Autónomo or Sociedad Limitada (S.L.)?
One of the first decisions when starting a business in Spain is whether to operate as an Autónomo (self-employed) or establish a Sociedad Limitada (S.L.).
Autónomo:
Pros:
Easy registration – You can start your business in just a few days.
Low initial costs – No minimum capital required.
More flexibility in business management.
Cons:
Unlimited liability – The owner is personally responsible for business debts.
Progressive taxation – Taxes increase as income grows.
Sociedad Limitada (S.L.):
Pros:
Limited liability – Protects the personal assets of shareholders.
Increased credibility – Ideal for working with companies and institutions.
Fixed corporate tax rate of 25%, which may be more advantageous than Autónomo taxation.
Cons:
Higher initial costs – A minimum share capital of €3,000 is required.
More administrative obligations – More complex accounting and mandatory financial statements.
