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Tax advantages company formation

Registering a company in Spain isn’t as hard as you’d think.

Registration can be completed with a minimum capital of only €3,000, as well as the appointment of a director, who is not required to live in Spain or the European Union (EU).

The registration process only takes around 14 business days and can be completed without travelling to Spain by appointing a Power of Attorney.

So what incentives and advantages do companies forming in Spain enjoy?

As well as being easily achievable – companies formed in Spain enjoy the following Government incentives:

Companies investing in employee training programs can receive at least a 75% rebate on their social security contributions for enrolled employees.

Since 2010, newly registered companies will benefit from incentives including

  1. a financial subsidy to reduce the interest on bank loans by 3%
  2. a one-time grant covering 50% of total labour costs for hiring professionals
  3. subsidy worth €4,808 for every new permanent job created.

A Spanish trading company enjoys many tax benefits:

  • All imports/exports from a Spain made within the European Union will be legally exempt from custom duties.
  • Spanish Free Zones offer resident companies incentives including i) reduced corporate tax rate of 4% ii) reduced VAT rate of 7% iii) transfer tax exemption and iv) stamp duty exemption.
  • Spanish companies do not require an annual statutory audit if i) the total assets on the balance sheet are less than €2.8m ii) annual revenue is less than €5.7m and iii) less than 50 people are employed for two consecutive years.
  • Companies with annual revenue less than €20 million are allowed to carry forward their operating losses for 18 years.
  • The Spanish Government has concluded 80 double taxation treaties with countries like Australia, China, Canada, Singapore and the United States of America to reduce withholding taxes on payments abroad.

Our Clients also prefer Spain as the destination to register a holding company in Europe because:

  • Capital gains and dividends received from global subsidiaries will be fully tax exempt, provided the shares i) have been held for one year and ii) represent either 5% of the subsidiary’s share capital or more than €6 million and iii) the distributing company is not incorporated in a tax haven.
  • A Spanish holding company does not pay withholding tax on dividends and interest distributed to a non-resident shareholder.
  • Setting up a Spanish holding company is relatively easy, provided that all shareholders are not residing in tax-haven countries.
  • Spain’s EU membership means no withholding taxes on dividend payments to other EU countries.

And, last but not least, Spain is a country that is very much on the up again and one of the fastest growing economies in Europe. Now is the time to invest!

So get in touch if you’d like to start a company in Spain.

Contact us or just start a live chat!

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