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SPANISH COMPANY INCORPORATION FOR FOREIGNERS

Spanish company registration & Corporate Services

👉 Everything you need to know to start your business in Spain as a foreigner.

In Spain, there are many legal forms. In general, Spanish companies are usually classified into four main groups: limited companies, joint stock companies, partnerships, and limited partnerships. First of all, it is important to analyze the activity you intend to carry out and be able to decide the form that suits you best. Note that the Spanish Company Registration procedure can be different for each type.

Types of companies in Spain

Limited liability (llc)

– Most common type of company in Spain.

– Liability limited to the capital contributed.

– Minimum share capital requirement of €1.*

– Minimum number of shareholders: 1

* In accordance with the recent amendment to the Companies Act through Law 18/2022 of September 28, on the establishment and growth of companies, which, among other things, approves the incorporation of limited liability companies with a minimum capital of 1 euro. For this purpose, the following must be complied with: Companies with a share capital of less than 3,000 euros, in order to safeguard the interest of creditors, (i) the endowment of a legal reserve of at least 20% of the profit until the amount of the legal reserve and the share capital reaches the amount of 3,000 euros, and (ii) the joint and several liability of the shareholders with the company, up to the difference between the amount of 3,000 euros and the figure of the undersigned share capital if, in the event of liquidation, the company’s assets would be insufficient to meet the payment of the corporate obligations.

corporation (joint stock company)

– Minimum capital required: €60,101.21.

– Minimum number of shareholders: 1

– Can be listed on the stock exchange.

– Certain activities such as banking, pharmaceuticals, insurance, pension fund management… require this type of commercial company.

PARTNERSHIP

– Partnership: the partners invest capital and contribute their work as they manage the company directly.

– Unlimited liability. (they are liable for the debts of the company.)

– No minimum share capital.

– The name of the partners must be included in the name of the company.

"SOCIEDAD COMANDITARIA" LIMITED PARTNERSHIP

– There are two types of Limited Partnership: simple and by shares.

– General partners have unlimited liability for corporate debts.

– Limited partners have limited liability. (Limited to the contribution to the share capital.)

– There is no minimum share capital.

– Have a complex structure and operation.

BENEFITS OF SPANISH COMPANY REGISTRATION IN SPAIN - INCORPORATION OF AN LLC ✅

As a matter of fact, most small-medium business owners end up choosing a limited liability Spanish company because of its benefits.

Protect yourself

Liability limited to the amount contributed.

(For example, in the event of insolvency of the company or any other problem affecting the company’s finances, the company will be liable exclusively with the capital contributed by the partners).

Less taxes

In general, a company is taxed at a flat rate of 25%. Although in some cases, a reduced rate of 15% can be applied to some companies. On the other hand, an individual entrepreneur (“autónomo”) will be taxed according to his profits. In addition, the tax rate can range from 15% up to 45%.

Image

Having a company will always reinforce the image that your potential clients perceive of you. As a consequence, acting through a corporation reinforces the client's perception of organization and team.

SPANISH COMPANY REGISTRATION PROCESS

A few things to know!

business incorporation
Incorporation in 8 easy steps.**

1. First, it is important to find the best legal structure.

2. Second, Spanish company name reservation.

3. Also, we will need to draft the Company’s article of association (bylaws).

4. Sign off the documents before a Spanish Notary Public.

5. Submit the Deed of Incorporation to the Spanish companies house.

6. Tax registrations.

7. Open the Spanish company’s corporate bank account.

8. Finally, we will complete the Social Security registrations.

Start your business!

** At this stage the shareholders need to have a Foreigner’s Identification Number (“NIE”). (Don’t worry, we can handle it as well!)

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FAQ's Spanish Company Registration (Limited Liability Company)

– How long does the incorporation procedure take?

The approximate deadlines for the Spanish company registration procedure would be as follows:

– In case of power of attorney: 2-6 weeks, from the moment of reception (including the time it takes us to obtain the corresponding documentation).

– If you are in Spain and you have all the corresponding documentation: 25 working days.

– Do I have to be in Spain to start the process?

No! We can carry out most of the Spanish company registration procedure without the presence of the client in Spain. We manage the procedure through a power of attorney that you will have to grant in your country of residence. We will only need you to be present for a couple of days at a later stage to finalize the Spanish company registration procedure.

– How much taxes will I have to pay?

Corporate income tax

– The general tax rate of 25% is applicable to corporations as of 2017.
– There are occasions when companies can benefit from a reduced tax rate of 15%. This is applicable to those companies that represent the start of a new economic activity, and such tax rate will apply to the first two fiscal years. This reduction does not apply if the company is part of a group.

Value Added Tax (VAT)

– The tax is payable on any commercial transaction, and is subject to a quarterly and annual declaration. At the same time, the normal tax rate is 21%, applicable to most commercial transactions.
– The quarterly declaration to be made in April, July and October. This will be made at the Tax Agency by filing form 303.
– The annual declaration will be submitted with the last quarterly one, with the presentation of the form 390.

– Do I have to be a resident in Spain or be Spanish to incorporate a company?

It is not necessary to be Spanish or European to be a shareholder of a Spanish company. You can complete the Spanish company registration procedure without having Spanish or EU citizenship. However, the person who is going to hold the position of company administrator must have a residence and work permit in Spain.


More services.-

Spanish company's share acquisition
The acquisition or sale of shares of companies in Spain is a formal procedure. That is to say, it must be carried out before a notary to safeguard the interests of the parties. Also, in case the acquisition implies the change of the administrator of the Spanish company, this new appointment will require a registration in the Mercantile Registry. Before acquiring the Spanish company’s, we advise you to carry out a Due Diligence. In other words, it is important to first check that everything is in order.
Dissolution and liquidation of Spanish companies
Many business owners are forced to dissolve and liquidate their businesses for a variety of reasons. As a matter of fact, in most cases these individuals have been operating through a company. Consequently, it is important to know the process of dissolution and liquidation of a corporation and whether there are other alternatives. Remember that this process should always be the last option.
Other services
We can manage the Spanish company registration and other procedures as well on your behalf through a power of attorney. Moreover, we will prepare the Power of Attorney for you to sign at the Spanish Consulate/Embassy or at your local Notary Office. In addition, we manage the obtaining the NIE which is mandatory for the incorporation or purchase of commercial companies in Spain.
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