How to incorporate a company in Spain
To incorporate a limited liability company in Spain, though reasonably amenable, a number of steps must be taken. The characteristics and implications of a Spanish LLC, who can start one and its perks will be explored throughout this article.
The “SRL/SL”, for its initials in Spanish, is an autonomous legal entity whereby liability is limited to the capital invested. As such, shareholders are not personally responsible for debts incurred by the company, making these types of incorporations significantly popular throughout Spain.
These companies require a minimum investment of €3,000 however do not set a maximum limit. Said investment may be monetary or in-kind, hence may constitute of other valued goods. There is also no maximum limit for shareholders, with the minimum being just one, and these may be both legal or natural persons. The shares in a Spanish LLC cannot be traded on the stock exchange.
In order to start a business in Spain, you must hold both the right to live and to work in Spain. As an EU citizen, you must obtain a NIE (Número de Identificación de Extranjero), which acts as a tax identification number. Otherwise, if not apart of the EU, you must have a valid visa and work permit. As a foreign non-resident shareholder who pays taxes in Spain, a Foreign Spanish Tax Identification Number (NIF) can be obtained without the need for a NIE, which allows a fiscal presence in Spain.
The process of incorporation begins with hiring a lawyer, as offered through LegoLex’s services, since the set up is a complicated procedure and hence consultation is important. Subsequently, an available name must be chosen, which must be consulted at the Mercantile Registry to check it hasn’t been registered before and must include “sociedad de responsabilidad limitada” or its abbreviation SRL or SL. The Mercantile Registry will confirm and provide a certificate of proof, which tends to take around three days and lasts for 6 months. The following step consists of obtaining a tax identification code (CIF), which can be applied for throughout a form on the Agencia Tributaria’s online page. It must then be submitted in person to the local tax office, which in Madrid is located in Calle Guzmán el Bueno, 139, along with a copy of your NIE.
A business bank account then needs to be opened under the company name, where the minimum investment must be deposited and a certificate of proof-of-payment needs to be asked for from the bank. The following step concerns a public deed of incorporation, which includes all information of the company and officialises the company’s set-up. This document must be published by a notary and has to be accessible to the public.
The last steps involve registering the company, whereby the original deed must be taken to the local tax authority for stamping. Secondly, the stamped deed has to be taken to the Mercantile Registry for filing in the official registry for companies, a process which usually takes 15 days. Lastly, once the registration is confirmed, you must go to the local tax office once gain to obtain the final CIF number by bringing along original and copies of the deed and your NIE. The final step is registering the company with the social security authorities, which involves visiting the local office also with originals and copies of the deed, NIE, tax forms and the TA0521 form.
Overall, there are multiple benefits to choosing to incorporate through a limited liability company in Spain, including the possibility of having foreigners own 100% of the shares and the significantly low minimum share capital. Moreover, there is also a possibility to register online for a fast registration process, hence making the procedure reasonably straightforward.