This article provides some guidance on key legal aspects for foreign investors interested in incorporating a Company in Spain. The following steps are required:

Obtaining a NIE

The Foreign identification Number (NIE) is required for all Directors and Shareholders who are not a Spanish citizen. The NIE number does not give a residence right in Spain, nor implies any kind of tax residency in Spain.  The NIE can be obtained at the Spanish consulate of the country of residence, or in Spain by a representative with a Power of Attorney. To obtain the NIE it is necessary to apply for an appointment.

Obtaining a NIF

To set-up a subsidiary in Spain,  previously it is necessary to obtain a Tax Identification Number (NIF) of the Mother Company that will hold the shares of the new company. To obtain this number it is necessary to provide the Spanish tax authorities with the following documents:

  • A power of attorney granting faculties to represent the Company for this purpose. This PoA can be signed in Spain or at a foreign country.
  • Company certificate issued by the Commercial Registry. This certificate should include in any case: the company name, management body, date of incorporation and corporate address.
  • Company bylaws: this document is necessary to determine how the decisions are taken when there are two or more Company Directors. When the Company has a sole Director or a CEO the document is usually not required.

All documents should de duly legalised with the Apostille of the Hague. When drafted in a different language they should also be accompanied by a certified translation. The legal representative of the Foreign Mother Company should be identified with a NIF for individuals (similar to NIE) as well.

Company name certificate

An application with 5 possible Company names (in order of preference) should be submitted to the Central Commercial Registry. The Central Registry will grant one of the requested Company names unless all of them lack any distinguishing effect from other Company names already registered in Spain.

Obtaining a provisional NIF for the New Company

It is necessary to fill and submit form 036 for the tax register declaration and to obtain a provisional tax number for the Company (NIF).

Capital share

The minimum capital required  for the incorporation of a Spanish Limited Liability Company “Sociedad Limitada” is 3,000€. The minimum capital required  for the incorporation of “Sociedad Anónima” is 60,000€. To see the differences between “Sociedad Anónima” and “Sociedad Limitada” please see this article.

Contributions in cash to the capital share should be transferred to a “Company under incorporation” bank account. It is also possible to make non-cash contributions with contributions in kind to the Company of different types of assets. For the Limited Companies (SL) it is not necessary to prove the contributions have been made when the Notary Deed includes a declaration of joint liability towards creditors and the Company by the shareholders.

Execution of the Company formation Deed before a Spanish Notary Public

It is advisable to obtain legal advise for the preparation and drafting of the Company Bylaws. This Articles of Association should include, among others, the following information:

  • Corporate address: all Companies should have a corporate address in Spanish territory. This can be your own office in Spain or a virtual office provided by an specialised firm.
  • Management body of the Company. The different alternatives are:
  • A sole Director.
  • Joint Directors: this may be appropriate where unanimity of decision-making is required.
  • Joint and several Directors: two or more directors who may take decisions either jointly or severally.
  • Board of Directors.
  • Corporate object of the Company: it should contain the activities which will carry out the Company. It should also include the main economic activity code describing the activity, in accordance with the National Classification of Economic Activities (CNAE).
  • Remuneration of the management body.

Foreign investment declaration

This statement must be submitted by all non-resident individuals or companies who make investments in Spanish companies that are not listed on the stock exchange. The D1A form is prepared with the Aforix programme and attached to the Notary Deed.

Declaration of transfer tax

Before registration at the Commercial Registry it is necessary to submit tax form 600 to the regional tax office, but Company formation is fully exempted for the moment, so no tax is actually paid.

Incorporation and Registration of the Company before the Commercial Registry

The Notary Deed should be then submitted to the Commercial Registry, which registration usually takes up to 20 days.

AGM Abogados is a “Punto de Atención de Emprendedores (PAE)” (Help Desk for Entrepreneurs) which can facilitate the steps of the incorporation process and accelerate the company formation deadlines. We would prepare an electronic form through an express company formation online platform called CIRCE, shared with the Notary, the tax office, the social security and the Commercial Registry. All the information is notified electronically and therefore it reduces considerably the deadline for the registration at the Commercial Registry of the Company formation or for obtaining the definitive NIF. Notary and Registry fees are also reduced through this system.

Obtain definitive NIF

Once the Company Formation Notary Deed has been registered it is necessary to submit a new 036 tax form with a copy of the Notary Deed, to obtain the Definitive NIF. This NIF is the VAT number, which will appear in the invoices issued or received by the Company. If the Company will provide goods or services to other EU Countries it will be convenient to register with the VIES census, to obtain an EU VAT number. The obtention of this EU VAT number in Spain is usually subject to a tax inspection and the Company needs to fulfill some additional requirements depending on the activity.

A 036 tax form is also necessary to inform the tax office of the beginning of the business activity and start invoicing. This can also be done immediately after the signature of the signature at the Notary without waiting for the Company to be fully registered.

Registration with Social Security

Company Directors resident in Spain have to be registered with Spanish social security. Depending on their management functions and the percentage owned of capital share they will be included in the General social security regime (with certain particularities) or with the special self-employed social security regime.

Open a Company bank account in Spain

Although all the other procedures can be completed with a Power of Attorney, the opening of the bank account would normally require the legal representative of the new company to attend personally to the bank office, in order to comply with the Spanish Anti-Money Laundering Act.

For the opening of the bank account, the bank also requires the statement of beneficial owner identification. This Notary Deed identifies the natural persons ultimately controlling, directly or indirectly the Company, either for owning more than 25% of the capital share of the Company, or as members of the Management Body.

Residency in Spain through Company formation

Through the Investors Visa it is possible to obtain legal residence in the country when the creation of the new company is accompanied by an investment in a business project of interest to Spain (Creation of jobs, social and economic impact in a certain geographical area o contribution to scientific and/or technological innovation).

You can contact AGM Abogados here if you would like AGM Abogados to help you with the incorporation of your Company in Spain.

David del Valle Díez

Commercial Lawyer

AGM Abogados

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *