Types of Business Entities in Spain
Incorporate a sociedad limitada (S.L. - limited liability company)
The most popular form of business in Spain is the private limited liability company (sociedad limitada laboral).
The capital of the Spanish SL
is divided into nontransferable shares and the liability of each member is limited by the contribution to the capital. A minimum share capital of 3,000 EUR
must be deposited at the beginning of opening a company in Spain
. All the decisions of the Spanish SL are taken by the general meeting of the shareholders which will appoint a director in order to make sure that the articles of association’s regulations are respected, prepare all the documents for these meetings and the ones which needs to be delivered to the authorities and take all the daily decisions.
Public limited liability company (sociedad anonima)
This type of company is a form of business which requires high amounts of capital and it is also known as the joint stock company. For opening this type of company in Spain, you need to have at least 60,000 EUR as share capital (at least one quarter of this sum must be paid up before company registration in Spain). The liability of the members incorporating a Spanish SA is limited by their contribution to the capital. The major decisions are taken, like in the case of the private limited companies, by the general meeting of the shareholders, but the daily decisions are taken by a board of managers supervised by a supervisory board (only if desired).
General partnership in Spain
This type of company
is formed by at least two members with equal responsibilities and rights, since they are all considered general partners. The liabilities of the members are extended on their personal assets and, in case of dissolution, those can be used to cover the outstanding claims.
Another form of Spanish partnership is the limited partnership which is formed by at least one member who is a general partner and at least one which is a limited partner, with limited liability to the extent of his/her own contribution to the capital. Only the general partner can take the major decisions and, in case it is excluded, the partnership ceases to exist.
Sole trader in Spain
If an individual entrepreneur decides to open a company in Spain on his own, it can opt for a sole trader entity. The business has the same entity as its owner and, in case of dissolution, the claims can be covered with the investor’s assets. No minimum share capital is required for this type of entity and all the profits can be used freely by the user.
Incorporation procedure in Spain
The process of opening a company in Spain begins with checking the desired name at the Mercantile Register, procedure made directly at the office of the Central Mercantile Registry or via e-mail. A bank account must be open and a certificate of deposit must be received from that bank. After that, the founders must notarize the documents of incorporation.
The first effective step of Spanish company incorporation is obtaining a Tax Identification Code (Codigo de Identificacion Fiscal, CIF) from the Delegacion Provincial de la Agencia Estatal de la Administracion Tributaria.
The certificate of name reservation, the certificate of capital deposit and the incorporation deeds must be submitted with the Mercantile Registry in maximum two months starting with the date the decision of registration was taken. Once the Mercantile Registry has issued a certificate of incorporation, the announcement regarding the incorporation of the company in Spain is published in the Official Journal of the Mercantile Registry. Then the founders must legalize the corporate books and accounting books. The process is performed through an application at the Commercial Registry deposited electronically or in person.
All the companies incorporated in Spain must obtain a municipal license to open business premises process made through an application at the Departamento de Urbanismo del Ayutamiento. The process may take up to 15 days.
In the end of Spanish company incorproation process, all the workers must be registered with the local general treasury of social security at the Tesoreria General de la Seguridad Social. This is the last step of the company incorporation in Spain.
Economy overview in Spain
Spain has a strong economy, with industry playing an important role for those thinking about opening a company here. Besides, international trading and tourism are also of great importance in terms of economy in Spain.
Despite the financial crisis, the Spanish economy is holding up well and signs of improvement have started to appear.
Spain is ranked on the seventh place in terms of receiving foreign investments. Over 10,000 foreign companies have been started in Spain and the government is still looking for different incentives in order to attract even more investors from abroad. The main investors willing to open companies in Spain, so far have been from the Netherlands, France and UK.
The main fields that the Spanish economy is built on are: processing foods, textiles, footwear, petrochemicals, electronics, steel and automobiles. Foreign investors starting companies in Spain tend to be more attracted to transport and storage, together with real estate. Some other investors came to Spain with the intention to set up companies that activate in sectors such as manufacturing, finance and insurance, scientific activities or electrical energy supply. Madrid and Catalonia attract the most foreign investments in Spain.
For details about how to open a company in Spain
, you may contact our local agents
from Bridgewest, a European company formation agent that provides incorporation services in over 65 countries, such as Spain