Spain is rightfully considered one of the most open to business and investment European countries. Any foreign citizen can establish a company on its territory by choosing the organizational and legal form that suits him: S.L. (LLC) or S.A. (AO). It does not matter whether the founder is a citizen of the country or a resident, or is in non-resident status – the rules for registering a company in Spain are the same for everyone. The only additional step a non-resident must take is to obtain an NIE number, which is both a personal and tax identification number.
Do I need a residence permit to register for a company?
A residence permit in Spain is not a prerequisite for establishing a company. A foreign citizen arriving in Spain on a multiple entry visa, or living here based on a residence without the right to work, will appear in the statutory documents as a founder (or co-founder) and will receive full right to receive dividends based on the results of the company’s work (with the corresponding payment of income tax non-residents (IRNR) or personal income tax (IRPF)). The main managerial functions will be assumed by a hired manager from among the citizens of Spain or foreign residents who have the right to work.
Registration of a company in Spain: choice of organizational and legal form
The legislation provides for various forms of legal entities: from joint-stock companies to limited liability companies, from cooperatives to partnerships, etc. We will consider the most popular organizational and legal forms.
Joint Stock Company in Spain – Sociedad Anónima (S.A.)
A joint-stock company in Spain can be opened even by one founder. The minimum share capital is € 60,101.21 and at the time of registration, at least 25% of each share must be paid up. To obtain additional funding, joint-stock companies in Spain are entitled to issue bonds and other types of negotiable securities. The joint-stock company is responsible for its activities within the property of the company.
LLC in Spain has two additional varieties:
The new company – LLC (S.L.N.E.). The main differences are:
- Accelerated registration procedure (thanks to electronic document flow);
- Limitation on the amount of the authorized capital (from € 3,012.00 to 120,202.00);
- Inability to choose an official name (the name and surname of the first founder in alphabetical order is assigned as the name);
- The number of founders cannot exceed 5 people.
Sole proprietorship limited liability company – Sociedad Limitada Unipersonal (S.L.U.): opens with one sole founder
As in the case of a public limited company, a limited liability company in Spain is responsible for its activities within the property of the company. The minimum share capital is € 3,005.06 and must be paid in full at the time of registration.
Opening a company in Spain: terms, stages, and formalities
On average, company registration in Spain takes 2 to 6 weeks. It is important to remember that many types of activities require obtaining the appropriate licenses. The timing and procedure for obtaining licenses must be consulted in advance with an assessor – a specialist in accounting and tax accounting who will conduct the business of the company.
The opening of a company in Spain takes place in the following order:
Stage 1
Choice of the official name of the legal entity (except S.L.N.E.). The application is submitted to the Central Commercial Register: it includes several variants of the name, arranged in order of preference. The registry checks for uniqueness and makes a decision. The waiting time for a response is from 2 days to 2 weeks.
Stage 2
Opening a bank’s current account in any commercial bank in the name of a legal entity and placement of the authorized capital in the required amount.
Stage 3
Preparation of constituent documents of the company and their notarization.
Stage 4
Payment for notary services and tax on documented legal acts – Impuesto sobre los Actos Jurídicos Documentados (IAJD).
Stage 5
Registration of a legal entity in the Commercial Register (Registro Mercantil) and payment of the state fee.
Stage 6
Registration of the company with tax authorities and registration of a tax number (N.I.F.), registration of founders and/or manager in the social insurance system as individual entrepreneurs, registration of employment contracts with employees.
Stage 7
Acquisition of official books of accounting, books of complaints and suggestions, ordering a company seal.
Step 8
Necessary formalities at the municipality level: obtaining a license to carry out construction and/or renovation work in the company’s office, its production, warehouse, or commercial premises, obtaining a license to open and operate (Licencia de Apertura).
Outcome
As you can see, the registration of a company in Spain follows a strictly structured scheme and does not differ in bureaucratic complexity. With the development of electronic document management, it became possible to carry out many administrative formalities via the Internet (for example, registration with the tax authorities and the Social Insurance Fund).
