Company Incorporation in Spain - Virtual Offices, VAT, Taxes & Visas
Spain has a deserved reputation as a low-cost land of opportunity for foreign investors but bureaucratic requirements are strict so expert help, like that provided by us here at Euro Start, is essential for businesses looking to start up in Spain.
Requirements for company formation in Spain
- A Spanish ID number (NIE) is required for all directors and shareholders. This can be applied for via Power Of Attorney. This will be provided in Spanish and will need to be signed in front of a notary and legalised for use in Spain. If you wish to have the POA in English then it would need to be a sworn translation which we can assist with. It takes approx. 8 weeks to obtain the NIE if you apply at your local Spanish consulate. Alternatively you can visit Spain where it takes only 2 weeks.
- Minimum share capital to be deposited for a limited company is €3,000.
- No minimum directors required - you can be a director and a shareholder at the same time.
- If an EU VAT number is required, then a Serviced/Physical Office will be needed
- If only a local tax number required, then only a registered address is required
- A Digital Certificate is compulsory in order to receive all communications from the tax authorities electronically. This is required for all directors and the company.
- Social security contributions will need to be paid in Spain. This is either paid by a director or an employee with the Power Of Attorney to pay on the company’s behalf. This is around €250 per month.
What are the main types of company in Spain?
The two most popular forms of corporate structure in Spain are as follows:
- public limited company (S.A.)
- private limited company (S.L.)
What other types of company are there in Spain?
Other business formats, less common but equally valid, are as follows:
- sole trader – one owner with unlimited liability
- joint ownership – two or more proprietors with unlimited liability
- general or limited partnership
- branch or representative office
Is company incorporation complicated in Spain?
Spain has a deserved reputation for bureaucratic inefficiency and whilst this has improved as the business climate has become more liberal, professional advice remains absolutely essential when establishing a company. We are experts in company formation in Spain and are able to guide you through the process smoothly to minimize frustration.
What about corporation tax?
Corporation tax in Spain has recently been reduced to a rate of 25% (which is lower than a few of its European neighbours) and the good news is that for the first two years of for a new business it's only 15% which is a significant benefit for companies just finding their feet in a new location.
How easy is it to recruit staff in Spain?
Recruitment is rarely a problem for foreign companies seeking local staff. The workforce is well educated and flexible, labour costs are low and there are recruitment agencies throughout the country. We will be happy to refer you to our network of local recruitment specialists.
What is the regulatory environment like?
In line with standard EU practice, companies are required to register and to submit annual accounts to the regulatory authorities. Annual audits are compulsory for larger companies. There are very few controls on foreign investment apart from restrictions on non-EU residents in certain strategic sectors, such as telecommunications. The labour market, however, is subject to tighter regulation. The maximum working week is 40 hours and companies have to provide six weeks annual leave to all workers.
Are there financial incentives available?
Spain offers a broad range of incentive schemes, many of them funded by the EU. These include regional incentives for investment in less developed areas of the country, measures to encourage investment in specific sectors and tax breaks aimed at reducing unemployment among young people.
And what about banking facilities?
Spain is said to have more banks than any other EU country. There are two reasons for this. First, there is a plethora of regional banks and second, Spain is a magnet for international financial institutions. Although finding a bank is easy, opening a bank account can be more difficult without an expert on hand. We will be happy to tackle the bureaucracy on your behalf, freeing you to focus on your business.
For more information about opening a bank account in Spain, along with any other company incorporation issues including virtual offices, VAT, taxes & visas, please contact us on 0033 (0)1 53 57 49 10 or email us from our contact page and we’ll be happy to help.