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The purpose of this article is to provide you with an introduction to what the undertaking of founding a company in Spain entails.

For a company or an individual to contemplate the enterprise of entering a (new) market, always supposes the necessity of taking into account a large variety of aspects, which can appear overwhelming. In case of the aim being the foundation of a company in Spain, there is no need to be fearful of a lengthy and complicated process, since the whole procedure is quite simple and the way to a working company is shorter than you would expect.

The first question to consider if you are interested in setting up a company in Spain is what legal entity the company should have. There are different possibilities to enter the Spanish business market. To set up a business in Spain, you can start as a new company, like an acquisition, as a joint venture, as a Spanish branch, as a representative office, or as a self-employed person.

In order to find the best way to either start a new company or expand the market of an existing project, it is necessary to consider the objectives one intends for the entity to achieve and what possible development might happen in the future.

This article´s main focus is on the foundation of a limited liability company, while the process explained hereinafter is mostly the same, should the aim be to found a public limited company.


Limited companies in Spain

With regard to limited companies, there are several types, but the most common form is the sociedad Limitada or S.L. Hereinafter we will provide you with an overview of the steps to take in order to set up a limited liability company in Spain.

Before you can start the process of setting up a business in Spain, all resident and non-resident foreigners with financial affairs in Spain must have a foreigner’s tax identification number or NIE. The NIE is essential for any fiscal transactions in Spain.

The first step in setting up your SL is choosing a company name and will obtain a certificate (called a no-name coincidence certificate) from The Mercantile Registry to verify that the company name you want to use is not already taken, so you can choose it for your new company.

Next, you have to apply for a CIF or NIF (tax identification code) for the company.

Once you have obtained the tax identification code and the certificate of no-name, the next step is to open a bank account for the company.

Into the aforementioned bank account EUR 3,000, the minimum authorized share capital for a limited liability company, has to be deposited. Evidence of payment can be obtained in the form of a bank certificate. Said certificate will have to be provided for the act of incorporation of the company before the notary public.

The Notary

Now, with the three previous documents, you can visit a notary to apply to be appointed as the company founding director (administrator), as well as prepare the company constitution. You can arrange a local notary appointment to sign the deed of incorporation. You can find the nearest one in your area at www.notariado.org. This step lasts about one to three days depending on the notary.

You must supply the notary with original documents and photocopies of:

  • tax form 036,
  • your certificate from Registro Mercantil,
  • NIE, and
  • the evidence of payment in the bank.

AEAT / Generalitat

With the original deed of incorporation obtained from the notary, you should then go to the Local Government Tax Authority (or AEAT) to register the deed. This step was previously subject to a stamp duty of 1 percent of the initial share capital; however, currently this 1 percent has been removed although the formality must still be fulfilled. The deed will be stamped certifying this fact. This step should not take longer than two hours. Do not forget to take with you your original documentation and photocopy of the deed and your NIE.

RM – Registro Mercantil

The deed has to be taken to the Registro Mercantil where it will be registered in the Spanish Register of limited companies. It should take no less than 15 days until it is registered and original documents are returned. When you collect the original deed it will bear a certificate from the Mercantile Registry that the company is already registered.

AEAT – Agencia Estatal de la Administracion Tributaria

The next step to register your trading company involves another visit to the tax office. This time it is to obtain the permanent Corporate Tax Identification Number (CIF) at the Hacienda after the completion of the incorporation process.

Newly incorporated companies must use the 036 forms used to request a tax identification number, to describe their business activity and other circumstances of your business. Do not forget the original and photocopy of the deed and NIE.

TGSS – Tesoreria General de la Seguridad Social

The last step of the registration process as the company’s director is for social security and occupational accident insurance purposes.

You will have to comply with certain procedural formalities at the local office of the Ministry of Labour and Social Affairs (or TGSS).

Although there are different options, usually the director is the person registered as autonomo. The monthly payments for autonomos are about EUR 235. You will need to do this step using original and photocopy of a deed of incorporation, NIE, 036 forms and form TA 0521. You can obtain this last form at www.seg-social.es.

Obviously, there are many legal issues that we have not considered. But we suggest you contact a professional such an economist or lawyer to help you throughout the process to avoid mistakes. However, if you have a clear idea about how you want to work, you can set up your company by following the previous steps.