How to set up a limited company in Spain.
Find out the steps you have to follow to create a Limited Company step by step, from the registration of the company name to the registration in the Commercial Register or Registro Mercantil, including the opening of the bank account, the drafting of the Articles of Association, the public deed of incorporation or the tax formalities.
If this is your case and you have decided to start your activity as an individual entrepreneur and set up your own company (Ltd in Spain, which is called Sociedad Limitada in Spanish), you must be clear about the obligatory steps to create a Limited Company, which consist of the 7 steps to create an SL (Limited company in Spain) explained in this article.
List of steps to follow for the creation of an SL (Ltd in Spain):
- Register the name of the company.
- Open a bank account in the name of the company.
- Drafting the Articles of Association.
- The signature of the public deed of incorporation.
- Submitting the forms at the Spanish Tax Office.
- Registration in the Mercantile Register in Spain.
- Obtaining the definitive N.I.F. (tax identification number)
1. Register the name of the company.
To register the name of your company, you must go to the Central Mercantile Register and request the certificate of company name, i.e. the document that certifies that the name chosen for your company does not coincide with that of any other existing company.
In order to obtain this company name certificate, you will need to present the document containing three possible names for your company. We recommend that you try to find an original name or a name composed of several words, due to the large number of names already registered.
Once the certificate has been issued, the name will be reserved for the applicant for six months, although it will only be valid for three months until the company is registered under that name at the notary’s office. If this period is exceeded, it must be renewed. After six months without use, the name is available again to anyone.
2. Open a bank account in the name of the company.
Once you have obtained the certificate, you must open a bank account in the name of the company you are going to set up and deposit the minimum initial capital, i.e. 3,000 euros at least. The bank will issue a certificate of this deposit, which you will then have to present at the notary’s office. Normally you will not be able to spend the money until you present the tax registration and the deeds stamped by the Mercantile Register at the bank, but from that moment on you will be able to use the 3,000 euros of the share capital for any expenses or investment of the company.
3. Drafting the Articles of Association
The partners must draft the Articles of Association, i.e. the set of rules that will govern the company and which will subsequently be incorporated in the public deed of incorporation. Normally, it was recommended to delegate this task to a lawyer, like Tax and Law Spain.
There are a series of minimum elements that a statute must contain, such as the corporate purpose or activity of the company, the closing date of each financial year, the registered office within Spanish territory, the share capital, the shares into which it is divided, the nominal value of each share and their numbering, and the system of administration of the company. If you´re not sure exactly where will be the Spanish office, we will provide a company address for the initial years of the company, for receiving the company letters on the post.
4. The signature of the public deed of incorporation of the Spanish company.
The signature of the public deed of incorporation of the Spanish company by all the partners is carried out before a notary, which entails a small cost, generally a percentage of the registered capital. This is a procedure prior to the subsequent registration in the Mercantile Register. In order to obtain the deed, it is necessary to provide the documentation described in the previous points.
5. Submitting the forms at the Spanish Tax Office.
After signing the deeds, you must go to the Spanish Tax Authorities to obtain the provisional Tax Identification Number (N.I.F.) of your company, as well as the identification labels and cards. To do this, you must provide the duly completed form 036, a photocopy of the signatory’s ID card and a photocopy of the deed of incorporation of the company obtained at the notary’s office.
In this way, a provisional N.I.F. will be assigned which will be valid for 6 months, when the company will have to exchange it for the definitive one.
6. Registration in the Mercantile Register in Spain.
The company must be registered in the Commercial Register of the province in which its registered office is located. To do so, it has a period of two months from obtaining the deed of incorporation and needs to provide documentation obtained during the steps described above.
7. Obtaining the definitive N.I.F. (tax identification number)
Once you have completed the above steps, and as a last action, you must go again to the Tax Office to exchange the provisional N.I.F. card for the definitive one, once the incorporation of the company has been effectively registered. With the procedure taken in Tax And Law Spain, we will make most of those steps using new technologies. At Tax and Law Spain we minimise costs and simplify many of these bureaucratic procedures to ensure that these costs are kept to a minimum. That is why we have fees starting from 600 eur for setting up a Limited Company in Spain.
If you want to know more about how could you set up a limited company in Spain as a foreigner, please take in consideration the following post:
How can you set up a limited company in Spain as a foreigner?
Thanks for reading this article. If you still having questions regarding company formation in Spain, you can contact me or get an appointment here: +49 1520 8381499 or Email to Erica@taxandlawspain.com