Establishment of a private limited company in Spain
We have all been affected by the situation generated by the outbreak of COVID-19 in our society. However, the introduction of the vaccine may represent a new chapter in this situation and bring us closer to a situation as close as possible to the previous normality.
But at OTIS ADVOCATEN we always keep our focus on the positive, on how we can get solutions out of even the worst situations. And we all know that crises always generate unique opportunities. Therefore, this new context and paradigm may represent a unique business opportunity to finally decide to create that business or company that you have always had in mind, and to launch that project.
In today’s post, we are pleased to provide you with very useful and basic information regarding the procedure for incorporating a limited liability company in Spain.
When dealing with any type of matter in Spain, the first thing we require is patience. It is true that our wonderful country offers many possibilities, especially when it comes to buying a house or setting up a business. However, Spain is also known for its heavy tax burden, complex bureaucratic procedures and a certain length of processing times.
All this, as you will realize, is an obstacle to carry out these procedures. We can assist you in this process, both legally and practically.
Therefore, in Spain, in generally speaking, these are the main points to be taken into account when incorporating a limited liability company:
1) 1. Power of attorney
First of all, we must obtain a power of attorney to be able to manage everything necessary. The power of attorney is coordinated between the notary and the client.
2) 2. Company name and corporate purpose
Once the power of attorney has been obtained, we must certify that the name we want for the company is available in Spain. On the other hand, it will be necessary to specify correctly what the object or purpose of the company is. In addition, this name must comply with a series of legal requirements.
3) 3. NIE
If the partners and administrators are foreigners and do not yet have a NIE, this number must be requested. If the partner is a foreign company, additional formalities should be carried out for that company.
4) 4. Bank account
The next step is to open a bank account in a Spanish bank and to deposit the capital of the company, which must be a minimum of €3,000. After that, the bank shall provide the corresponding bank certificate.
5) 5. Drafting of the Articles of Association
This is the set of rules that will govern the company. It is very important that the Articles of Association have been reviewed by a legal professional to ensure that the wishes and objectives of the founding partners are included and protected at the time of constitution. In addition, in certain cases, it would also be interesting to grant what is known in Spain as “pactos para sociales”, to manage the internal relations between the founding partners.
6) 6. Public deed of constitution
This is the moment in which all the founding partners (or their representatives) go to the Notary so that he will grant legal protection to all the objectives and steps previously given. The deed of constitution of the S.L. and the UBO (Ultimate Beneficial Owner) notarial deed.
7) 7. Various procedures
Once we have constituted the company before a Notary, the SL now has legal personality; but to be able to operate one hundred percent in the Spanish business traffic, it is necessary to fulfill a series of additional steps of very diverse character (with the Commercial Registry, the Spanish Tax Agency, the bank, etc.) and that will mainly depend on the type of business that is constituted and the place where it is constituted.
8) 8. Accounting and tax obligations
When the limited liability company is constituted and active, the accounting must be maintained and tax obligations must be fulfilled.
If you intend to set up a business in Spain, a limited liability company is the legal form that would be most interesting for you. As you have been able to see, the procedure is somewhat complicated. For that reason, it is necessary to be very well informed about the procedure set by the Spanish Law.
OTIS ADVOCATEN has offices in Amsterdam, Barcelona, Madrid, Marbella and the Balearic Islands. Our professionals of Dutch and Spanish origin are perfectly prepared and trained to meet your needs, regardless of the country of action or the type of case. If you need our help, do not hesitate to contact us.