A foreign investor who decides to incorporate a company in Spain must decide upon the legal entityof the business to be set up. Since Spainis a rather attractive jurisdiction for foreign investors, the entrepreneurs may choose among several options. Nevertheless, the most commonly used legal form is the limited liability companies (“Sociedad Limitada”), which make up 95% of existing Spanish companies. These companies can be incorporated with a single partner and just 3,000 euros of share capital and consequently they are the best option for foreign corporations –including large international groups– to invest in Spain.
The main questions to be addressed by the investor before investing are the following:
- Aim of the investment and activity to be carried out.
- Capital available.
- Business plan and expected turnover.
- Governing and managing bodies.
- Taxation.
- Domicile, premises, workers and other matters.
Once the investor has determined these fundamental factors complete legal advice may be provide to avoid risks and optimize your investment.
For further information see:
- Guide to business in Spain: GUIDE_BUSINESS_ENG_INVESTINSPAIN.pdf (guidetobusinessinspain.com)
- How to register a company in Spain: REGISTERED COMPANIES (rmc.es)
- Information about business in Andalusia: Business in Andalucía, Spain | Andalucia.com
- Requirements for setting up a European Company: Setting up a European Company (SE) – Your Europe (europa.eu)
Summary of frequently asked questions (FAQs):
Who can start a business in Spain?
EU citizens setting up as sole traders or partnerships can jump through the required hoops relatively quickly. In contrast, those who are from outside of the EU, will be required a work permit to move to Spain and set up a business.
Which are the first steps to setup a Spanish company or subsidiary?
- Obtain a negative name certificate in the Central Mercantile Registry. You can apply up to five names, in order of preference, and the first one available will be reserved for 6 months.
- Obtain a Spain Tax Identification Number (NIE).
- Open a bank account in Spain.
- Obtain a provisional NIF (Tax Number) for the company.
- The granting of the deed of incorporation of the company before a Notary.
- The registration in the Mercantile Registry.
- Definitive Tax Identification Number and reporting of the foreign investment
Why investors need a NIE or NIF?
If you participate in any type of economic or financial activity in Spain, you will need to request a tax identification number. This number is the specific ID that will identify you against the Spanish Tax Agency and allow this institution to control and monitor all the operations that have or do not have tax payments associated.
May I incorporate a society from my own country?
You can create a company by means of a power of attorney granted before a notary of your country (duly legalized / apostilled) or before the corresponding Embassy/Consultate of Spain. This power must contain the necessary powers to undertake all the steps.
May I open a checking account in Spain from my country without moving to Spain?
There are entities that allow it. In any case, it can be opened by power of attorney
Does the incorporation of a limited company accrue any taxes?
Since December 3, 2010 (until further legislative amendment) the incorporation of companies is exempt from taxation (previously, it was 1% on the amount of the share capital.
Is it necessary to set up a new company or can I open a branch in Spain?
Foreign corporations operating in Spain can operate as a branch office without the need to incorporate. However, it is generally advisable to incorporate rather than set up a branch office in Spain, given the numerous drawbacks associated with having a branch office. Having said that, foreign enterprises wanting to set up a branch in Spain for lower levels of activity are allowed to do so.
Who can be shareholder and director of a Spanish company?
Anyone may be shareholder as well as director in Spanish companies, including non-EU resident individuals and non-EU resident companies.
Our legal team in Spain are experts in reducing risk and maximizing benefits. We help solve problems that require expert legal support, that is the reason why we are a very competitive legal team resolving all kinds of issues within the shortest time, the highest quality and adapting our fees to your real needs, so do not hesitate to contact us if you have any doubts or if we may help you.
INNOVATIVE LEGAL SOLUTIONS
Paula Turunen Cruz (Colaboradora)
Jesús Bores Lazo, Socio-Director
