COMPANY FORMATION IN SPAIN

We guarantee your company Formation in Spain in Record Time.

What are the most common companies in Spain?

The following are the legal forms of company most usually found in Spain:




1. Limited Liability Company (S.L)

2. Public company (S.A)

3. Others

 
According limited to the Central Mercantile Register, 98% of Spanish companies are of limited liability (S.L).




Limited Liability Company is recommend in almost all of the cases









Which is the most appropriate manner for setting up a company according to my business needs?

As a general rule, setting up a business requires the creation of an S.A. or S.L..


A branch could be more convenient given the fewer legal obligations (for example in the filing annual reports).


A representative office will only be used in the event that the activities carried out are merely those of coordination, collaboration and promotion of the head office’s activity.





...S.A. or S.L.?




In general terms, a Sociedad Limitada (limited company) is used because:


1- It requires a smaller share capital.


2- It requires fewer administrative formalities to operate;


3- It offers greater flexibility to define the S.L.'s internal rules of governance in the bylaws.


The minimum capital of the S.L. is €3,006 and must be fully paid in at the time of formation.





...Branch or subsidiary?




A branch is a permanent establishment and it is not a separate legal entity. In fact, it is an “extension” of the parent company and does not require a minimum allocation. Therefore, the parent is responsible for the liabilities of the branch.


A subsidiary, because it is an independent legal entity, generally has greater flexibility of action and shares the risk with its head office.




What steps are necessary for setting up a company in Spain?

The new corporation in Spain will have to appoint an individual with a Spanish national identity card number as its representative.


If the individual is not Spanish, he or she will have to apply for an alien identification number (NIE) as a first step.




Step 1. Application for a NIE (Foreigner’s Identity Number) for the company's director  and founder shareholders;

Step 2. Obtain a clear name search certificate from the Central Mercantile Registry.

Step 3. Open of a bank account and obtain a certificate of deposit of initial capital.

Step 4. Granting the public deed before a Notary Public.

Step 5. Application for provisional Fiscal Identity Code for the business;

Step 6. Payment of Capital Transfer Tax.

Step 7. Registration within the Mercantile Register.

Step 8. Obtain a Definitive Tax Identification Number (CIF).

Step 9. Declare the foreign investment (D-1A form) at the Foreign Investments Registry (for statistical purposes only).




What documents are necessary for the establishment of a company in Spain?

The following documents are necessary when setting up a business in Spain:




1. Power of attorney.


The founders should grant sufficient power of attorney to the person responsible for setting up a new company in their name in Spain.



2. NIE (Foreigner’s Identification Number).


If the founders wish to appoint a non-resident as their representative, then this person must give power of attorney to someone who can apply for the NIE (Foreigner’s Identity Number) on their behalf.



3. Certificate of availability of company name for registration.


The chosen name of the new company must be submitted to the Central Mercantile Register which will, in turn, confirm the reservation of the same and check to ensure that it is available and may be used by the new company.

In principle, this certification is valid for 3 months and should be renewed if the new company is not founded within that period. Nonetheless, no one else may reserve the same name within the following 3 months so, in practice, the reservation remains valid for 6 months.



4. Bank certificate proving that the relevant payment has been made.


When the new company is set up, the relevant sum is usually paid in cash or transferred to a Spanish bank account in the name of the new company with the words ‘in process of constitution’ added at the end. A certificate of availability of company name for registration is usually required for the opening of this account.

5. NIF (Fiscal Identification Number).


6. Documents required by the Spanish Notary Public.

7. The companie’s by laws.

 

Foreign investment declaration (Form D-1A) duly completed. This document is purely informative, and it must be delivered to the Register of Foreign. Investments within the first month of the new company’s existence. The Notary Public may take charge of this task if so wished.

 

Which is the price for setting up a company?

Our “all included” fees for incorporating a company, is 1,400 Euros plus VAT.

Obtaining the NIE number on your behalf will be charged at 300 euros plus VAT.




How LONG does it take to establish a company?

Setting up a company takes approximately between one week and a month, which could take longer given the process to obtain an NIE (foreigners identity number), granting powers of attorney and internal decisions of the promoters.





Which is the minimum number of shareholders?

The  Spanish companies may be incorporated with a minimum of one shareholder.





Who represents  the Spanish company ?

The company ‘s body of government may be either of the following:



Sole administrator 

Joint and severance director, where any of the directors may sign on the company’s behalf. 

Jointly liable directors, where a joint signature is required for representing the company.




When is Corporate Tax applied and what rates and deductibles does it have?

The general tax rate on taxpayers is 30% and 25% for SMEs (Smes) (other tax rates). These percentages will be 20 and 25 % respectively when certain requirements on employment upkeep and turnover are met.





And after the incorporation…?

Our firm offers a highly specialized team of accountants, payroll specialists  and tax advisors that will handle the compliance of the company.



NIE Number

Shelf companies