Forming a Company in Spain

The companies most demanded (and advisable because of simplicity and versatility) are Limited companies (Sociedad de Responsabilidad Limitada). They may be formed in about 15-20 days. A category of this type of companies is the “Sociedad Limitada Nueva Empresa”, which can be formed in 78 hours as long as certain conditions are met.

Steps:

  • 1) Requesting a corporate name. Three names may be requested in the Central Commercial Register (Registro Mercantil Central), in order of preference.
  • 2) Once you have the corporate name, you must open a bank account in the name of the company (company under Creation). In this bank account the social capital of the company must be deposited (minimum, 3.000,00 €)
  • 3) Drawing up the Articles of Association according to Law.
  • 4) Preparation of the title deed and signature before a notary public. Inside the deed are the Articles of Association.
  • 5) Requesting company tax code (CIF)
  • 6) Calculation of taxes and payment (except tax exemption)
  • 7) File the company in the Commercial Register. From this moment, the company has legal status.

All the partners must ask for the NIE at the Police Station (Número de Identificación de Extranjero -“Foreign Resident Identification Number”) and apply for registration in the AEAT: Agencia Estatal de Administración Tributaria: State Agency for Tax Administration.

We may carry out all these steps on your behalf. Ask for an estimate without obligation.

Limited companies. FAQs

Q: Can I form a company/corporation from my own country?
You may form a corporation with a power of attorney signed before a notary public in your country (duly authenticated / Apostille of The Hague Accords) or before the Embassy of Spain in your country (highly recommended). This document must contain the necessary powers to tackle all the steps. We can prepare the form for these powers of attorney and may help you in this procedure.
Q:What is the minimum share capital to form a limited company (SL)?
The minimum capital is € 3,000.00
Q:How can I make contributions to the capital and where do I deposit the amount
The capital may be contributed in cash (usually) or non-cash (after assessment).

Capital in cash must be deposited in the bank account of the company being formed. The current account will be opened in a Spanish bank, which will issue a certificate to show the notary public. Once the company is registered in the Commercial Register, the share capital will become available. Until then the money will be blocked.

Q:Can a single person form a limited company / corporation?
Yes. Spanish law allows both the Sole Shareholder Limited Liability Company and the Single-owner Public Corporation.
Q:How are companies taxed in Spain?
The general rate is 30% of the result of revenues minus expenses.

For companies of small size (most frequently):

      25% for the first EUR 120,202.41 of tax base.

 

    30% for the rest of the tax base.
Q:To form a company must I have a registered domicile?
It is compulsory to have a registered domicile which normally coincides with the tax address. This domicile can be a home, an office or premises and has to be located in Spain. You do not need to be owner or tenant of the property. In any case, the choice should be permanent because, although it is possible to change the registered domicile, any change involves expenses and fees in the Notary Public and Registry.
Q:Should I keep books?
Companies must keep books and submit for tax returns, quarterly and annually.
Q:Do our lawyer fees include the right to consultation?
Throughout the company formation that can last several weeks, the client can make legal consultations related to the company and the activity to develop, free of charge.
Q:I have a limited company in my country, can it operate in Spain?
Foreign limited companies may operate in Spain in several ways, creating a permanent establishment or forming a company in Spain, that is, the formed foreign company forms another company in Spain.

In general, operating through a permanent establishment is often problematic. The formation of a Spanish company is highly recommended, since it can benefit from higher tax deductions and favorable tax rates.

Q:Forming a limited company do incur taxes?
Since December 3, 2010 (until further legislative amendment) the formation of companies is exempt from taxation (before, it was 1% on the amount of the share capital).
Q:I want to form a limited company in Spain, I have no housing, premises or office and need a registered domicile, can you help me with this formality?
Yes.
Q:I am a national of an EU state, I want to be administrator of a limited company and reside in Spain, do I need a residence permit or working permit?
Nationals of EU Member States need not apply for residence/working permits. It is enough to get the NIE (Foreigner Resident Identification Number) and be registered in the Register of Residents of the European Union (Police Station), receiving a certificate. Resident status entitles you to carry out any economic activity as a self-employed or employed person in the whole of Spain without any limitations.
Q:I have formed a company in Spain and want to employ workers from my country, do I need to apply for a residence permit or working permit?
Nationals of EU Member States need not apply for residence/working permit. It is enough to get the NIE (Foreigner Resident Identification Number) and be registered in the Register of Residents of the European Union (Police Station), receiving a certificate. Resident status entitles to develop any economic activity as self-employed or as employed person in the whole Spanish territory without any limitations.
Q:I have formed a company in Spain and want to hire workers from my country, what is the minimum wage and social costs which the hiringinvolves?
In most economic activities the minimum wage and other labour conditions are determined by collective bargaining agreement, according to geographical area, employment, level or scale that can not be changed to the detriment of the worker.

The social costs of the worker may vary depending on incentives to hire and the personal circumstances (age, social belonging, previous unemployment, etc.) By making an approximate calculation, we can say the social costs are a third of the total salary.

Q:I am a foreigner and a partner in a Spanish company. How are the dividends received from the company annually taxed?
If the foreign partner is resident in Spain:

      The first 1.500 EUR of dividends are exempt from tax.

 

      The following 6.000 EUR are taxed at 19%

 

      The excess amount is taxed at 21%.

 

    A deduction is applicable to avoid double taxation.

If the partner is a foreigner and has tax residence abroad:

      He will pay taxes in the country of tax residence under its tax rules.

 

    Existing Conventions to avoid international double taxation will be applicable.
Q:What are the VAT rates applicable in Spain?
Today (04/24/2011) there are three tax rates:

      General rate, 18%.

 

      Reduced rate, 8%.

 

    Super-reduced rate, 4%
Q:Limited companies may opt for a simplified tax regime (called “módulos” in Spain)?
No.
Q:Once the company is formed, can you help me carry out the first steps (such as renting of offices, contact with suppliers, talk to Town Halls, etc.)?
We may provide this service in addition to.
Q:Given that your office is located in the province of Malaga (Southern Spain), can you help me to form my company if I intend to carry out the activity elsewhere in Spain?
Of course yes and without additional cost.
Q:If I am administrator of a limited liability company, do I have responsibility for corporate debts?
The administrator pays for them with his assets against debts owed to the Treasury (called in Spain “Hacienda Pública, AEAT”). Regarding common debts, administrator liability is very difficult to establish. Only in case of proven fraud (bad faith) or negligence of administrators in non-payment or bad situation of the company can this liability occur.
Q:If I am the administrator of a limited liability company, do I have a salary? Does the post entail any cost?
The position of administrator is un-paid, unless otherwise specified in the Articles of Association.

Generally, the administrator must be registered as a Self-Employed worker and pay monthly contributions. Registration entitles him or her to enjoy the public health service, and make the minimum contribution to a retirement pension.

Minimum monthly contribution (self-employed):

      Minimum contribution with Temporary Disability included (850.20 x 29.8%): 253 euros / month approx.

 

    Minimum contribution without Temporary Disability (850.20 x 26.5%): 225 euros / month approx.
Q:If I am administrator of a limited liability company, how long must I contribute to have the right to a pension?
Up to now (04/24/2011) to receive a public pension, the beneficiary has to be 65 years old and have contribute a minimum of 15 years (rule changes are expected soon)
Q:Can I open a bank account in Spain from my country without coming to Spain?
There are banks that allow this kind of opening. In any case, it can be opened with a power of attorney.