Step 1: validate the market before internationalising your SME
The first step in SME internationalisation is not choosing a country, but confirming that your product or service has demand outside Spain. Analyse whether you already receive customers, enquiries or sales from other markets: it is the most reliable sign that traction exists.
Do a simple test before investing in a company. Invoice from Spain with an intra-community VAT number, validate prices and logistics, and measure the customer acquisition cost in the target market. If the numbers add up, it makes sense to take the leap to a local structure.
International expansion works best when the market shares a language, time zone or regulatory framework, but do not rule out more distant markets if the margin justifies it.
Step 2: choose country and legal structure
Portugal and France are the closest and most affordable options for selling within the EU. Andorra stands out for its low taxation, Dubai is the gateway to the Middle East and Asia, and Germany brings credibility in the Central European market.
Key points
- Portugal — LDA Unipessoal · IRC 19% · VAT 23% · 4-8 weeks
- Andorra — SL or SLU · IS 10% · IGI 4.5% · 2-6 weeks
- Dubai — Free Zone or Mainland · CT 9% · VAT 5% · 1-3 weeks
- France — SAS or SASU · IS 25% · VAT 20% · 3-6 weeks
- Germany — GmbH (share capital €25,000) · IS 30-33% · VAT 19% · 6-14 weeks
- Italy — SRL or SRLS · IRES 24% · VAT 22% · 4-10 weeks
Step 3: taxation and double taxation in SME internationalisation
Taxation defines the real profitability of your expansion. Do not compare only the nominal corporate tax rate: also look at VAT, dividend withholding taxes and social contributions, which in countries such as France or Germany can exceed those in Spain.
The double taxation treaty with Spain is key. Portugal, France, Germany and Italy have signed one, so you will not pay twice on the same profits if you keep your residence in Spain.
Decide before incorporating whether you will invoice within the EU —where you will operate with an intra-community VAT number and VIES— or outside it, because this changes your registration and invoicing obligations.
Step 4: incorporation and banking, the procedures that get stuck the most
The process varies by country: in Dubai you can have your company up and running in 1-3 weeks, while a German GmbH can take between 6 and 14 weeks due to the €25,000 share capital requirement and the notary.
Opening a bank account is the usual bottleneck: some countries require physical presence or a tax representative. Sort this out before signing clients, because without local banking you cannot collect payments or pay taxes.
At Filnet we analyse your case, run the recurring tax and accounting work and coordinate with the local firm. If you also need a registered office or a tax representative, we assess it with you. Write to us at hola@filnet.app and we will advise you on the country that fits.
Step 5: operations, hiring and common mistakes
Plan hiring in advance: labour costs and minimum wages vary widely between European countries. An SME that grows without an orderly tax and employment structure ends up paying more in penalties and corrections.
Key points
- Choosing a country solely for its tax rate, ignoring operating costs and logistics
- Not registering the company in VIES and losing the intra-community VAT exemption
- Operating without a local bank account or without a tax representative when it is mandatory
- Mixing personal and corporate residence without planning it with an adviser
- Hiring employees without knowing the country's minimum wage and collective agreement
