How to set up a company in Spain
Limited company (S.L. or sociedad limitada) is one of most common company forms in Spain. Features of a limited liability company are the following:
- The assets of the company are divided from the assets of the individual. This means that if something goes wrong with the company, such as a large compensation or fine, the personal assets are not implicated. This allows for better risk control.
- May apply to multiple shareholders in joint stock
- Low registration capital: currently, SL can be established with a registration capital of 1 euros (altough 3.000 euro is a common standard).
- A limited company helps to improve the business image compared to a self-employed business.
In this article you will find 8 small steps to create a limited company (S.L) in Spain, which we hope will be useful for you.
1. Register of the company name
To register your company name, you must go to the Spanish Central Commercial Register and apply for a company name certificate. This is to prevent your chosen company name from being duplicated by other companies.
A fee of about 20 Euros is required.
When applying for a company name certificate, you can provide five company names. If the first company name is already registered by someone else, the second one will be selected. And so on. All rights reserved .
2. Opening a bank account with a registered company name (can be skipped)
Once you have obtained the company name certificate, you can open a bank account in the name of the company to be established and deposit the registered capital (e.g. €3.000). Although the registered capital can be higher, 3.000 Euros is the choice of most people.
The bank will issue a certificate of deposit of the above mentioned amount, which must be presented later at a notary.
Nevertheless, the law now allows the possibility to set up a company before depositing the company’s registered capital in the bank. Therefore you can choose to skip this step and wait for the establishment of the company before opening the account.
3. Signing of the incorporation deed
All partners or shareholders (personally or by representative) need to go to any notary public to sign a notary deed of incorporation.The following documents must be providedalong with the signing of the notary certificate :
–Articles of association or bylaws Estatutos Sociales). The Articles of Association are a set of rules that govern the company and contain the basic information about the company and how it is managed. Usually, if there are no special requirements, it is sufficient to use the template provided by the notary.
-Certificate of the company name(Certificación negativa del registro mercantil central)
-If any, certificate of deposit of registered capital.
-ID or passport of all partners of the company.
4. Registration with the tax office and application for a provisional tax number (NIF, also known as CIF ).
After signing the notarial certificate, the legal representative of the company needs to go to the tax office and apply for a company provisional tax number (NIF provisional). A tax ID number is the equivalent of a company’s ID number.
5. Registration in the Commercial Registry
The next step is to register with the Commercial Registry. The following documents are required:
– Notary Deed of Incorporation (Inscripción en el Registro Mercantil )
– Certificate of company name (i.e. certificate of not being renamed with another company)
–Provisional tax number NIF.
6. Obtaining a permanent tax ID number (NIF definitivo )
After you have completed the steps above, you can go back to the tax office and exchange your NIF provisional for a NIF definitivo.
Once you have received your permanent tax ID number, you have completed all the steps of incorporation.
