According to a report by the Spanish Retail Textile Association (ARTE), in 2023, there were 54,600 companies dedicated to the sale of clothing and footwear in Spain. The average turnover of these businesses was approximately €952,000, representing a 20.5% increase compared with 2019.

The boom in the fashion industry—driven mainly by garment and footwear retailers, comprising 89.5% of the sector’s enterprises—is encouraging many entrepreneurs to try to carve out a niche. In this guide, we outline the key factors to consider before establishing a clothing store in the country, as well as the legal requirements and tax obligations that must be complied with.

What’s in this article?

• Why open a clothing store in Spain?
  
• Requirements for opening a clothing store in Spain
  
• Step-by-step guide to opening a clothing store in Spain
  
• FAQs about opening a clothing store in Spain
  

Why open a clothing store in Spain?

Growth in the apparel sector has sparked trends that position opening a storefront in Spain as an entrepreneurial opportunity with clear advantages. Let’s take a look at some of the main reasons:

• Products in high demand
  The fashion industry is experiencing an upward trend, aligning with the growth of ecommerce in the country and a widespread interest among shoppers in regularly updating their wardrobes; in fact, 6 out of every 10 Spaniards purchase a new item of clothing every month. The sustained demand shows in higher revenue, as the Spanish textile sector’s sales volume rose by 7.3% in October 2024.

• Sustainable option
  Fashion companies emit 22.8% less CO₂ than retailers in other markets. The ARTE report revealed another striking fact: during the past six years, the industry cut its overall CO₂ emissions by 24.3%.

• Large economic potential
  Based on data from the National Commission for Markets and Competition (CNMC), this sector generated the second-highest revenue during the fourth quarter of 2024, accounting for 6.6% of the total in ecommerce. Furthermore, as stated by the Ministry of Industry and Tourism, this market accounts for 2.8% of the country’s GDP.

• Moderate entry barrier
  Several of the business models employed by apparel shops in Spain require a relatively low initial investment. For example, certain fashion ecommerce entities use on-demand printing services or dropshipping to minimize inventory costs.

Requirements for opening a clothing store in Spain

Although the plan can be simpler in this industry, entrepreneurs still need to follow the same bureaucratic process. Below are a few of the requirements for opening a clothing store in Spain that cannot be overlooked:

• Registration as self-employed or incorporation of a company
  Register as self-employed by completing Form 036 of the Spanish Tax Agency (AEAT) or create a company. Most in the textile sector in Spain are single-member entities (41%) or have fewer than 10 employees (44%). Therefore, if incorporation is the path, the best option is likely to be creating a limited liability company (SL).

• Choosing the Tax on Economic Activities (IAE) category
  Indicate the type of professional activity to be carried out with the corresponding IAE category. For clothing shops in the country, the typical choices are 651.1 (retail sale of textile products) and 651.2 (retail sale of any garments and headwear).

• Registering in the value-added tax (VAT) regime
  Apply for the certificate of VAT taxpayer status in Spain to comply with the obligation of collecting tax. For apparel, the standard VAT rate of 21% applies. Subsequently, it is necessary to remit the collected amount to the AEAT by filing the quarterly VAT return using Form 303. Through these fiscal liabilities, the textile industry generated over €7.55 billion in taxes in 2023.

Step-by-step guide to opening a clothing store in Spain

Now that the requirements are clear, it is time to shape the project. Below are a few foundational steps:

Step 1: Define your category

As we mentioned at the beginning of this article, there are more than 50,000 clothing stores in Spain, resulting in a highly competitive market. The first step to facilitating the success of your business is to identify a niche in the industry that allows you to differentiate yourself from the competition. Here are some of the categories with the highest demand in the country:

• Sportswear
  As reported by Modaes, in 2023, the sportswear segment experienced growth of 5.6% and reached total retail sales of over €5.9 billion. The average amount spent on sportswear per person is also trending upward, reaching €123.20 (over €5 more than the average amount spent in 2022).

• Inclusive clothing
  There is widespread discontent in Spain about the sizing offered in department stores. Specifically, 84% believe that the offering could be improved, while 52% have had difficulties finding their size. So, the inclusive clothing category—such as large sizes and genderless styles—could be a strong area of specialization for your project.

• Workwear
  Per the National Statistics Institute (INE), out of more than 3.2 million companies active in January 2024, 11.8% belonged to construction, 8.1% to hospitality, and 5.4% to manufacturing. It is very common for employees in these three fields to wear uniforms or personal protective equipment (PPE) at work. Because of this, demand in the workwear category is usually stable. If primarily targeting enterprises, one could also offer products from the apparel shop on B2B marketplaces.

• Childrenswear
  While it is true that in 2023 childrenswear products sold 5.8% less compared with the previous year—probably because in the same year the birth rate recorded an all-time low with only 320,656 births—the childrenswear industry usually has healthy profit margins.

Step 2: Choose the sales channel

Once the category is defined, you will have to select the most suitable sales channel. Though the ideal option is to complement an online clothing store with a physical retail space, it is typical to focus efforts on one of these avenues during the initial stage:

Opening a brick-and-mortar clothing store in Spain

Based on the report “Generation Z and fashion,” 41% of young people prefer to purchase clothing in brick-and-mortar stores. 78% state that the main reason is the ability to try on the apparel; thus, in-person commerce remains predominant, including digital natives. This is one of the strong reasons that lead many entrepreneurs to open a physical location in Spain by following these steps:

• Choosing the premises
  Under the Ministry of Economy, Trade, and Enterprise’s 2023 domestic commerce indicators explanatory guide, there were 543,658 retail establishments in the country. When selecting premises for your clothing store, consider both the direct competition in the area and the flow of potential customers. Generally, avoid locations saturated with stores in similar categories, as this makes it difficult for the business to differentiate itself from its competitors. Ensure that it is in an area with adequate foot traffic.

• Applying for the license
  Before launching a clothing store, you will need to obtain a license to open and operate one. To do so, a qualified professional must draw up the activity project that describes the establishment’s characteristics. This technical document is central to starting the process, filed online under Article 14 of Law 39/2015, with slight variations depending on the municipality. The permit certifies that the premises comply with the legal requirements concerning safety, accessibility, and environmental protection.

• Contracting services
  Once the license is issued, owners can contract for fundamental services, including water and electricity supply, security systems, internet connection, and a point-of-sale (POS) or card terminal. If accepting in-person transactions or digital wallets without using devices provided by the bank, consider a bankless terminal; for instance, with Stripe Terminal, you can use advanced card readers that are integrated with your web shop, which allows you to manage all payments—in person and electronically—from a single platform.

Opening an online clothing store in Spain

Style ecommerce is constantly growing in the country: in 2023, sales increased by 14.1% year-over-year and exceeded €5.6 billion. In fact, according to data in the 2023 “Report on online fashion in Spain,” ecommerce accounts for 21.1% of the total revenue of garments and footwear—compared with 12% of the beauty industry or 2.2% of food and drink—making fashion the consumer goods sector with the highest proportion of web-based sales.

One of the major advantages of this route is the ability to sell to customers worldwide. France, Italy, and Portugal are the primary European markets for Spanish clothing stores, as noted in the 2024 “Economic Report on Fashion in Spain.”

If you decide to use a digital channel, the process is usually much more accessible than with a brick-and-mortar location. Below are some fundamental steps:

• Create the online store
  If there’s an understanding of web design and programming (or a team dedicated to development), the most common option is to create an in-house online store. If you prefer not to have to write your own code, you can choose an ecommerce platform such as Shopify, PrestaShop, or WooCommerce. In both cases, the website must comply with the Law on Information Society Services and Electronic Commerce (LSSI) and the General Data Protection Regulation (GDPR).

• Connect your store with a payment gateway
  To accept online transactions, it is key that the web shop integrates a payment gateway that is straightforward to use, secure, and complies with current legislation, including the Payment Card Industry Data Security Standard (PCI DSS). For example, Stripe Payments is a modern payment platform that supports electronic and in-person transactions to be accepted using the methods preferred by your customers, such as Bizum (with more than 28 million users in Spain), Apple Pay, Google Pay, and installment options.

• Establish the return policy
  As shown by a survey by Statista, clothing is by far the category that produces the most returns in Spain. To convey confidence and incentivize sales, it is important to establish a clear and straightforward return policy. Remember that the law establishes a minimum period of 14 days during which the buyer can exercise their right to send goods back; extending this period helps reduce purchasing barriers. In any case, bear in mind that partial refunds—in which the shopper decides to keep some of the items purchased and request money back for the rest—are also especially frequent in apparel purchases.

Step 3: Contract a supplier

Selecting a reliable supplier is a necessary step in minimizing send-backs and ensuring customer satisfaction. When choosing the ideal vendor, consider factors such as product quality, company reputation, delivery times, and, of course, price.

Per the 2024 “Economic Report on Fashion in Spain,” China remains the primary source of fashion imports, accounting for over €6.6 billion and 23% of the total. Price is the primary factor that leads many entrepreneurs in the industry to source from vendors in this country, especially in models such as dropshipping or on-demand printing, where the supplier is directly responsible for delivering to the end shopper.

FAQs about opening a clothing store in Spain

Is there financial support for opening a clothing store in Spain?

Currently, there is financial support available for establishing a clothing store in the country. The Entrepreneurship Service Point (PAE) can help you get a grant for starting up the business, such as the Digital Kit, which awards a maximum of €5,000 of financial support for small and medium-sized enterprises (SMEs) and self-employed persons who want to create a web shop or digitalize the management of the fashion product catalog.

Do you need to register as self-employed or incorporate a company to create a clothing store in Spain?

Yes, it’s mandatory to register as a sole proprietor or incorporate a company before selling in a store, as this is the only way to issue invoices with VAT legally. While it is true that some cases allow selling online without being self-employed, these cases are rare and typically don’t apply to someone looking to create their own ecommerce boutique.

How can I open a clothing store without any money?

If you don’t have any initial capital, there are business models that allow you to start selling clothing without investing in stock or a physical store. Here are two of the most common options:

• Dropshipping: With a dropshipping model, the web shop acts as a storefront and sends each order to its supplier, who manages both the storage and the deliveries to the end shopper. This process eliminates the cost of maintaining your own inventory, although it typically comes with a higher volume of service requests.

• Print on demand: A print-on-demand vendor enables personalized garments to sell from a web shop. When an order arrives, the supplier produces each item individually and ships it directly to the purchaser.

These formats reduce up-front costs and are a practical way to validate a business idea. Later on, if your clothing store expands, there is always the option to manage your own inventory or open a brick-and-mortar space.