Relocating a business to Spain is often seen as a natural step toward growth: entering new markets, creating a more comfortable environment for the team, strengthening the employer brand, and gaining access to European infrastructure.

However, in practice, moving a company is not only about new opportunities. It also involves legal procedures, taxation, operational costs, employee adaptation, and strategic decisions — where the cost of mistakes can be significant.

Let’s look at the five most common mistakes companies make during relocation.

1. Incorrect Assessment of Tax Burden

Many assume that relocating automatically reduces taxes. In reality, this is not always the case.

Spain can be an attractive jurisdiction when the business structure is properly designed. However, it is not a low-tax country or a “tax haven.”

Before relocating, it is important to analyze:

• corporate taxes
• employee payroll taxes
• VAT (IVA)
• international income structure
• tax residency of owners and team members

Without proper предварительный analysis, a company may face higher-than-expected costs.

2. Choosing the Wrong Employee Relocation Scheme

There are several legal options for relocating employees to Spain:

• Digital Nomad Permit
• Highly Qualified Professional Permit
• Intra-Company Transfer

Choosing the wrong option can affect processing times, employee status, tax implications, risk of rejection, and the ability to renew permits.

The migration strategy should be aligned with the company’s structure and goals, not adjusted after the fact.

3. Incorrect Choice of Legal Structure

Entering the Spanish market usually requires setting up a new legal structure.

Possible options include:

• a Spanish legal entity
• a branch of a foreign company
• a representative office
• a holding structure

Each option impacts taxation, liability, hiring processes, accounting requirements, and investment opportunities.

Mistakes at this stage can lead to long-term financial and operational consequences.

4. Ignoring Employee Comfort

Relocation is not only about documentation — it is about people.

If employees face everyday challenges such as inconvenient transportation, difficulties relocating with family, lack of familiar infrastructure, or general lifestyle issues, their motivation can quickly decrease.

It is important to consider:

• transportation accessibility
• availability of schools and kindergartens
• language environment
• cost of housing
• family adaptation
• frequency of travel to the home country

A strong team remains the key asset in any relocation process.

5. Budget Miscalculations

One of the most common issues is underestimating the real cost of relocation.

In addition to obvious expenses, companies often face additional costs:

• legal support
• government fees
• company registration
• accounting services
• office rent
• employee housing
• insurance
• document translation
• urgent and unexpected expenses

A practical approach is to allocate an additional 10–20% on top of the base budget to mitigate financial risks.

Conclusion

A successful company relocation is not a matter of luck — it is a matter of preparation.

With proper planning of taxes, business structure, migration processes, and budgeting, Spain can become a strong growth point for a company.

 

About Docsinside

If you’re considering employee relocation to Spain and want to handle the process in a structured way, Docsinside can help. The platform guides you step by step and helps you keep documents organized in one secure place—convenient for employees, HR, and leadership. To discuss your situation, email us at b2b@docsinside.com.