Company Formation in Spain: Frequently Asked Questions

Company Formation in Spain: Frequently Asked Questions

If you are looking to set up a company in Spain, there are a range of questions that you will likely have. This blog post will provide answers to some of the most Frequently Asked Questions (FAQs) about Spanish Company Formation. We will cover topics such as the different types of companies available, the minimum capital requirement, the procedures for registering a company and more.


Company Formation in Spain

If you are considering starting a business in Spain, it is important to understand the process of Spanish company formation. Spain offers a favorable business climate with a stable economy, strategic location, and access to a large market.

Whether you are a foreign investor or a local entrepreneur, setting up a company in Spain can be a rewarding and lucrative opportunity. However, the process of company formation can be complex and time-consuming, involving several legal and administrative requirements. Below you will find frequently asked questions to clarify your doubts.

Company formation in Spain

What types of shareholders’ companies can be formed and recognized in Spain?

The two main types of companies that are recognized in Spain are the public limited liability company, which is called the Sociedad Anónima (S.A.), and the private limited liability company, which is called the Sociedad Limitada (S.L.).

What is the difference between a Sociedad Anónima and a Sociedad Limitada?

The main difference is that the Sociedad Anónima Company is most appropriate for large companies. In contrast, the Sociedad Limitada Company is a better fit for shareholders that do not need a large amount of capital. However, there are many other differences between the SL and SA as well.

Can I set up a company as a sole shareholder?

Yes, a single person may establish a Spanish firm, and you can be the company’s only director, administrator, and shareholder.

What is the minimum share capital required to incorporate a company in Spain?

The minimum share capital will depend on the type of legal entity you adopt. For the Sociedad Anónima company, the minimum share capital is € 60.000, while the Sociedad Limitada costs € 3.000.

Can I start a different enterprise in Spain through a limited liability company?

Yes, a limited liability company can accommodate almost any type of investment. However, sectors such as pharmaceutical, fund management, insurance, or banking must be carried out through a Sociedad Anónima. Please contact us for help with your incorporation.

Do I have to be a Spanish citizen to incorporate a company?

No, foreigners can incorporate a company in Spain. However, you will need a unique identification number (NIE) to carry on with the process.

How long does it take to incorporate a company in Spain?

Incorporating a company in Spain usually takes 3 weeks. However, it depends on the complexity (i.e NIE requirements and shareholder’s nationality). Also, the timing of the case, bureaucracy, appointments, and validating documents can increase this quite a bit. We can help you speed up this process and reduce your waiting time.

Do I need an address in Spain?

Yes, all companies need a registered address in Spain. If you don’t have one, SpainDesk can provide you with a service address. This is for collecting mail from the tax authorities. We can help you get a post box address, that will forward all your mail to another place without you having to be there physically.

Can I form a company in Spain under a parent company?

Yes, you can, we can register this for you in the by-laws. We can also assist you in reducing your tax burden by advising on the best approach to move funds from the parent firm to the new Spanish business.

What type of company formation is best for a foreign investor?

The private limited company, also known as the Sociedad Limitada (S.L.), is a good option in most cases since it can be run through a foreign country.

Are there any restrictions for foreign investors in Spain?

There are very few restrictions for foreign investors in Spain. However, non-European residents are not permitted to invest in certain critical sectors, such as telecommunications, without a special permit. The labor market, on the other hand, is subject to greater regulation. The maximum working week is 40 hours, and all employees are entitled to six weeks of paid vacation a year.

How old do you have to be to form a company in Spain?

A person must be 18 years old to do a legal Spanish company registration.

Company formation in Spain

What languages does the Spanish government require me to use?

In general, the Spanish government communicates with companies in Spanish. It is, therefore, a good idea to have someone take care of your business in Spain, if you are not familiar with the language.

Do I have to come to Spain for my new company?

No, this is not necessary. We can schedule a meeting with the Spanish consulate in your country, and you’ll be able to sign for the company at a notary in your home country.

What is the procedure for opening a bank account under my company?

A certificate of registration with the Commercial Registry is required to open a business bank account.

How easy is it to recruit staff in Spain for my company?

Recruiting staff and employees is not as easy as in some other countries. It can be difficult to find the right people, and the amount of paperwork is quite extensive compared to other countries. The laws for recruiting and firing staff also make this process very complicated and time-consuming. Payroll rules are different in Spain from other European countries.

What documents will be issued to me after setting up a company in Spain?

The Spanish Mercantile Registry will issue a certificate of incorporation and a document confirming the identity of the company’s shareholders.

What are the company statutes and can SpainDesk take care of them?

The company statutes or the memorandum of association is the internal rule book for your company. It includes how shareholders, directors and board members are selected and the duties, rights and privileges each holds. It also includes rules for taking board resolutions and managerial decisions. We can sign the company statutes at the notary for you through the power of attorney.

Do I have to open a company in Spain if I already have a foreign company?

If you are doing business in Spain, you will probably want to form a company in Spain. It can be a branch of a foreign company or a new Spanish business.

What is the best way to find out more about Spain’s company registration?

Our corporate lawyers are here to help you with your questions. They can answer any questions you might have and give advice on the best way to proceed. We recommend that you consult your lawyer before doing a Spanish company registration, and reach out for help if you encounter any difficulties before starting up.

Do I need a registered office for my company formation in Spain?

Yes, a registered office is a requirement in Spain. This can be an address or a PO Box number and is the place where official notifications for the company are sent to.

What are the main issues I can run into when forming a company in Spain?

Going through the incorporation process for a new company in Spain can be a complex process. Below are some of the issues you can face when forming a company.

  • The complex process of incorporation can be confusing without the help
  • Spanish bureaucracy can be time-consuming
  • Not being properly registered in the mercantile register
  • You need to perform the steps in the right sequence

What are the main requirements when setting up a company in Spain?

The company law stipulates that:

  • You will need to have company statutes
  • You will need an address in Spain
  • You will need to go through a notarial procedure
  • You will need a company deed
  • You will need a company director
  • You will need a share capital, in the case of a Spanish SL this is 3.000 euro

Need help with your company formation in Spain?

If you want to start your company in Spain, we offer a full range of services to help you from the beginning, including company formation, business taxes and legal advice.

SpainDesk can help you with all the paperwork and procedures involved in setting up your business in Spain. We provide ongoing support and advice as your business grows. Contact us today

Disclaimer: Information on this page may be incomplete or outdated. Under no circumstances should the information listed be considered professional legal or financial advice. We highly recommend seeking guidance from a legal or financial expert if you lack extensive knowledge or experience dealing with any of the procedures outlined in these articles.