Spain has established itself as one of the main gateways to the European market for international entrepreneurs and investors. The startup ecosystem, quality of life and membership of the European Union mean that many business owners residing in the United Arab Emirates are considering setting up a company in Spain without needing to relocate immediately.

With the approval of Law 28/2022, known as the Startups Law, the legal and tax framework has been adapted to promote the creation and growth of emerging companies, especially those with an innovative component and international orientation. Among other measures, the law introduces a reduced 15% corporate income tax rate and non-resident income tax rate for certain startups during their first financial years with a positive tax base.

If you live in the Emirates and wish to set up a company in Spain from abroad, you must combine three key elements. First, the Startups Law; then the process of obtaining the NIE as non-resident investors or directors; and finally solid tax planning that takes into account the double taxation treaty between Spain and the Emirates.

IS SPAIN THE GATEWAY TO EUROPE FOR ENTREPRENEURS FROM THE UNITED ARAB EMIRATES?
Setting up a company in Spain from the Emirates not only opens a new market, but also positions you within the European Union. A Spanish company allows you to operate with legal certainty within the EU environment, access European clients and benefit from Spain’s reputation as a stable destination for investment.

From a tax perspective, relations between Spain and the United Arab Emirates are governed by a double taxation treaty aimed at preventing you from paying tax twice on the same income and at reducing the tax burden on cross-border investment and service activities. This treaty, signed in 2006 and updated in 2022, is a key element when designing the corporate structure and determining the tax residence of shareholders and directors.

The result is that, if you structure your investment properly, you can combine the tax advantages of the Startups Law, the possibilities of the Spanish regime for inbound taxpayers, and the protection offered by the treaty with the Emirates, minimising the risk of double taxation and making your project more efficient.

THE STARTUPS LAW AS A LEGAL FRAMEWORK FOR SETTING UP YOUR COMPANY FROM ABROAD
The Startups Law was created with the aim of fostering the ecosystem of emerging companies in Spain, reducing administrative burdens and providing tax incentives for innovative projects. In broad terms, an emerging company is considered to be one that is recently established, headquartered in Spain, has an innovative business model, meets certain limits on age and turnover, and has not distributed dividends.

For those of you wishing to set up a company in Spain from the Emirates, this law offers several relevant advantages. The best-known is the reduced 15% corporate income tax rate applicable during the first financial years in which the tax base is positive, provided that the company maintains its emerging-company status. This allows you to reinvest more resources in growth, technological development, marketing and international expansion.

In addition, the Startups Law introduces improvements in the tax treatment of stock options, incentives to attract highly qualified talent, and specific regulations for digital nomads and professionals working remotely for foreign companies—an ideal fit for profiles based in the Emirates who want to combine international activity with a presence in Spain.

WHAT ARE THE KEY STEPS TO SET UP A COMPANY IN SPAIN FROM THE UNITED ARAB EMIRATES?

When you decide to set up a company in Spain from abroad, the first practical step is to define the corporate structure. In most cases, the most common option will be the limited liability company, due to its flexibility and low share capital requirements, although in larger projects other structures may be considered.

As non-resident shareholders or directors, you need a Foreigner Identification Number (NIE) in order to be included in the deed of incorporation, open a bank account and comply with tax and commercial obligations. This NIE may be a non-resident NIE, meaning it does not itself grant a residence permit, but it does identify you before the Spanish authorities.

A large part of the process can be completed from the Emirates by granting powers of attorney to representatives in Spain. It is entirely possible to process the reservation of the company name, obtain the NIE, open the bank account for capital contribution, sign the deed before a notary and register the company in the Commercial Registry without travelling, provided that the documentation is correctly prepared and legalised.

HOW TO OBTAIN THE NIE FOR NON-RESIDENT INVESTORS AND DIRECTORS?

The NIE is a central element when setting up a company in Spain from the Emirates. It is the personal number assigned by the National Police to foreigners, which you must use in all matters of a fiscal, corporate or administrative nature.

For international investors, there is a specific procedure to apply for an NIE associated with the intention to invest or start a business activity in Spain. This can be processed either in Spain or through consular offices. In practice, this NIE for international investors enables you to move ahead with the incorporation of the company and other procedures without yet holding a residence permit.

However, it is important to emphasise that the NIE is not a residence or work authorisation. It is possible to be a shareholder or director of a Spanish company with a non-resident NIE while continuing to live in the Emirates, as long as the company’s effective management and your personal and tax positions are properly planned to avoid tax residency conflicts.

RESIDENCE, VISAS AND THE STARTUPS LAW – HOW TO UNDERTAKE BUSINESS AND LIVE IN SPAIN?

If, in addition to setting up a company in Spain, you wish to live in the country on a stable basis, you must take into account the immigration categories introduced or strengthened by the Startups Law and by the Entrepreneurs Law. For those of you working remotely for non-Spanish companies, the visa and residence permit for international teleworkers (digital nomads) allow you to reside and work in Spain for several years, provided that you meet income, professional qualification and foreign-company-link requirements.

For investors and entrepreneurs, the regulations provide specific visas and residence permits—managed through the Large Companies Unit—that enable you to reside in Spain when making a significant investment or promoting a business project of economic interest. These pathways are particularly attractive if you wish to be present in Spain to personally manage the emerging company benefiting from the Startups Law.

In many cases, the optimal strategy is to coordinate the creation of the Spanish company under the Startups Law, then obtain the NIE for all shareholders and directors, and finally select the visa or residence permit best suited to your professional profile, investment volume and degree of connection with Spain and the Emirates.

WHAT ARE THE MAIN TAX ADVANTAGES BETWEEN SPAIN AND THE UNITED ARAB EMIRATES?

One of the strongest reasons to set up a company in Spain from the Emirates is the combination of the Startups Law’s advantages with the double taxation treaty between both countries. The reduction of the corporate income tax rate from 25% to 15% during the first financial years with a positive tax base represents a significant saving for emerging companies, especially in early-stage phases where every euro matters.

At the same time, the Spain–United Arab Emirates double taxation treaty establishes rules to avoid taxing the same income twice, and regulates the treatment of dividends, interest, royalties and capital gains, as well as defining tax residence in case of conflict. This is essential if any of you maintain substantial economic interests in both the Emirates and Spain, or if profits are expected to be distributed from the Spanish company to shareholders resident in the Emirates.

Parallel to this, the special regime for workers posted to Spain (the well-known “inbound taxpayers regime”, which the Startups Law has expanded and made more flexible for certain profiles) may offer favourable personal income taxation for those of you who decide to move your tax residence to Spain to manage the project. The choice of one regime or another requires a detailed analysis of each case, and making decisions without specialised advice is risky.

WHY WORK WITH A TEAM SPECIALISED IN IMMIGRATION, TAXATION AND BUSINESS?

Setting up a company in Spain from the Emirates while leveraging the Startups Law, optimising international taxation and complying with immigration regulations requires a holistic vision. It is not just a matter of submitting forms: deadlines must be coordinated, incompatibilities between permits avoided, a corporate structure consistent with the double taxation treaty designed, and the expectations of the tax and immigration authorities anticipated.

A team specialising in immigration services and company formation for international investors can support you throughout the entire process—from obtaining the NIE and incorporating the company to handling visas and residence permits, applying the tax incentives of the Startups Law, and establishing the business in Spain. Practical experience with similar cases, especially involving profiles from countries such as the Emirates, will make the difference between a smooth project and a path full of delays and additional requirements.

At Servicios de Extranjería we are ready to support you at every stage—from the initial feasibility analysis, NIE procurement, company incorporation and visa processing, to designing the most suitable tax structure for your case. We invite you to contact us via serviciosdextranjeria.com or by phone so that we can examine your project in detail and help you turn your idea into a solid business reality in Spain.