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How to incorporate your LLC in Spain

A comprehensive guide for non-residents


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Starting your own business in Spain is a straight forward and clearly structured procedure. For foreigners, there are no additional permits required, nor is there a need to be listed as co-founders with Spanish citizens or to have a residence permit.


How to incorporate your LLC in Spain and start a business in Spain as a non-resident


Can a non-resident start a company in Spain? The Commercial Code allows for various types of commercial and non-commercial companies to be established in Spain, without distinguishing between citizens and non-citizens.


Foreign founders without a Spanish residence permit must obtain a NIE number (Número de Identificación de Extranjeros) from the police as the first step in how to incorporate your LLC in Spain. This serves as a unique identifier and tax number. In contrast, Spanish citizens and residents receive similar numbers at birth or upon gaining citizenship or residency. Non-residents also require this number if they own taxable property in Spain.


Choosing the organisational and legal form of a company


The most popular company types are Sociedad Limitada (S.L.) or Sociedad de Responsabilidad Limitada (S.R.L.), analogous to Limited Liability Companies (LLCs). Sociedad Anónima (S.A.) is comparable to a Joint Stock Company (JSC).


A single founder can establish a company, labelled as “Unipersonal” - Sociedad Limitada Unipersonal (S.L.U.) or Sociedad Anónima Unipersonal (S.A.U.).


The minimum authorised capital is 3,000 € for LLCs and 60,000 € for Joint-Stock companies.


Preparations for opening a company in spain


Typically, only large companies in Spain manage accounting and HR internally. Small and medium-sized businesses often delegate these tasks to external specialists or consulting firms.


It's crucial to seek advice on tax minimisation, compliance with labour laws, necessary licenses, founder’s loans, and international transactions.


Steps to start a company in Spain


1. Obtaining a NIE Number


The first step for non-resident founders without a Spanish residence permit is to obtain a Número de Identificación de Extranjeros (NIE). This unique identifier serves as a tax number and is essential for tax and property registrations.


2. Deciding on the company type


In Spain, the most common types of companies are the Sociedad Limitada (S.L.) and Sociedad Anónima (S.A.), akin to Limited Liability Companies (LLC) and Joint Stock Companies (JSC), respectively. A single founder can establish a company, designated as either Sociedad Limitada Unipersonal (S.L.U.) or Sociedad Anónima Unipersonal (S.A.U.). The minimum share capital is €3,000 for S.L.s and €60,000 for S.A.s.


3. Engaging professional services


For accounting, tax, and personnel management, most small and medium-sized businesses in Spain rely on external consultants (asesor/asesoría). These professionals handle legal entity registration, tax and payroll records, employment contracts, and annual reporting.


4. Pre-opening consultations


Prior to opening, it's advisable to consult on tax minimisation, compliance with labour laws, required licenses, founder's loans, and international transactions.


5. Brand name registration


The process starts with registering the company name with the Central Mercantile Register (Registro Mercantil Central). This involves submitting up to five name options, with one eventually being approved.


6. Opening a bank account


With the NIE number and approved company name, the next step is opening a corporate bank account. The required share capital (100% for S.L. and 25% for S.A.) must be deposited before notarising the statutory documents.


7. Notarising the Company Charter


The Company Charter, detailing the company's structure, objectives, legal address, and share distribution, must be notarised. Following notarisation, the documents are sent to the local Commercial Register.


8. Tax and Social authority registration


Concurrently with Commercial Register registration, the company must be registered with tax and social authorities, obtaining a Número de Identificación Fiscal (NIF) and registering as a VAT payer. The company manager also needs to register with Social Security.


9. Finalising additional formalities


This stage includes obtaining a Complaints Book, ordering a company stamp, installing fire extinguishers (except virtual addresses or coworking spaces), and, if necessary, acquiring business operation licenses from the local City Hall.


Conclusion


Upon completion of these steps, the company can commence operations. It's important to remember that in S.L. and S.A. companies, liability is generally limited to company assets, except in cases of illegal activity or negligence by the management.


Key Considerations

  • Non-residents must appoint a manager with the right to work in Spain.

  • Regular consultations with professional advisors are crucial for legal and tax compliance.

  • Timeliness and accuracy in documentation and registration are essential for a smooth incorporation process.

This manual serves as a foundational guide for establishing a business in Spain, providing a clear path through the intricacies of the incorporation process.



 

This article provides a step-by-step guide for non-residents interested in starting a business in Spain. For more detailed assistance and to leverage our extensive network for expedited market entry, consider consulting with our team. We specialise in guiding foreign scaleups through the intricacies of the Spanish market. Have you encountered any specific challenges in other markets? We're curious to learn about your experiences and how they might align with the services iBerotech offers.


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