Setting up a company in Spain

Spain is one of the most attractive and colorful countries in Europe. Spain is one of the best countries in the world in terms of quality of life and openness to foreign nationals. There are several advantages for registering a company, opening a bank account, buying a property and obtaining a residence permit. Among the popular areas for business in Spain: tourism and the catering sector (cafes, bars, restaurants) are particularly prominent. The construction industry, which has been in decline in recent years, is now rising to a new level. As in other countries, a very promising area of business is IT.

In Spain there are several corporate forms of company registration:

• Private Limited Company (Sociedad Limitada);

• Joint-stock company (Sociedad Anónima);
• Sole Trader;
• Partnership (Sociedad Civil);
• Private Limited Company (Sociedad Limitada Nueva Empresa).

PRIVATE LIMITED COMPANY

Sociedad Limitada (SL) , the Spanish form of Private Limited Company (LTD), is the prevailing form of company in Spain and is similar to limited liability companies in other countries. The authorized capital starts at 3,000 euros and is paid in full at the incorporation stage. All companies residing in Spain are required to obtain a Tax Identification Number (NIE).

A Corporate Tax Identification Number (CIF) must be obtained to set up business in Spain. These numbers can be obtained from any regional tax office in Spain (Delegaciun de Hacienda).

KEY REQUIREMENTS FOR LTD REGISTRATIONS:

• The status and residency of the shareholders and directors do not matter;
• Foreign Directors must register with the Spanish tax authorities by obtaining a “NIE” (Foreigner Identification Number);
• There must be at least 1 director, who can be an individual or a legal entity;
• A Board of Directors is highly recommended in cases where there are different interests among the shareholders of the company, since it allows each of them to be represented in the Board;
• The size of the authorized capital is 3000 euro;
• The company must obtain a bank account in Spain;
• The company must be registered only with a valid address.

JOINT STOCK COMPANY

A joint-stock company is a highly regulated and wide-ranging entity, ideally suited to large companies listed on the stock exchange. A Joint Stock Company is established by a public act, which must be registered in the Commercial Register. The act establishing a public limited liability company and its articles of association must contain minimum information about the company to be established (e.g. name of the company, purpose and activities of the company, appointment of an administrative body, etc.). The capital of a company is divided into shares, which can be either registered or bearer, and are freely transferable. The company name is formed by the name of the company (chosen freely) followed by “sociedad anónima” or “s.a.” or “SA.

KEY REQUIREMENTS FOR REGISTRATIONS:

• The status and residency of the shareholders and directors do not matter;
• Shareholders have limited liability against debts;
• Foreign Directors must register with the Spanish tax authorities by obtaining a “NIE” (Foreigner Identification Number);
• There must be at least 1 director, who can be an individual or a legal entity;
• The size of the minimum capital of 60,000 euros;
• The company must obtain a bank account in Spain;
• The company must be registered only with a valid address.

TAXES FOR LTD

REPORTS AND AUDITS

Financial statements must be submitted within seven months of the end of the fiscal year. Six months are given to hold a shareholder meeting to approve the financial report and 30 days to file it. The books of account must be closed within four months of the end of the fiscal year. A fine of up to 60,000 euros must be paid for failure to file the financial statements on time.

COMPANY’S BANK ACCOUNT

Together with the NIE, notarized incorporation documents, power of attorney (for a representative), the authorized person must apply to any bank in Spain.

In opening of a bank account in Spain, it is necessary for the businessmen to provide identity documents, as well as the company's statutory documents, which differ depending on the form of business chosen for registration (limited liability companies are registered on the basis of a Charter, and partnerships are created on the basis of a partnership agreement). The representatives of the company must also provide additional documents, which were issued before establishing a bank account.

Qualified advisors of Key2Law can help to open a bank account in the shortest time.

WHAT IS A COMPANY REGISTRATION FEE IN SPAIN?

Company registration in Spain takes 3-4 weeks. You can find out the price of registration and other nuances of starting a business in this jurisdiction by signing a form on our website.

WHAT ISSUES MAY ARISE DURING THE REGISTRATION PROCESS?

Setting up a company in Spain can be a complex process that requires careful planning, attention to detail, and a thorough understanding of the country's legal and regulatory framework. While Spain offers many opportunities for foreign investors, there are several challenges that can make the process of setting up a company in Spain difficult.

Setting up a company in Spain can be a challenging process that requires careful planning and attention to detail. Investors may face challenges such as a language barrier, bureaucracy, capital requirements, legal representation, cultural differences, tax laws, real estate market, and employment laws. However, with proper guidance and preparation, these challenges can be overcome, and investors can take advantage of the many opportunities that Spain has to offer. It is essential to work with professionals who have experience and knowledge of the Spanish legal and regulatory framework to ensure a smooth and successful registration process. Key2Law is ready to offer you the following assistance in the setting up a company in Spain and other countries.

We have extensive experience in the procedure of setting up a company, opening bank accounts in any country and in the other ambitious regulatory questions. Our qualified advisors will provide professional assistance in setting up a company and explain the advantages and disadvantages of distinct types of activities in Spain. Similarly, we can help with the purchase and sale of existing companies in this jurisdiction.

In order to find out more information, you can use the opportunity to order a consultation on the regulation of activities in Spain from our specialists. You can contact us using the feedback form or the contacts listed on the website.