Operating a Business

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In this page: Legal Forms of Companies | The Active Population in Figures | Working Conditions | The Cost of Labour | Management of Human Resources

 

Legal Forms of Companies

Sociedad de Responsabilidad Limitada or S.R.L. (limited liability company)
Number of partners: Minimum 1 partner.
Capital (max/min): 3,000 EUR minimum fully subscribed and paid upfront.
Shareholders and liability: Responsibility limited to the contribution amount.
Sociedad Anonima or S.A. (limited company)
Number of partners: Minimum 1 partner.
Capital (max/min): 60,000 EUR minimum, fully paid up minimum up to 25% of the total constituted amount.
Shareholders and liability: Responsibility limited to the contribution amount.
Sociedad Colectiva (company in a group's name)
Number of partners: Minimum 2 partners.
Capital (max/min): No minimum capital.
Shareholders and liability: Liability is joint and several and unlimited towards third parties.
Sociedad comenditaria (Limited partnership company)
Number of partners: Minimum 2 partners. There are 2 types of partners, general partners and limited liability partners.
Capital (max/min): No minimum capital.
Shareholders and liability: Unlimited liability for general partners; liability limited to the contribution amount for the limited liability partners.
Company Directories
Register of Spanish companies, in Spanish
 

Business Setup Procedures

Setting Up a Company Spain OECD
Procedures (number) 7.00 5.21
Time (days) 12.50 9.47

Source: Doing Business - Latest available data.

 
For Further Information
Consult Doing Business Website, to know about procedures to start a Business in Spain.
Central Trade Register
Crear-empresas
The Competent Organisation
National Trade Register
 

Recovery Procedures

Principle
Spain has a fair and transparent bankruptcy regime. Bankruptcy proceedings are governed by the Bankruptcy Law of 2003 that entered into force on September 1, 2004. It applies to individuals and companies. The main aim of this law is to ensure the collection of debts by creditors, to promote consensus between the parties and, if possible, to enable the survival and continuity of the company. Since 2002, the Spanish Government has simplified bankruptcy:
- Instead of suspension of payments, the company is « put up for sale by auction » under the control of an official receiver. It can then either suspend or not its business,
- if no solution of recovery or renegotiation of the debt is found the company is declared bankrupt and its assets liquidated to pay the creditors partly.
Minimum Debt-to-Capital Ratio Triggering Liquidation
All the unpaid debts (salaries, social security, suppliers, etc.) outstanding for more than 6 months can lead to the initiation of the process for liquidation of the company.
Bankruptcy Laws
"Ley Concursal" 22/2003 of July 9, 2003.

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The Active Population in Figures

201820192020
Labour Force 23,065,83623,227,68322,799,921

Source: International Labour Organization, ILOSTAT database

 
201720182019
Total activity rate 74.16%74.06%74.17%
Men activity rate 79.25%79.21%79.05%
Women activity rate 69.02%68.85%69.24%

Source: International Labour Organization, ILOSTAT database

 
Employed Persons, by Occupation (% of Total Labour Force) 2015
Wholesale and retail trade; repair of motor vehicles and motorcycles 16.3%
Manufacturing 12.5%
Accommodation and food service activities 8.4%
Human health and social work activities 8.1%
Public administration and defence; compulsory social security 7.4%
Education 6.6%
Construction 6.0%
Administrative and support service activities 5.2%
Professional, scientific and technical activities 5.0%
Transportation and storage 4.9%
Agriculture, forestry and fishing 4.1%
Information and communication 3.0%
Financial and insurance activities 2.5%
Arts, entertainment and recreation 2.0%
Water supply; sewerage, waste management and remediation activities 0.7%
Real estate activities 0.6%
Electricity, gas, steam and air conditioning supply 0.5%
Mining and quarrying 0.2%
 

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Working Conditions

Opening Hours
 
  • Legal Weekly Duration
40 hours
  • Maximum Duration

Must not exceed 9 hours per day except if agreed by joint convention or between the company and the union representatives. Additional hours should not exceed 80 hours per year. 40 hours per week average over the year

  • Night Hours
Between 10 pm and 6 am.
Working Rest Day
1.5 uninterrupted days per week (Sunday and Saturday afternoon or Monday morning).
Paid Annual Vacation
30 working days per year of service
Retirement Age
65 or 64 years. In January 2011, a pension reform was introduced, increasing the legal retirement age from 65 to 67 over a 15-year period beginning in 2013.
Child Labour and Minimum Age For Employment
End of compulsory schooling or 15 years
Informal Labour Market
3% according to the Euro barometer
15% according to some estimations

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The Cost of Labour

Pay

Minimum Wage
In 2022, the interprofessional minimum wage in Spain was 1,000 euros per month, or 33.3 euros per day (SEPE).
Average Wage
In 2020, the average annual salary was USD 37,922 (OECD).
Other Forms of Pay
  • Pay For Overtime
Depends on the collective convention of the sector.
  • Pay For Rest Days Worked
Depends on the collective convention of the sector.
  • Pay For Night Hours
Depends on the collective convention of the sector.
  • Pay For Overtime at Night

Working overtime at night is not permitted.

 

Social Security Costs

The Areas Covered
Old age, disability and survivors, sickess and maternity, work injury, unemployment and family benefits. Refer to the ISSA site for more details. 
Contributions
Contributions Paid By the Employer: As of January 2022, the employer contribution is 29.9% for general contingencies, plus a variable rate for occupational accidents (e.g. 1.5% for office work).
Contributions Paid By the Employee: The general contribution rates as of January 2022 are 6.35% for employees. 
Competent Organization
Ministry of Social Security and Employment

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Management of Human Resources

 

Recruitment

Method of Recruitment
The application package sent must contain a CV and references; a cover letter (carta de presentación) is not always asked. Internet is used more and more; however in some regions, the companies prefer the candidate to directly introduce himself on the spot and submit his application. The recruitment method is face-to-face interview.
Recruitment Agencies
The INEM is the official employment agency.
Recruitment agencies (Michael Page),  and temping agencies (Kelly Services),  are present and help people find jobs. The regions also have a help service to help find a job.
Recruitment Websites
InfoJobs.net (in Spanish)
CBJobs España
Infoempleo.com
Monster
 

The Contract

Type of Contract
The labor contract can be written or oral; for an indefinite period or for a defined duration, training contract, relief contract, termporary contract for work or defined assignment.
For further information, please visit the website of INEM.

Breach of Contracts

  • Retirement
Retirement age is 65 or 64 years (full rate) or minimum 15 years contribution to Social Security (proportional rate). There is also a partial retirement which enables the retired person to leave and for a young or unemployed person to take his place by training him ("contrato de relevo", relief contract). In January 2011, a pension reform was introduced, increasing the legal retirement age from 65 to 67 over a 15-year period beginning in 2013.
  • Dismissals
The different types of dismissals/ layoffs: force majeure, mass layoff for economic, technical, organizational or production related motives , serious mistake or objective causes.
  • Other Possible Methods
Resignation, non-fulfillment of the contract by the employer, mutual agreement, contract clauses, end of duration of the contract or execution of work or services of the contract, death, retirement, invalidity, complete and permanent incapacity of the worker or employer.
Labour Laws
Labor laws
Consult Doing Business Website, to obtain a summary of the labor regulations that apply to local entreprises.
 

Dispute Settlement

 

Conciliation Process

Cases of Dispute
Working conditions, harassment, discrimination, laying off, not respecting labor contract, etc.
  • Legal Framework
R.D.LG. 2/95 (in Spanish), Ley 22/03, Ley 45/02, R.D.LG. 1/95, L.O. 1/04, L.O. 3/07.
  • Procedure
Each Autonomous Community has developed its own legislation in this matter. A company established in several Autonomous Communities is subject to the regulations of the State. A request for arbitration must be submitted following which the labor authority (Autoridad Laboral) makes an attempt to arbitrate. If an agreement is not reached, the worker must file a request with the Social Welfare Tribunal which will take a decision.
 

Judicial Structures

  • Legal Framework
Ley Organica 6/1985, de 1 de julio
  • Competent Legal Body
Juzgados de lo social (Social Affairs Tribunal)
 

Social Partners

Social Dialogue and Involvement of Social Partners
There are about forty trade unions (general or regional) and a large number of sector-based / regional unions (gremios). Collective bargaining is widespread in both the private and public sectors. The Constitution guarantees the right to strike, and this right has been interpreted to include the right to call general strikes to protest government policy.
Unionisation Rate
Union membership is low: around 10%. 50% of the working population is covered by collective bargaining agreements.
Unions
National Labor Union
Association of Trade Unions
Workers' Commission
Regulation Bodies
Department of Labor and Social welfare
 
 

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Latest Update: June 2022