Company Formation in Spain
Updated on Friday 04th February 2022
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BridgeWest provides company formation in Spain. Our assistance includes: drafting the articles of association (necessary for the company incorporation in Spain); the articles of association of the Spanish company can be signed through power of attorney (the same applies to public notary proceedings, a step required by the Spanish law).
Drafting all other documents required for the incorporation of the Spanish company; the documents needed to open a company in Spain include: specimen signatures, special forms provided by the Company Registration Office in Spain, passport copies etc. We can also help in arranging public notary procedures (the procedures for incorporating a company in Spain have to be done through a Spanish public notary).
Our team can also provide a registered office in Spain for your company (if you need this service too). To open a company in Spain, a registered office is required, which may be any address where the Spanish company declares to have its headquarters. The registered office will be public. Setting up a bank account for your Spanish company is another service we provide.
This refers both to an initial share capital account as well as a current bank account after the company is formed. We can also help in recommending an accountant in Spain. Accountancy services are recommended for any new business registration in Spain. Our company formation team in Spain can provide assistance for the formation of various types of companies.
Sociedad Limitada (S.L. - limited liability company) - this type of Spanish company can have one shareholder and one director and must maintain a local address (office) and a minimum share capital of EUR 3,000. Another legal entity available here is the Sociedad Anónima (S.A. - joint stock company) - this type of Spanish company can have one shareholder, at least one director and must maintain a local address and a minimum share capital of EUR 60,000.
The Spanish branch, subsidiary or representative office - any foreign company is able to set up branch entities in Spain. These can be set up as separate entities from the parent company (Spanish companies having the foreign company as shareholder) or extensions of the parent-company in Spain.
What are the incorporation procedures required for foreign investors in Spain?
As a foreign investor who will open a company in Spain, the incorporation steps will mostly be similar with the ones that local businessmen have to follow and which can slightly differ based on the company type selected for incorporation. However, given the fact that foreign investors are not residents in Spain, they will have to complete additional steps, in order to be able to register the company here.
One of the required procedures is to obtain a tax identification number for foreign investors – the type of tax identification number that will be issued will depend on the legal status of the applicant – foreign investor who is an individual or foreign investor who is a company.
According to the Invest in Spain, a platform working under the Ministry of Industry, Commerce and Tourism, the tax identification number for a foreign individual will be the same as the Foreign Identity Number, which can be obtained from the Directorate General of the Police and Civil Guard. For foreign legal entity, the tax identification number is obtained following a more complex procedure, started by submitting a form, and which is issued by another institution, the Spanish State Tax Administration Agency.
After this step for company formation in Spain is completed, the investor who wants to set up a business can address to the Entrepreneur Service Point, an online platform useful for more registration steps, as follows: the submission of the Single Electronic Document, the reservation of the company name (by submitting up to 5 proposed trading names with the Central Mercantile Register), and the preparation of the deed of incorporation.
The next step is to contact a local commercial bank for concluding the steps for opening a corporate bank account. This is a necessary step for company formation in Spain as well, as the corporate bank account is necessary for depositing the minimum share capital selected for the legal entity.
The next steps are concluded through the assistance of a public notary and we invite you to address to our team of consultants in company registration in Spain for advice on the documents you must prepare in order to be analyzed and signed by the public notary. Please mind that our team can only prepare the papers required in this sense, as they can only be concluded with the assistance of the public notary, who is the sole authorized entity to handle specific incorporation procedures.
What are the main taxes charged to companies in Spain?
All companies are charged for the income they obtain from commercial operations in Spain. The taxation system can vary based on the nature of the company (corporate body or partnership/sole trader) and here, the tax law distinguishes between corporate taxation and personal taxation.
Investors who have concluded the steps for company formation in Spain for a limited liability company or a joint stock company will be charged with the taxes applied for corporate bodies, which refer to legal entities that are considered separate legal structures than their founders and which have their own legal personality (with specific rights and obligations prescribed by their founding papers). Some of the basic corporate taxes are the following:
- the corporate income tax – in 2022, the tax is applied at a standard rate of 25%;
- reduced corporate tax – charged at a rate of 15% for newly founded companies;
- the valued added tax – imposed at the standard rate of 21% (there are also reduced rates of 10%, 4% and 0% for specific goods and services);
- the withholding tax – charged at rates of 19% of 24%, depending on the tax treaty signed between Spain and other states;
- Spain also applies the tax rates, benefits and deductions prescribed by the double tax treaties, which are currently signed with 94 other states.
Please mind that certain Spanish regions enjoy a different tax regime, where the tax rates are lower or there are certain tax exemptions applied to businesses. This is the case of the Canary Islands; if you want to start the process of company formation in Spain in a Spanish region with a more advantageous tax regime, please address to our team for advice on the specific incorporation procedures that can apply in these regions. Our team can also help you find a suitable office space in such regions, including in Melilla or Ceuta.
BridgeWest is also able to offer ready-made Spanish companies and VAT registration. Please contact us for more information regarding how to open a company in Spain and prices. For company formation procedures, you may contact a local lawyer. Our team can assist in the process of obtaining business visas and residence permits.