Company in Spain

General information

Tax rate

Time of establishment of the company

Minimum capital

Company incorporation in Spain

With its position as the fifth European economic power, Spain has focused its policy on foreign trade these last ten years and has launched a fiscal and monetary policy to fight against unemployment and inflation. With Madrid as its capital, growth in Spain is heavily oriented towards real estate expansion but also high-tech industries.

The structure of the Spanish economy is that of an industrialized country: the tertiary and secondary sectors alone represent 96% of GNP.

Types of companies

There are several types of businesses for foreign investors:

Limited liability company (SL)

Public limited company (SA)

• Partnership or limited partnership

•Common ownership- two or more owners with unlimited liability

•Branch or representative office

Limited liability companies (SLs) are the most common corporate status of medium and large businesses. They are usually used by foreign companies to become established in the country.

Before you start your business, you must request a Spanish identification number called NIE. This document can be provided by the Spanish Embassy in your country of residence before arriving in Spain. It takes 8 weeks to get the NIE, but if you request it from Spain, it only takes five weeks.

What are the requirements for creating a company in Spain?

Tax system

Spanish companies are heavily regulated, especially large companies. The standard corporate tax is 30%. Companies whose annual turnover is less than € 8 million pay 25% on the first 120,202 € in profits.

Under EU law, the free movement of capital is the rule.

Foreign investors are offered a wide range of financial incentives in Spain. In particular, tax deductions for R&D spending or environmental protection and EU subsidies in certain regions or economic sectors.

Accounting

In accordance with standard practices in the EU, companies must register and submit annual accounts to regulatory authorities. Annual audits are required for larger companies.

Tax rate

• Income tax: 30% • Tax on capital gains: 30% • Tax on royalties: 24% • Tax on interest: 18% • Income of foreign companies: 30% • Tax on dividends: 18% • VAT: 16%

Minimum capital

3,600 € fully paid at creation

Shareholders

A minimum of one associate who may also be a director

Foreign shareholders

Yes

Foreign holding

Yes

Legal obligations

Optional annual financial audit

Deadline

4 to 5 weeks from the receipt of all documents pertaining to the company’s creation. 1 week for VAT registration

Headquarters

Business address, telephone transfer, fax, and mail Possibility to have a physical office (prices vary depending on demand)

Accounting

Mandatory annual financial report, schedules, and management reporting, based on an estimated number of monthly bills and a forecast of annual turnover.

Company registration procedure

Taxes and finances

Local labor law

Other information