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Company Registration in Spain

Updated on Tuesday 09th June 2020

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Spain is a major business destination in Europe, being one of the most developed economies in the European Union (EU); in the last years, the business environment continuously expanded and those interested in opening a company in Spain can find relevant business opportunities here. The local authorities provide a wide range of incentives for specific economic sectors, which are also available for foreign businessmen. 
 
When starting a business in Spain, specific procedures have to be followed during the process of Spanish company formation and in the case of foreign businessmen, especially if they are not familiarized with the local legislation, it is highly advisable to receive legal assistance and legal representation on such procedures. 
 
In this case, the company formation services provided by Lexidy Law Boutique SPL, the company representing CompanyFormationSpain.com, can be of help. Amongst the services investors can obtain, we mention the following: company formation services, investment related services, professional advice related to the Spanish real estate market and tax advice. In case you need consultancy in various taxation matters in another country, for example in Switzerland, we recommend an experienced tax advisor in Zürich.
 
Besides these, investors can rely on professional assistance for immigration matters (visas for foreign investors, for example). Lexidy was founded by Federico Richardson Alborna, an English speaking lawyer in Spain registered with the Bar Association - number 40.082. 
 

Our affiliations 

 
Lexidy Law Boutique SPL is proud to mention that is part of several international organizations. Being a part of such structures helped us in increasing the quality of our services, and we are currently connected with other Spanish entities and foreign as well. Our company is part of the International Bar Association, the German-Spanish Association of Lawyers, the Sweden - Spain Chamber of Commerce in Barcelona, the Barcelona Bar Association
 
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Which are the main business forms available for registration in Spain?

 

Opening a company in Spain is a process that consists in drafting the articles of association of the Spanish company, together with  providing other necessary documents such as: the passport copies of the shareholders, their specimen signatures and the special forms provided by the Trade Register. Some public notary procedures are required for company formation in Spain and a registered office is also mandatory for companies set up here. In order to register a company in Spain, it is also important to open a bank account and hire a local accountant.
 
We invite you to watch a short video about opening a company in Spain:

 

 
The Spanish legislation provides several types of legal entities that can be set up by both local and foreign investors. The most common way to start a business in Spain is by setting up a limited liability company and the investors who want to start a small business on their own may register a sole trader, which benefits from a simple registration procedure. Besides these, investors interested in company formation in Spain may also set up the following types : 
 
stock corporation (sociedad anonima) – this type of business form is usually chosen when starting a large investment project in Spain;
 
joint ventures Spain offers several options but, as a general rule, it is important to know that this business form is set up in order to accomplish a specific business goal;
 
branch office – this is a suitable way for a foreign company to expand on the local market, with the mention that the branch office is considered a dependent structure to its parent company;
 
subsidiary – it also represents an option for foreign companies, as well as local companies wishing to expand in Spain, but in this case, the subsidiary will act as an independent structure from the parent company
 

Steps for company formation in Spain 

 
The steps for company formation in Spain for a foreign citizen are presented below, but foreigners can obtain in-depth information concerning these aspects from our team of consultants:
 
  1. obtain an identification number for non-Spanish citizens (NIE), a step which will allow the investors to perform the incorporation procedures;
  2. select one of the legal entities available under the Spanish commercial legislation;
  3. prepare the documents for obtaining a certification on the company’s name (investors can provide three different possible company names);
  4. open a corporate bank account at a local bank in Spain, which will be used for depositing the company’s minimum share capital;
  5. draft the statutory documents of the future company and sign them in front of a public notary;
  6. sign the public deed of incorporation; this document has to be signed by all the persons who have the quality of shareholders in the company;
  7. apply for a tax identification number with the Spanish Tax Agency
 
 

How can a businessman set up a limited liability company in Spain? 

 
The most popular legal entity for those interested in company formation in Spain is the private limited liability company (sociedad limitada laboral). The capital of the Spanish SL is divided into nontransferable shares and the liability of each member is limited by his/her contribution to the capital. A minimum share capital of around EUR 3,000 must be deposited when opening a company in Spain
 
All the decisions of the Spanish SL are taken by the general meeting of the shareholders which will appoint a director in order to make sure that the articles of association’s regulations are respected, prepare all the documents for the meetings and those which need to be delivered to the authorities and take all the daily decisions.
 

What are the main advantages of setting up a limited liability company in Spain?  

 
The limited liability company in Spain is the most popular business form that is registered on the local market due to the fact that it offers a set of advantages to the company’s investors. The main advantages of a Spanish limited liability company are presented by our company formation agents in Spain:
 
  • the company may be set up in Spain with 100% foreign capital;
  • the liability of its shareholders is limited to their contribution to the company’s capital;
  • although numerous investors can associate in a limited liability company, the business form can also be registered by a single shareholder;
  • the company can benefit from a fast registration procedure completed on the online websites of the official institutions. 

 

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What are the requirements for starting a public limited liability company (sociedad anonima)? 

 
This type of company is a form of business which requires high amounts of capital and it is also known as the joint stock company. For opening this type of company in Spain, the investor needs to have at least around 60,100 EUR as share capital (at least one quarter of this sum must be paid up before starting the company registration in Spain). 
 
The liability of the members incorporating a Spanish SA is limited by their contribution to the capital. The major decisions are taken, like in the case of the private limited companies, by the general meeting of the shareholders, but the daily decisions are taken by a board of managers supervised by a supervisory board (only if desired).
 
 

Registering a general partnership in Spain

 
This type of company is formed by at least two members with equal responsibilities and rights, since they are all considered general partners. The liabilities of the members are extended on their personal assets and, in case of company’s dissolution, those can be used to cover the outstanding claims; our team of Spanish company incorporation consultants can offer more details. 
 

Setting up a limited partnership in Spain 

 
Another form of Spanish partnership is the limited partnership, which is formed by at least one member who is a general partner and at least one which is a limited partner, with limited liability to the extent of his/her own contribution to the capital. Only the general partner can take the major decisions and, in case the person is excluded, the partnership ceases to exist.
 

Who can set up a sole trader in Spain? 

 
If a natural person decides to open a company in Spain on his or her own, an option would be the sole trader, which is the simplest form of company formation in Spain. The business represents the same entity as its owner (because there is no legal distinction between the entrepreneur and the company) and, in case of company’s dissolution, the claims can be covered with the investor’s assets.
 
No minimum share capital is required for this type of entity and all the profits can be used freely by the company’s representative. This type of business form can only be set up by a single investor who starts a business in his or her own name.  
 
 

Costs for company formation in Spain 

 
The process of company incorporation in Spain is comprised of several costs. Some of the general costs for opening a company in Spain are the following: 
 
  1. registration fee: the registration with the Registro Mercantil Central (Mercantile Register) requires the payment of a fee of approximately EUR 100; 
  2. virtual office cost: approximately EUR 80/month; the virtual office represents the most cost convenient way of obtaining a business address in Spain, necessary for conducting a business activity;
  3. minimum share capital: the costs vary depending on the legal entity selected for incorporation; in the case of a limited liability company, the minimum share capital is of EUR 3,000;
  4. company formation fee: our team of consultants in Spain can offer a competitive price for this service, established at approximately EUR 1,500;
  5. accounting costs: approximately EUR 100/month and for this service investors can receive assistance on matters referring to bookkeeping and corporate taxation. 

 

How can a foreign investor register a Spanish branch office? 

 
As mentioned at the beginning of the article, a foreign company can expand on the local market by registering a branch office, which is a type of permanent establishment that is legally dependent to its parent company abroad. A Spanish branch office has to be registered with the local authorities and one of the main requirements set out in this sense is to have the same trading name as the one of the parent company. Amongst the main incorporation requirements for company formation in Spain, we mention the following: 
 
  • provide a copy of the parent company’s articles of association, certificate of incorporation and memorandum;
  • obtain a notarized power of attorney and a Spanish tax identification number;
  • obtain a Digital Certificate, which allows a simple communication with the local authorities through the online environment;
  • appoint a representative of the Spanish branch office, who has to be a resident in Spain
 

What are the main incorporation procedures in Spain? 

 
The process of company formation in Spain begins with checking the desired name at the Mercantile Register, procedure made directly at the office of the Central Mercantile Registry or via e-mail. A bank account must be open and a certificate of deposit must be received from that bank. After that, the founders must notarize the documents of incorporation.
 
The first effective step of Spanish company incorporation is obtaining a Tax Identification Code (Codigo de Identificacion Fiscal, CIF) from the Delegacion Provincial de la Agencia Estatal de la Administracion Tributaria. The certificate of name reservation, the certificate of capital deposit and the incorporation deeds must be submitted with the Mercantile Registry in a term of maximum two months starting with the date the decision of registration was taken. 
 
Once the Mercantile Registry has issued a certificate of incorporation, the announcement regarding the incorporation of the company in Spain is published in the Official Journal of the Mercantile Registry. Then, the founders must legalize the corporate books and accounting books. The process is performed through an application at the Commercial Registry deposited electronically or in person.
 
All the companies incorporated in Spain must obtain a municipal license to open business premises, a process made through an application at the Departamento de Urbanismo del Ayutamiento. The process may take up to 15 days. The company incorporation process ends with the registration of the company’s employees at the local general treasury of social security at the Tesoreria General de la Seguridad Social. This is the last step of the incorporation process in Spain
 

Are there any other options for investing in Spain? 

 
Besides the above mentioned options for starting a business in Spain, foreign investors can also enter the local market by purchasing a ready-made business. This type of company is also referred to as a shelf company and it designates a type of business that has already been incorporated and it is available for sale
 
One of the main advantages of the Spanish shelf company is given by the fact that it benefits from a fast registration procedure, that does not take into consideration the standard incorporation, due to the fact that the legal entity has already been registered with the local institutions.
 
However, certain procedures do need to be completed, such as transferring the ownership rights to the new investors, but others, such as opening a bank account, obtaining a corporate tax number or an official business address, are not necessary. 
 
Another way to enter the Spanish market is by opening a liaison office (or a representative office), which is not set up for commercial activities. As a general rule, its only responsibilities are limited to representing a foreign company on the local market by performing certain activities – for example, through operations designed at increasing the visibility of the foreign company in Spain
 
This type of office does not need to be registered following the standard incorporation procedure, since it will not develop commercial activities, but certain requirements are imposed. For example, the liaison office will be set up by signing a public deed and it will also need to be registered for social security purposes, as it will have at least one representative acting as an employee in Spain
 

What is the current economic situation of Spain?  

 
Spain has a strong economy, with industries playing an important role on the European market, so those who are interested in opening a company here are advised to set their operations on the Spanish market. Besides, international trading and tourism are also of great importance for the Spanish economy
 
The Spanish economy began to make important steps towards a fast development, especially since 2015. Spain is ranked on the seventh place in terms of receiving foreign investments. Over 10,000 foreign companies have been incorporated in Spain and the government is still looking for different incentives in order to attract even more investors from abroad. The main investors willing to open companies in Spain so far have been from the Netherlands, France and UK, but investors from Germany, France or Mexico are equally attracted to enter a business in Spain
 

Which are the main industries in Spain?  

 
The main sectors on which the Spanish economy is built on are processing foods, textiles, footwear, petrochemicals, electronics, steel, automobiles, aerospace industry and tourism. Foreign investors starting companies in Spain tend to be attracted by the construction sector, which has reported important results at the level of 2016.
 
Other investors arrive in Spain with the intention to set up companies that activate in sectors such as manufacturing, finance and insurance, scientific activities or electrical energy supply. Madrid and Catalonia attract the most foreign investments in Spain. It is important to know that, in 2014, the foreign direct investments in Spain were situated at a level above the average one met throughout the European Union. 
 
At the level of 2017, Spain ranked as the sixth largest receiver (from all the European Union’s countries) of foreign investments, as specified by the United Nations Conference on Trade and Development (UNCTAD). As mentioned earlier, 2016 represented an important year for foreign investments, which increased by approximately 50% compared to the previous year. 
 
One of the main assets of the foreign investment policies available in Spain refers to the fact that the investors may set up companies in this country with 100% foreign ownership. However, several fields of activity do not benefit from this regulation, as it is the case of audio- visual broadcast licenses, for example. 
 
Another important aspect of the local economy is that most of the companies set up here, more exactly, 90% of them, are small companies, with less than 10 employees. The Spanish small and medium companies are very important for the local economy, as they provide three quarters of the jobs available in the private sector. 
 

Which are the main documents regarding foreign investments in Spain?  

 
Some of the main legal documents regarding the investments activities carried out in Spain are represented by the double taxation agreements. Spain is a contracting state in more than 90 agreements for the avoidance of double taxation. Foreign investments are also protected under the European Union’s legislation, which was also adopted by Spain. 
 
For more details related to the registration procedure of a company in Spain, you may contact our Spanish company formation specialists, who can offer tailored assistance for the registration of a legal entity registered in one of the Spanish cities and who can advise on the main business permits required for a commercial operator.  

 

Meet us in Madrid and Barcelona

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Call us now at +34 915 36 78 06 or +34 938 074 056 to set up an appointment with Federico Richardson, one of our specialists in company formation in Madrid and Barcelona. Alternatively you can incorporate your company without traveling to Spain.

As a Lexidy Law Boutique SLP client, you will benefit from the joint expertize of local lawyers and international consultants. Together we will be able to offer you the specialized help you require for your business start-up in Spain.

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