Opening a company in Spain is a process that consists in drafting the articles of association of the Spanish company, together with other necessary documents such as: the passport copies, the specimen signatures and the special forms provided by the company registration office. Some public notary procedures are required for company formation in Spain and a registered office is also mandatory for companies set up in Spain. In order to register a company in Spain, it is also important to open a bank account and hire a local accountant.

Incorporate a sociedad limitada (S.L. - limited liability company)

The most popular form of business in Spain is the private limited liability company (sociedad limitada laboral). The capital of the Spanish SL is divided into nontransferable shares and the liability of each member is limited by the contribution to the capital. A minimum share capital of EUR 3,005.06 must be deposited when set up company in Spain. All the decisions of the Spanish SL are taken by the general meeting of the shareholders which will appoint a director in order to make sure that the articles of association’s regulations are respected, prepare all the documents for the meetings and those which need to be delivered to the authorities and take all the daily decisions.

Public limited liability company (sociedad anonima)

This type of company is a form of business which requires high amounts of capital and it is also known as the joint stock company. For opening this type of company in Spain, the investor needs to have at least 60,101.21 EUR as share capital (at least one quarter of this sum must be paid up before company registration in Spain). The liability of the members incorporating a Spanish SA is limited by their contribution to the capital. The major decisions are taken, like in the case of the private limited companies, by the general meeting of the shareholders, but the daily decisions are taken by a board of managers supervised by a supervisory board (only if desired).

General partnership in Spain

This type of company is formed by at least two members with equal responsibilities and rights, since they are all considered general partners. The liabilities of the members are extended on their personal assets and, in case of company’s dissolution, those can be used to cover the outstanding claims; our team of Spanish company incorporation consultants can offer more details.

Limited partnership

Another form of Spanish partnership is the limited partnership which is formed by at least one member who is a general partner and at least one which is a limited partner, with limited liability to the extent of his or her own contribution to the capital. Only the general partner can take the major decisions and, in case it is excluded, the partnership ceases to exist.

Sole trader in Spain

If an natural person decides to open a company in Spain on his or her own, an option would be the sole trader, which is the simplest form of doing business. The business has the same entity as its owner (because there is no legal distinction between the entrepreneur and the company) and, in case of company’s dissolution, the claims can be covered with the investor’s assets. No minimum share capital is required for this type of entity and all the profits can be used freely by the user.

Incorporation procedure in Spain

The process of opening a company in Spain begins with checking the desired name at the Mercantile Register, procedure made directly at the office of the Central Mercantile Registry or via e-mail. A bank account must be open and a certificate of deposit must be received from that bank. After that, the founders must notarize the documents of incorporation.

The first effective step of Spanish company incorporation is obtaining a Tax Identification Code (Codigo de Identificacion Fiscal, CIF) from the Delegacion Provincial de la Agencia Estatal de la Administracion Tributaria.

The certificate of name reservation, the certificate of capital deposit and the incorporation deeds must be submitted with the Mercantile Registry in maximum two months starting with the date the decision of registration was taken. Once the Mercantile Registry has issued a certificate of incorporation, the announcement regarding the incorporation of the company in Spain is published in the Official Journal of the Mercantile Registry. Then the founders must legalize the corporate books and accounting books. The process is performed through an application at the Commercial Registry deposited electronically or in person.

All the companies incorporated in Spain must obtain a municipal license to open business premises process made through an application at the Departamento de Urbanismo del Ayutamiento. The process may take up to 15 days.

The company incorporation process ends with the registration of the company’s employees at the local general treasury of social security at the Tesoreria General de la Seguridad Social. This is the last step of the incorporation process in Spain.

Economy overview in Spain

Spain has a strong economy, with industries playing an important role on the European market, so those who are interested in opening a company here are advised to set their operations on the Spanish market. Besides, international trading and tourism are also of great importance in terms of economy in Spain.

The Spanish economy began to make important steps towards a fast development, especially since 2015.

Spain is ranked on the seventh place in terms of receiving foreign investments. Over 10,000 foreign companies have been incorporated in Spain and the government is still looking for different incentives in order to attract even more investors from abroad. The main investors willing to open companies in Spain so far have been from the Netherlands, France and UK.

The main fields on which the Spanish economy is built are: processing foods, textiles, footwear, petrochemicals, electronics, steel and automobiles, aerospace industry and tourism. Foreign investors starting companies in Spain tend to be attracted by the construction sector, which has reported important results at the level of 2016. Other investors arrive in Spain with the intention to set up companies that activate in sectors such as manufacturing, finance and insurance, scientific activities or electrical energy supply. Madrid and Catalonia attract the most foreign investments in Spain.

It is important to know that, in 2014, the foreign direct investment in Spain were situated at a level above the average one met throughout the European Union.

Another important aspect of the local economy is that most of the companies set up here, more exacly, 90%, are small companies, with less than 10 employees. The Spanish small and medium companies are very important for the local economy, as they provide three quarters of the jobs available in the private sector.

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