Choose Spain For Your NGO
Why Spain is the Right is the Place For Your NGO
Spain has an attractive setup for Non-Governmental Organisations (NGO). As social initiative or humanitarian-focused mission, you can establish your operations under two different legal structures: a foundation or an association.
A foundation is an organisation that receives assets and funding from third parties with the agenda to assign them to wide variety for non-profit purposes.
An association is an organisation that’s created on a non-profit basis by three or more people for a general interest.
While these entities have similarities such as being independent of public administration and not commercially profitable, they set up in different ways.
A foundation requires an initial endowment of €30.000 and must be created in the presence of a Notary in the form of a Public Deed.
An association, however, does not require an initial donation or the services of a notary. Typically, n association requires a document known as “Founding Act”, which must be must be registered with the National Registry for Associations. Sometimes they need to be registered regionally, depending on where the entity is.
Each has different benefits. Firstly, foundations have tax advantages as they are exempt from Transfer Taxes and Stamp Duty. They may also be exempt from Business Activity Taxes, Real Estate Taxes, Wealth Tax, Inheritance Tax and other taxes. Foundations also are eligible for grants and subsidies, and, if they are related to a company, their image and positioning benefits.
Associations are simpler to create because there’s no initial donation and they are considered to be economically independent, so they can rely on a wider variety of funding sources.
Both foundations and associations can develop their own economic activities and generate income but these must be considered surpluses – not profit – to be reinvested into the entity to fulfil its purpose.
What is the process to establish an NGO?
Foundations need to follow the steps below:
- Create bylaws.
- Apply for the negative certification of the denomination.
- Request a provisional CIF.
- Plan a budget and financial report.
- Deposit a minimum of €30,000 into a bank account.
- Sign the public deed of incorporation in a notary present.
- Go to the Protectorate to check that the foundation complies with the legal requirements. The Protectorate will issue a mandatory and binding report on the suitability of the foundation’s aims and endowment.
- File with the Register of Foundations and regional and municipal registers, if necessary.
- Receive certified documentation from the Protectorate and the Register of Foundations to commence operations.
Association follow these simpler steps:
- Host a founding meeting of the association to draft the Articles of Association and approve the Founding Charter.
- Identify the correct Register to file with, whether it’s national or otherwise. Prepare and submit the necessary the documentation for the corresponding register of associations.
- After submitting all the documentation to the register, keep a copy of the application as proof of submission. The registry will reply within three months and, if they don’t reply within this period, the application for registration is deemed to have been accepted.
How can a lawyer help me?
The right lawyer will guide and advise you on the best approach for your NGO.
Lexidy will draft documents, like bylaws or the Founding Act, as they be very long and complex. Our lawyers will also give you a comprehensive overview of the legal requirements covering the taxation of donations, the treatment of personal data of members and volunteers.
Incorporating an NGO without a lawyer can lead to costly mistakes , particularly during its creation as unforseen issues can emerge. You need to focus on the objectives that you want to develop and challenges you want to solve.
¨We will be with you each step of your journey.¨
What are the requirements?
The requirements of having a foundation are:
- Have a social purpose. The entity must seek to benefit a generic group of beneficiaries, and cannot have as its purpose the benefit of the private interests of its members.
- It must be non-profit making. The positive result of the economic resources must not be distributed among the members of the body but reinvested to be used for the fulfilment of the aims of the foundation. The fact of being non-profit-making should not be confused with the fact of not needing economic resources, as these are fundamental for organizations to be able to fulfil their aims.
- To have a minimum financial endowment of €30,000 (if it is less, a viability report must be drawn up).
- Must be set up in front of a notary in the form of a public deed.
As far as the requirements for associations are concerned, there are not as many as for foundations. Thus, the main requirements are:
- It must have a Foundation Act, with specific information such as the identification of the promoters, and Statutes, which will dictate how the association will operate.
- As a second requirement, it must be registered in the corresponding registry, either at the regional or national level.
- Lastly, the Founding Members of the Association must be residents in Spain.
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TraineeFrequently Asked Questions
NGOs are private, not for profit organizations that arise from civil and initiatives. They are usually linked to social, cultural, development or other projects.
An IGO is an agreement between the partners where several persons jointly pool money, property and other assets to achieve a common purpose, which must be profitable for all and in accordance with the contribution of each party.
They provide public services without replacing the State. They involve different members of a community without receiving any financial gain. Everything they receive is for the welfare of the communities where they carry out their projects.
Both the association and foundation entities can develop economic activities as long as they are related to their main purpose. Any income that’s generated must be reinvested in actions that are related to objective of the organisation.
For an association, the General Assembly controls the organization. They elect a Board of Directors, which must have the structure determined in the statutes and generally includes a president, secretary, a treasurer and members.
Conversely a foundation’s Board of Trustees has all administrative and governance powers. It’s composed of people, natural or legal, who were initially designated by the founder(s). Any renewal of the Board must follow the rules established by the founder(s) in the statutes.
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