Choose Spain 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.