Forming a Company in Spain

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.

The minimum capital is € 3,000.00

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.

Yes. Spanish law allows both the Sole Shareholder Limited Liability Company and the Single-owner Public Corporation.

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.

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.

Companies must keep books and submit for tax returns, quarterly and annually.

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.

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.

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).

Yes.

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.

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.

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
.

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.

 

Today (04/24/2011) there are three tax rates:

• • • General rate, 18%.
  • • Reduced rate, 8%.
  • Super-reduced rate, 4%

No.

We may provide this service in addition to.

Of course yes and without additional cost.

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.

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.

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)

There are banks that allow this kind of opening. In any case, it can be opened with a power of attorney.