higher the income, the higher the taxes). Both Autónomos and companies have to make contributions to the Seguridad Social, but new Autónomos and Company Administrators can benefit from a preferential rate called Tarifa Plana for the first 2 years.
For a company, it is possible to write off some costs that are impossible (or very difficult) to write off for an Autónomo. However, the burden of proof is on the taxpayer and is often not accepted. Income earned in a company can be spent on personal expenses but still include these costs in the income tax expense, such as depreciation (gradual cost transfer) on a car purchased for the company.

6️⃣ Accounting
An SL has the added obligation of filing annual Cuentos Anuales invoices with the Registro Mercantil, which leads to a correspondingly higher cost of accounting services. Based on the statistics of my audits, tax authorities pay less attention to SL.

7️⃣ Types of business
Both forms have no restrictions on types of activities. Some companies are allowed a simplified income tax system (IRPF) and more favorable taxation, such as in beauty and aesthetics.