Spain: Operating a Business

Legal Forms of Companies | The Active Population in Figures | Working Conditions | The Cost of Labor | Management of Human Resources

Legal Forms of Companies

Types of Companies and Capital (Max/Min)	Number of Partners/Shareholders and Liability
Sociedad de Responsabilidad Limitada (S.L.), limited liability company. 3,005.06 EUR minimum fully subscribed and fully paid up.	Minimum 1 partner Responsibility limited to the contribution amount.
Sociedad Anonima (S.A.), limited company (Incorporated). 60,101.21 EUR minimum, fully paid up minimum up to 25% of the total constituted amount.	Minimum 1 partner Responsibility limited to the contribution amount.
Sociedad Colectiva, company in a group's name. No minimum capital.	Minimum 2 partners. Liability is joint and several and unlimited towards third parties.
Sociedad comanditaria, mixed liability company (limited partnership) No minimum capital.	There are 2 types of partners, the active partners and the sleeping partners. The responsibility of active partners is unlimited. Responsibility of sleeping partners is limited to their contribution amount.

Enterprises Federation: Spanish Confederation of Organizations of Enterprises
Spanish Confederation of Small to Medium Scale Enterprise
Autonomous Spanish Associations or Confederations
Directorate general of SME policy of the Ministry of Industry, Tourism and Commerce
Directorate General Enterprises and Industries of the European Commission
Search a Company or a Financial Report: Register of Spanish companies, in Spanish

Business Setup Procedures

Setting Up a Company	Spain	OECD
Procedures (number)	10.00	5.60
Time (days)	47.00	13.80

Source: Doing Business.

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

Recovery Procedures

Principle: 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.

The Active Population in Figures

	2010
Labor Force	22,960,000

Source: CIA - The world factbook

	2009	2010
Total activity rate	-	58.60%
Men activity rate	68.50%	-
Women activity rate	49.10%	-

Source: UN - United Nations

Employed Persons, by Occupation (% of Total Labor Force)	2006
Agriculture	4.5%
Industry	15.0%
Construction	12.5%
Commerce	14.6%
HRD	7.1%
Transports	5.6%
Real-estate	9.0%
Administration	5.9%
Education	5.3%

Source: INE

For Further Statistics: Statistics on the labor market from INE
For Further Information About the Labor Market: ILO, International Labor Organization
INEM, Publications of the employment institute
Publications of the Labor Department

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 day 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 Labor and Minimum Age For Employment: End of compulsory schooling or 15 years
Informal Labor Market: 3% according to the Eurobarometer
15% according to some estimations

The Cost of Labor

Pay

Minimum Wage: 20 EUR/day, 600 EUR/month or 8,400 EUR/year
Average Wage: Average monthly gross earnings in Spain is 1,630 EUR.
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: Disease, maternity, occupational accidents, occupational illness, unemployment, continuing education, old age.
Contributions: Contributions Paid By the Employer: 29.9%
Contributions Paid By the Employee: 6.35%
Competent Organization: Social Security

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
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 or refer the labor guide from the Department of Labor and Social Welfare.

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-fulfilment 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.

Labor Laws

Labor laws

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.
Unionization Rate: Union membership is low: around 14%. 60% 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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