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Company formation

Company formation in Spain:

Even though it is necessary to study every case, Limited Liability Company is the most common business entity in Spain, means 65% of the total annual entities formation (source DIRCE 2009).

We can help you incorporate in Spain or draft the agreements with your local agent, we can even sign them representing you with a power of attorney or may be you need us to survey your investment evolution.

Spanish types of companies:

Type of entity

No. of shareholders

Minimum capital

CORPORATION (S.A.)

At least 1

At least 60,102

EUROPEAN COMPANY (S.E)

At least 1

No less than 120,000

LIMITED LIABILITY COMPANY (S.L.)

At least 1

At least 3,006

NEW BUSINESS LIMITED LIABILITY COMPANY S.L.N.E.

Minimum 1 / Maximum 5 at the time of formation

Between 3,012 and 120,202

How can you invest in Spain?

A foreign investor can invest in Spain several ways, but most common ones are:

  • Forming a Spanish company: Spanish "S.L." (Limited Liability) Company Formation takes no more than 10 Working Days.
  • Opening a branch or representative office.
  • Associating with other businesses already established in Spain: joint ventures are a good way of setting up business. Spanish law provides for different types of joint venture.

Also it is possible to launch in the Spanish market without having to physically set up a center of operations in Spain by:

  1. Operating through an agent.
  2. Operating through a commission agent.
  3. Making distribution agreements.
  4. Establishing a franchise.

General steps to incorporate any type of company:

First of all, If you are not Spanish or you are not Spanish resident you will have to apply for an alien identification number 'NIE'. You can apply for it in person at the Spanish consulate in your country, or in the Chief Police Office in Spain (form EX-14). All the shareholders or directors need to have 'D.N.I' (Spanish Identification Document) or 'N.I.E.' (foreigners identification number).

  • Obtain a certificate from Mercantile Registry (Company House) that the company name you choose is not already taken.
  • Draft the statutes and by-laws for the company's constitution. 'Escritura'.
  • Filing the declaration of foreign investments in Spain.
  • Obtain a temporary tax code 'CIF' from the Tax Office.
  • Arrange a local Notary appointment for you to sign the deed.
  • Pay Stamp Duty at 1% of the initial share capital.
  • Deed Registration in the Spanish Corporate Registry.
  • Obtain a certificate from the Mercantile Registry (Company House) that the constitution has been signed.
  • Register your company trading activity in Spain at the Tax Office.
  • Obtain the permanent Corporate Tax Identification Number 'CIF' at the Tax Office after the completion of the incorporation process.

What are the advantages of incorporation?

One of the primary advantages of incorporation is the limited liability the corporate entity affords its shareholders. Typically, shareholders and directors are not liable for the debts and obligations of the corporation; thus, creditors will not come knocking at the door of a shareholder or director to pay debts of the corporation. In a partnership or sole proprietorship the owner's personal assets may be used to pay debts of the business. Maintaining the limited liability of a corporation requires that the shareholders and directors follow all the rules of governance, including holding annual meetings and maintaining meeting minutes, which is why we offer corporate forms disks and corporate kits as part of our complete incorporation package.

Other advantages:

A corporation's life is not dependent upon its members. A corporation possesses the feature of unlimited life. If an owner dies or wishes to sell his or her interest, the corporation will continue to exist and do business.
Ownership of a corporation is easily transferable.
Capital can be raised more easily through the sale of stock.
A corporation possesses centralized management.

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