Company Formation in Spain

Company Formation in Spain

Forming a company in Spain involves several key steps and requirements that are important to understand for anyone looking to establish a business there. Here’s an overview of the process:

1. Choose the Type of Company

  • Sociedad Limitada (SL): Similar to a Limited Liability Company (LLC) in other countries. It’s suitable for small to medium-sized businesses.
  • Sociedad Anónima (SA): Similar to a Public Limited Company (PLC). It’s more appropriate for larger businesses with a minimum capital requirement.

2. Obtain a Certificate of Uniqueness for the Company Name

  • This is done by applying to the Mercantile Registry (Registro Mercantil) to ensure your desired company name is not already in use.

3. Open a Bank Account and Deposit Initial Capital

  • For an SL, the minimum capital requirement is €3,000, and for an SA, it’s €60,000. A certain percentage must be deposited into a bank account opened in the company’s name.

4. Draft the Deed of Incorporation

  • The deed of incorporation includes details about the company, shareholders, and management structure. It must be signed by all founding members in front of a notary.

5. Obtain a Tax Identification Number (NIE)

  • All company directors and shareholders who are non-residents must apply for a Spanish tax identification number (NIE).

6. Register with the Mercantile Registry

  • Once the deed of incorporation is signed, it must be submitted to the Mercantile Registry for registration. This step legalizes the company.

7. Obtain a Corporate Tax ID (CIF)

  • After registration with the Mercantile Registry, you can apply for a Corporate Tax Identification Number (CIF) from the Spanish Tax Agency (Agencia Tributaria).

8. Register for Social Security

  • The company and its employees must be registered with the Spanish Social Security system.

9. Obtain Necessary Licenses and Permits

  • Depending on the type of business, various local licenses and permits may be required to operate legally.

10. Comply with Data Protection and Other Regulations

  • Ensure compliance with GDPR if handling personal data and other relevant Spanish and EU regulations.

Additional Considerations

  • Professional Advice: It’s advisable to seek guidance from legal and financial professionals experienced in Spanish corporate law to navigate the process smoothly.
  • Taxation: Be aware of corporate tax obligations, VAT registration, and other tax considerations.
  • Employment Law: If hiring employees, familiarize yourself with Spanish labor laws and employment contracts.

Starting a business in Spain can be a rewarding venture, but it’s important to carefully follow all legal and procedural requirements to ensure compliance and set a solid foundation for your business.