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Spain has made a strong economic recovery after the economic crisis and is now back among the European leaders in terms of trading. It does not surprise anyone anymore that Spain is once again one of the most sought destinations for opening a company.
Foreigners who want to open companies in Spain have many rights, they actually have pretty much the same rights as the local businessmen, however they also have their share of obligations. So, below we will describe the requirements when starting a business in Spain.
The most used types of companies in Spain
No one starts a company in another country without previously getting acquainted with the types of companies they can register and choosing the right structure, or at least one close enough to their needs. Spain is very advantageous from this point of view, as the types of companies here are usually the same as in any other European jurisdiction and in several Asian and Western countries.
We first have the simple forms for doing business which are the sole proprietorship and the partnership, however these are seldom used. Then, we have the limited liability company which can be private or public. The main difference between them is the share capital needed for registration.
In the case of a private limited liability company – sociedad limitada or SL – the minimum amount of money required to open it is 3,000 euros. With respect to the public company – sociedad anonima – the minimum share capital is 60,000 euros. A quarter of this amount must be paid upon the incorporation of the company.
Documents required to open a company in Spain
The most important documents which must be drafted before starting the registration procedure of the company are the Memorandum and Articles of Association, in other words the company’s statutory documents. These must be drafted before a public notary and they must contain the name of the company owners, also known as shareholders, the company’s administrator and the objects of activity of the business. They must be notarized.
The company formation steps in Spain
Even if the preparation of the incorporation documents is the most important, this is not the first one. Foreign citizens opening companies in Spain must first obtain a tax identification number, known as NIE. Then, the company must be selected and filed for approval. Once approved, a certificate of availability will be issued. The opening of the bank account, where the share capital must be deposited, will follow and only then the incorporation documents will be filed with the Trade Register.
The Registrar will issue a public incorporation document and a fiscal identification number – codigo de identificacion fiscal, or CIF.
Once registered, the company must pay a municipal tax, file a notification for starting the operation with the city hall of the city it will operate in and another notification with the Ministry of Labor.
Registering a company in Spain is not hard, however there are a few steps which must be completed in a certain order which will significantly improve this experience. Once registered, the company can apply for an intra-Community VAT number and have access to the EU market.