How to set up a company in the Valencian Community (LLC vs. sole proprietor) step by step

More and more professionals and young families from other countries are settling on the Costa Blanca to start businesses. Here you will see when an SL (limited company) is more convenient than registering as a sole trader and the essential steps to get off to a good start.

SL or sole trader? Advantages and disadvantages

Criterion	SL	Sole trader
Liability	Limited to the capital	Unlimited (personal assets)
Taxation	Corporate Tax	Progressive personal income tax (IRPF)
Start-up costs	Notary/Registry/minimum capital	Low
Contributions	Payroll/administrator + Social Security	Sole trader contribution
Image to third parties	More corporate	More personal
Administration	More formalities	Simplified

Steps to create an SL (summary)

NIE and, if applicable, digital certificate.
Certification of company name.
Open a bank account and deposit capital (usual minimum €3,000).
Bylaws and signing before a notary.
Registration in the Commercial Register.
Tax registration with the Tax Office and tax obligations.
Social Security registration if there are employees or paid administrators.

Registering as a sole trader (summary)

NIE and tax census registration (relevant forms).
Registration in the Special Regime for Self-Employed Workers (RETA).
Selection of IAE category and VAT/IRPF regime.
Registration of the workplace if applicable.

Indicative costs and timelines

SL: notary and registry, advisory services for bylaws and procedures, bank account opening; typical timeframe 1–3 weeks depending on workload.
Sole trader: faster processing (often within a few days) with advisory support.

Common mistakes to avoid

Not forecasting cash flow for the first months.
Not clearly defining the bylaws (corporate purpose, administrator’s compensation).
Choosing the wrong VAT or IRPF regime.
Forgetting municipal licenses if there is a premises open to the public.

Checklist

NIE and digital certificate.
Basic business plan and bank account.
Local tax and labor advisor.
Choice of legal form and tax regime.
Calendar of obligations (VAT, IRPF/corporate tax).

Notice

Regulations may change. Consult a local advisor to confirm the steps and advantages for your situation. At Bullmann Properties we connect you with trusted partners in the Marina Alta.