Procedure for Registering a Company in Spain for a Non-resident Foreign Entrepreneur

Spain is increasingly attracting foreign investors due to numerous tax benefits, industrial and commercial diversity, and ease of access to growing economies. Many entrepreneurs are seeking to benefit from these advantages and start up a business in Spain. Before attempting to do so, what should a non-resident foreign entrepreneur consider?
To initiate a business in Spain an independent commercial entity must be created. The most common form of legal business entity permitting the ability to operate in the Spanish market is that of Limited Liability Companies (S.L.).
These companies require a minimum share capital of €3,000, fully disbursed to give value to the social shares, usually set at €1.00 per social share but a different value can be assigned if desired. The liability of the partners is limited to their contributions and there is a higher degree of flexibility to adapt the legal framework of the company to the will of its partners compared to that of Public Limited Companies (S.A.), which is the other commonly used option for establishing companies in Spain.
Both types of companies, Limited Liability Companies (S.L.) and Public Limited Companies (S.A.), can have contributions in cash or in kind, meaning money or other assets or rights of a patrimonial nature subject to economic valuation.
These two types of companies represent more than 95% of Spanish companies, so we will focus on them in this article, with Public Limited Companies being less common and suitable for larger enterprises.
The following are the necessary documents to open a company:
  • NIE (Foreigner Identification Number) for each foreign partner if they are individuals.
  • If the partner or partners are a foreign commercial entity, the CIF number of the foreign company must be provided, previously registered with the Spanish Tax Agency (provisional until the effective registration of the company in the Commercial Registry, at which point it becomes definitive).
  • A Certificate of Registration of the Name of the new company, confirming that the name is not already in use and is available.
  • A certificate issued by the bank confirming the payment of the minimum share capital, which will become part of the company before its creation before a Notary.
  • Articles of association for the company must be drafted that will be incorporated into the constitution deed later. The articles of association are the rules governing the company, covering aspects such as the governance mode, sale of shares, paid-up capital, corporate purpose, registered office, convocation and holding of meetings, etc.
  • Real Ownership Certificate of the company (Beneficial Owner Declaration), indicating those who own more than 25% of the social shares, is mandatory in accordance with the Spanish Anti-Money Laundering Law.
  • Declaration of foreign investments, as foreign partners, the Model D1A must also be submitted.
  • In some cases, it may be necessary to legalise documents before a Notary, for example, if they are foreign documents (such as data from the foreign company that would be a partner in the company to be formed). In such cases, they must be notarized and include the Hague Apostille in their country of origin, followed by translation by a sworn translator.
Most of the documents mentioned above can be obtained directly in Spain from the Spanish authorities, such as the Tax Agency, the Spanish Notary where the company will be incorporated, and local banks. There is no national fee for registering the company, beyond the registration costs incurred by entering the deed in the Commercial Registry of the city where the company will be domiciled. These costs start from €200 + VAT (21%) and the cost of the deed signed before the Notary (which varies depending on the length of the deed and the characteristics of the company), but this is not a national fee. The amount can vary based on the amount of the share capital and the number of partners in the company.
It is not necessary for the founder of the company to be Spanish; a foreign national can establish a company in Spain provided they have an NIE (Foreigner Identification Number) and provide the documentation outlined above. The legal address of the company can be any address where the client can receive notifications. Usually, it will be in the same city where the company operates, although it does not have to be in all cases. The address is part of the Articles of Association and can be modified whenever desired through an agreement of the partners.
Giambrone & Partners offers a domiciliation service in our offices in Madrid, Barcelona, or the Canary Islands, where we can manage receiving notifications for each company in case the established company does not have an office or branch in Spain.
Several entities are responsible for registering companies, starting with Notaries who constitute the company through their public testimony after verifying that all submitted documentation is correct. Subsequently, it is deposited in the Commercial Registry of the city corresponding to the registered office of the company and takes between two and three weeks to register the creation of the company. The registration period varies from two/three weeks to two months. This is because it usually takes some time to prepare and send the documentation related to the partners and banking documentation, as well as the preparation of the deed before the Notary. After signing, it will be sent to the Commercial Registry, which usually takes between two/three weeks to qualify the creation of the company either positively or negatively, depending on their workload.
Finally, if everything is correct, a partner of the new firm must attend the Spanish Tax Agency with the aforementioned documentation, as well as proof of the registration of the company in the corresponding Commercial Registry, and request the registration and the definitive CIF number that will identify the company and with which it will operate. After all this, the company will be fully operational to start its activities.
It is possible to open a company remotely by granting powers of attorney before a Notary in favour of our office professionals in the country of origin of the partners,  authorising them to obtain the Spanish NIE, as well as to perform all the necessary acts for the creation, signing before a Notary, and registration of the company in Spain.
However, the presence of the partner or partners will be necessary at least once, once the company is constituted and registered, they must go to the bank where the funds were deposited for the identification and signing of the responsible partners of the S.L. or S.A., enabling access to the company's funds that were disbursed. For security reasons, this process cannot be carried out by another authorised person, as it is a personal and non-transferable matter.
A non-resident foreign entrepreneur can be the administrator of a Spanish company, provided they are properly identified and have been appointed by the partners. They must also comply with the legal and tax obligations that the company, through the figure of the administrator, must fulfill, such as the presentation of Annual Accounts with the Company's Balance, to be carried out annually.
A company can be managed, and shares can be owned by individuals (under the self-employed regime) or legal entities (another company) or even by both, as long as they meet the previously mentioned requirements and are duly identified in Spain. Individual entrepreneurs (or self-employed individuals) must be registered as such and pay the corresponding monthly fee, which varies depending on multiple requirements and the specific situation of each individual.
To register a citizen as a self-employed entrepreneur, they must regularly be in Spain. Therefore, a temporary residence permit will be required, with no criminal record, and a certified identity card (the aforementioned NIE document).
Residents of other countries have numerous reasons to create a company in Spain, primarily because it allows them to be part of the European Common Market with all the advantages that this entails. They also gain access to a growing market that favours investment in multiple sectors, including many globally recognised companies. Additionally, there is a reduced tax rate of 15% for the first two years for newly created companies (later increased to the normal rate of 25% in the annual Income Tax). It's worth noting that Spain serves as the gateway to Europe for the entire Latin American market, making it a launching pad for entering Central America and South America.