What you need to know about doing business in Spain

The Dutch love the Spanish sun and Spanish hospitality, which makes doing business in Spain a pleasant prospect. The economy runs mainly on the tourism and hospitality sectors, which have been hit hard by the corona crisis over the past two years. This crisis is accelerating the growth of sectors such as the bicycle, digital security, automation, greening, and health care industry.

The size of the market, the strong financial sector, and the fact that Spain is the fourth largest economy in the Eurozone mean that many Dutch entrepreneurs are already active in the Spanish market. This article goes into all the business opportunities that Spain has to offer, as well as the rules you will encounter when importing or exporting goods or services.

Bilateral trade

The Netherlands and Spain are important trading partners. The main economic sectors in Spain are tourism, hospitality, and finance. Spain is the EU's second-largest producer of cars after Germany.

According to figures (in Dutch) from Statistics Netherlands (CBS), Dutch entrepreneurs exported goods worth more than €18 billion to Spanish buyers in 2021. In 2020, Dutch exports amounted to €14.4 billion. The main exports going from the Netherlands to Spain are medicinal and pharmaceutical products and electrical appliances.

Figures from CBS (in Dutch) show that Dutch imports from Spain totalled €10 billion in 2021, up from €8.4 billion in 2020. Spain’s biggest exports to the Netherlands are fruit and vegetables, crude oil, and petroleum products.

In the CBS StatLine database, you can track exactly which products are imported and exported into and from the Netherlands. You can even filter imports and exports by country. Use these trade figures in your market research to discover new business opportunities in Spain. For more trends in trade between the Netherlands and Spain (in Dutch), visit the website of RVO.

Promising sectors

With over 47 million inhabitants, Spain is the fourth largest economy in the EU. Although Covid did lead to significant financial pain, the pandemic also accelerated developments that were already underway in fields such as digital security, automation, and greening.

In the coming years, Spain will invest heavily in these sectors by using money from the European Recovery Fund. This presents opportunities for technology and software suppliers.

The Spanish market is also promising for Dutch companies in the bicycle sector or businesses with innovative solutions for e-mobility and water treatment. RVO has a special page with market information (in Dutch) on these and other promising sectors.

Market entrance

In Spain, companies are listed in the Registros Mercantiles. You can request information from Colegio de Registradores for a fee. This will help you tell whether the person you are speaking with is authorised to make decisions.

You might find it easier to land new business if you hire Spanish staff. Other options include bringing in a Spanish commercial agent or distributor, selling goods on a shopping site or opening your own branch (in Dutch). Commercial agents are protected in Spain. They have to be registered with the Association of Spanish Commercial Agents in their place of residence, as well as joining a professional association and registering in the trade register. The Netherlands Enterprise Agency (RVO) has a special page with information about commercial contracts in Spain (in Dutch).

Opening a branch

In Spain, businesses can contact the so-called Puntos de Atención al Emprendedor (PAE) for support. These offices offer online support and can help you digitally register your company, for instance. Decide what type of business you want to set up, such as an eenmanszaak (sole proprietorship) or branch office. Make sure to map out all legal and tax rules for your chosen business, such as VAT rules and local taxes. Depending on your legal form and business activity, you will have to go through several steps (in Dutch) to start a company.

Finding partners

It is customary in Spain to get to know business partners personally before doing business. Visiting and taking part in trade fairs is a good way to gain insight into the Spanish market. They are a great place to meet new people and build a network. Tradeshows Spain and Auma have detailed lists of local (digital) fairs and exhibitions.

Support

There are various organisations that can help you find suitable partners, some of which provide their services for free and some of which charge a fee.

  • The Enterprise Europe Network (EEN) provides access to a professional network of 600 organisations in 70 countries, including Spain. EEN’s digital database contains profiles of Spanish companies looking for partners to cooperate with.
  • RVO can help you find reliable Spanish business partners by tapping into its overseas network, which includes embassies and Netherlands Business Support Offices (NBSOs) abroad. RVO will create a personalised overview of business partners (in Dutch) for you tailored to your needs and wishes. They will also be able to introduce you to potential business partners in person.

Business culture

Food is important in Spain and Spanish people often do business over lunch or dinner. In summer, companies often start early and no work is done in the afternoon. Many businesses close on Friday afternoons and some stay closed throughout August.

There are some regional cultural differences in Spain. People in the north tend to be more serious, while people in the south are more easygoing. In the workplace, you see a certain respect for hierarchy reflected in the way employees treat each other. In the Netherlands, you speak your mind, even to your boss. Spanish people are less likely to do this.

If you do not speak Spanish, bring an interpreter with you to business meetings. Only the younger generation of Spanish people tend to speak English. Have your quotation, website, texts, and brochures translated into Spanish to come across as a serious and professional business. For more do’s and don’ts (in Dutch), visit the RVO Spain page.

Laying down agreements

First, prepare a quotation for your potential Spanish customer. A quotation is a proposal to deliver products. Your potential customer can accept, reject, or renegotiate your quotation. If you reach a deal, lay down all agreements in writing in a contract, including agreements about the price, the payment method, and disputes procedures. Also agree on an Incoterms® rule. This way, both of you will know who is responsible for arranging transportation and who bears the risk of damage to, or loss of, the goods in transit.

The ICC, the International Chamber of Commerce, has several model contracts. Have contracts reviewed by a lawyer who knows the Spanish legal system before you sign them.

Exporting goods

There are no physical borders within the EU and there is free movement of goods. You do not have to submit an export declaration and your customer does not have to pay import duties on your products. If you and your customer both have a valid VAT identification number, you can usually charge 0% VAT. Your Spanish customer will then charge Spanish VAT and remit it to Spanish authorities. If your Spanish customer does not have a VAT ID, you will have to charge them Dutch VAT.

If you export excise goods, your Spanish customer has to pay excise duty (in Dutch). With B2C sales to Spain, however, you are responsible for paying excise duty in Spain. There are different rules on VAT on excise goods. You can find more information about excise products in Spain on the website of the Spanish customs authorities.

Product rules and regulations

The Netherlands and Spain both belong to the EU, so laws and regulations for products are largely the same. However, member states can also impose national rules.

Importing goods

Goods you buy from businesses from other EU countries (in Dutch) are usually subject to Dutch VAT. You do not need an import declaration and will not have to pay import duties. In most cases, your Spanish supplier will send you an invoice with 0% VAT. Calculate how much VAT is due on your purchase and report it in your VAT return.

If you import beer or wine from Spain, you will have to pay Dutch excise duty. These are not the only products (in Dutch) that are subject to excise duty. In the Netherlands, you also have to pay consumption tax (in Dutch) on soft drinks, fruit and vegetable juices, and mineral water imported from Spain.

When importing a passenger car, motorcycle, or van from Spain, you pay BPM tax and VAT (in Dutch). The Dutch tax authorities have a dedicated page on paying VAT on specific imported goods (in Dutch) from other EU countries and in special situations.

European laws and regulations

Products authorised in Spain may also be sold in the Dutch market. The Dutch government is only allowed to ban products if they jeopardise consumer safety or the environment. If you want to sell products in the Netherlands, make sure that you are familiar with the Commodities Act. This deals with consumer products and safety. In the Netherlands, foodstuffs have to be labelled in Dutch. Check out our article on 'Import restrictions and import regulations' to find out which products are subject to additional rules.

It is important to keep product liability in mind. Within the EEA, or European Economic Area, producers are responsible for damage or injury caused by faulty products. This also applies if you purchase products from another EEA country and you attach your own label or brand name to them. You are also liable if you sell imported products from outside the EEA within the EU.

Services

Dutch service providers are allowed to offer their services in Spain. They do not need a work permit or local branch. Services are subject to certain rules.

Mandatory licence

As in the Netherlands, you are not allowed to practice any profession you want without the necessary qualifications in Spain. What you need to arrange depends on how often and for how long you will be performing services in Spain. For certain occupations and activities, such as construction work, you will have to demonstrate your professional competence. Check whether the same goes for your industry. With a KVK-issued EU declaration (in Dutch), you can demonstrate that your Dutch qualifications and your professional competence correspond to the obligations in Spain.

Every EU member state, including Spain, has a Point of Single Contact. You can contact them with questions about local rules for temporary services. The Point of Single Contact also provides information on the recognition of professional qualifications and regulated professions and on starting a local business.

Posting

When an employee is posted in another country, they temporarily work for the same employer and under the same employment contract but in a different country. Employees working in another EU country, such as Spain, are called 'posted workers' and are subject to posting rules. Under these rules, you have to notify local authorities of your activities in advance and appoint a local representative. The Spanish Ministry of Employment and Social Security has a special information page on the Spanish rules for posting.

Posted employees typically have the same terms of employment and rights as other local employees. Your employees are covered by Spanish terms of employment, provided they are more favorable than Dutch terms.

Social security

An A1 certificate of coverage is proof that you have social insurance coverage in the Netherlands. You can request this certificate from the Social Insurance Bank (SVB). With this certificate, you will not have to pay social security contributions in Spain.

Taxes

Whether you have to charge VAT to your Spanish customer depends on the type of customer to whom you provide the service. When providing services to consumers, you usually charge Dutch VAT. If your customer is a business, do not charge VAT and reverse charge it to your customer instead. Your Spanish customer will calculate the VAT and report it locally. Some services are subject to different VAT rules (in Dutch).

If your employee spends more than 183 days working from a Spanish branch in any twelve-month period, you have to pay Spanish income tax, calculated from the first day. This is laid down in the 183-day rule (in Dutch).

A properly completed transport document will also ensure the smooth passage of your goods during police or customs inspections.