Starting a Business in Bilbao: What You Need to Know

When it comes to starting a business, one of the first steps is deciding on your company’s location. If you’re considering creating a company in Bilbao, you likely have several questions about the types of business structures, the steps to follow, and the advantages of setting up in this city.

In this post, we’ll explain everything you need to know to establish your company in Bilbao, from the most common legal structures to the benefits of this location, which has become a key hub for companies looking to innovate and expand.

 

Advantages of Establishing a Business in Bilbao

Bilbao is one of the main cities in northern Spain and an economic benchmark in the Basque Country. Its strategic location, solid economy, and international connections make it an ideal place to set up a business.

Key advantages of starting a business in Bilbao include:

✅ Strategic Location: Bilbao is well-connected by road, rail, and sea, facilitating national and international trade and logistics.

✅ Business Ecosystem: Bilbao boasts excellent business infrastructure, including technology parks, startup incubators, and innovation centers. Here, you’ll find an active entrepreneurial community and a strong network of contacts.

✅ Access to Talent: The city is home to universities and research centers that provide a steady source of qualified talent, especially in sectors like technology, engineering, and biomedicine.

✅ Quality of Life: Bilbao is known for its high quality of life, offering excellent cultural, leisure, and service options, alongside a privileged natural environment—making it an attractive place to live and work.

✅ Grants and Subsidies: Various government and local initiatives support business creation, offering everything from direct aid to tax incentives for entrepreneurs. So, what tax regime in Bilbao could benefit your company’s incorporation?

 

Tax Benefits in Bizkaia for New Businesses

It’s important to note that tax autonomy and regulatory capacity belong to the province of Bizkaia, not the city of Bilbao. Therefore, all municipalities in the territory offer tax measures that enhance their economic ecosystem and entrepreneurship. Bizkaia’s fiscal attractiveness is especially relevant for newly established emerging companies. The most significant tax benefits include:

Double Taxation Avoidance Treaties:

As in other parts of Spain, these treaties aim to prevent the same income from being taxed in two different jurisdictions. In other words, they allow companies operating internationally to avoid paying taxes in both countries on the same income. Bizkaia’s double taxation treaties foster foreign investment and improve profitability.

Tax Support for R&D&I Activity:

The tax policy enables research, development, and innovation-intensive companies to achieve an effective tax rate of 3%, reducing the amount payable in Corporate Tax.

Loss Compensation from Previous Years:

Companies can offset their tax losses from previous years against future profits. Generally, if a company incurs more expenses than income in a year, it can use those losses to reduce its tax burden in future years. In Bizkaia, businesses can offset up to 50% (and 70% for micro and small companies). This means that if, for example, a company earns €100,000 in a year and has €80,000 in accumulated losses, it will only pay taxes on €50,000. Companies can carry out this compensation for up to 30 years, giving them ample time to take advantage of their losses in future fiscal years.

 

 

Setting Up a Limited Liability Company (LLC) in Bilbao

The Limited Liability Company (LLC) is the most common type of company for small and medium-sized businesses in Bilbao. It is easy to establish, requires a minimum capital of €3,000 (fully paid upon creation), and offers a straightforward and flexible structure.

This type of company has several advantages, such as:

• Limited Liability: Partners are not personally liable; they are only responsible for the capital they contribute to the company.
• Flexibility: It is ideal for small businesses or entrepreneurs seeking a streamlined incorporation process.
• Favorable Tax Regime: The LLC provides a fiscal framework that allows resource optimization and business growth.

 

Steps to Create an LLC in Bilbao

Creating an LLC in Bilbao is a straightforward process, but it requires completing several legal steps. These are the basic steps:

1. Register the Company Name: Obtain a certificate verifying that the company name is not already registered.
2. Open a Bank Account and Deposit the Capital: The minimum capital of €3,000 must be deposited into a bank account in the company’s name.
3. Draft the Company Bylaws: The bylaws are the fundamental documents that govern the operation of the company.
4. Sign the Public Deed: Formalize the LLC incorporation through a public deed before a notary.
5. Register with the Mercantile Registry: Register the company with the Bizkaia Mercantile Registry to acquire full legal status.
6. Obtain the CIF: Apply for the company’s Tax Identification Code.
7. Register with the Tax Office: File the census declaration for starting activity (form 036).

 

✅ Are You Ready to Create Your Company in Bilbao?

If you’ve decided to start your business in Bilbao but don’t know where to begin, don’t worry. At Adlanter, we have the expertise and knowledge to guide you through every step of the process. From drafting the bylaws to registering the company, we handle everything so you can focus on what really matters: growing your business.

Contact us today and request more information with no obligation.