Spain is considered an attractive jurisdiction among European countries for fintech entrepreneurs seeking access to the EU financial market. The local system provides a clear path for companies offering payment services, money remittance services, and related financial activities.
New businesses may consider the status of a SPI as their initial step. It gives companies the opportunity to operate under a simplified regulatory framework while building their presence in the EU.
This guide addresses the key issues related to SPIs in Spain.
Legal and Financial Landscape
Financial technology firms operating in Spain are subject to local laws based on European directives implemented throughout the EU. Spanish regulators closely monitor organizations engaged in payment services, transaction processing, and other financial activities, with particular emphasis placed on transparency, customer protection, and regulatory compliance.
The Banco de España is the main regulatory body in charge of the oversight of this sector.
While the SPI framework is considered as a more straightforward alternative to a full authorization, applicants have to demonstrate a sound business model and the ability to operate in compliance with applicable regulatory demands.
Key Areas Reviewed by Authorities
| Area | Main Focus |
| Ownership Structure | Transparency of shareholders and founders |
| Internal Controls | Transparent workflows and oversight mechanisms |
| Client Identification | Verification of users and transaction screening |
| Data Protection | Secure handling of monetary details |
| Financial Stability | Sustainable business activity |
Spanish authorities generally prefer applicants that demonstrate realistic business strategies rather than purely formal applications that are not supported by real operational capacity.
Authorization Process
Approval depends on a detailed submission package that accurately reflects the planned activities and the company’s internal organisational structure.
During the review process, the authorities typically examine:
- founding and management personnel;
- business funding sources;
- intended financial operations;
- company-wide risk management procedures;
- AML policy;
- client identity verification procedures;
- overall business strategy.
Usually, particular attention is paid to the qualifications and professional experience of managers and beneficial owners.
Besides, applicants are advised to maintain a real business presence in Spain.
Financial Foundation and Business Stability
Organizations that manage client funds must have a sound financial standing at all times. Spanish regulatory bodies will check if the company is well-funded to run day-to-day operations and to carry out internal controls effectively.
The following are some of the areas typically inspected:
- credibility of projected revenue;
- clarity of the sources of funds;
- business continuity and recovery planning;
- budgeting and monitoring;
- ability to ensure secure transaction processing.
Internal Standards and Ongoing Supervision
An institution operating in Spain will be subject to supervision and regular inspections and will be required to have in place clear and documented procedures for all of their operations.
AML Measures
Businesses should put in place mechanisms which enable them to identify suspicious transactions and perform customer due diligence.
Risk Management Procedures
The authorities require companies to identify and assess the highest-risk scenarios related to:
- fraud,
- cybersecurity,
- data breaches,
- transaction security.
Documentation and Internal Policies
Written internal policies remain an important element both during the initial review stage and during later inspections. Generally, these are the subjects of the documents:
- client onboarding;
- internal decision making;
- reporting channels;
- information security;
- dispute handling procedures.
Reporting Duties
Organizations with SPI license in Spain may be required to send regulators periodic reports concerning financial operations and internal control arrangements.
Expansion of operations
Although SPI status provides a more straightforward path for organizations to enter the market, it does not grant them access to the EU passporting regime which is a benefit to fully authorised institutions. Therefore, entities that choose to operate as SPIs will primarily be restricted to offering their services only in the member state where they are registered. If they intend to extend their operations to other EU or EEA countries, it is necessary to take into consideration the acquisition of additional authorisations.
Why Spain
The country has become a popular jurisdiction for fintech startups aiming to set up in Europe. This growth is driven by several factors:
- a well-established banking network;
- a legal system recognized worldwide;
- a growing fintech ecosystem;
- excellent opportunities for cross-border trade.
Assistance From Eternity Law International
Entering the Spanish financial sector demands careful legal planning and understanding the expectations of the local regulators. Even smaller players still undergo a thorough examination before they are authorized.
Eternity Law International helps international clients in acquiring SPI status in other European jurisdictions as well.
We can provide consultation and work side by side with you on:
- Preparation of legal documents;
- Structuring of fintech project;
- Crafting of internal policies;
- Liaising with supervisory authorities.
After closely analyzing the client’s main business activity and future objectives, the most suitable and effective solution is offered.
Conclusion
Spain has become an increasingly important hub for fintech companies and digital finance businesses in Europe.
A SPI offers businesses an opportunity to enter the EU financial sector without immediately pursuing a broader authorisation model.
Getting an approval depends on good preparation, having a clear structure of ownership, robust internal controls, and properly documented legal materials.
If a business is planning long-term growth in Europe, Spain can serve as an effective entry point into the broader European market.
FAQ
What is a Small Payment Institution (SPI) in Spain?
It is a legal entity allowed to conduct certain money transfer and transaction-related activities under a simplified authorization model. This format is often chosen by fintech startups, digital finance platforms, and businesses entering the European financial sector for the first time.
An SPI operates under the supervision of the Banco de España and must follow Spanish and EU legal standards related to financial transparency, client protection, and AML rules.
What are the capital requirements for an SPI?
SPIs are typically exempt from the initial funding threshold. Nevertheless, the organization needs to prove that it has enough financial means to run business in a secure way.
The regulators examine the applicant’s funding situation, financing schemes, anticipated volume of transactions, type of business, and risk profile. The organization should be capable of demonstrating that it has sufficient facilities to back its operations and satisfactorily fulfill its customer-related commitments over time.
How is an SPI different from a Payment Institution (PI)?
The biggest differences are the size, range, and regulatory position of the entities.
An SPI is under a simplified regime meant for smaller providers with statutory transaction limits, and it does not have EU passporting rights. The activities of an SPI are generally limited to the Member State in which it is registered.
On the other hand, a PI is a fully authorised organization and not limited by the volume of transactions. PIs also come under more stringent regulatory demands than those faced by SPIs. These conditions include initial capital thresholds, safeguarding rules, governance and risk management standards, and ongoing supervision, among others.