Set up your company in Spain without the hassle

Why choose BMC

With over two decades of experience in company formation and corporate administration, BMC has supported more than 200 domestic and international businesses through their incorporation process in Spain. Our multidisciplinary team combines commercial lawyers, tax advisors, and compliance specialists to deliver a service that goes far beyond the notarial formality.

Every incorporation is different, and that is why we invest the time to understand your project before recommending a structure. We are not a filing agency that applies templates: we are an advisory firm that designs the optimal corporate structure for your specific situation.

Most common legal forms

• Sociedad Limitada (SL): The most popular choice for SMEs and startups. Minimum share capital of 3,000 euros, liability limited to the capital contributed, and a flexible governance framework. Suitable for the vast majority of business ventures.

• Sociedad Anonima (SA): Requires 60,000 euros minimum capital. Necessary for regulated sectors and companies that plan to go public or attract large-scale investors. More complex corporate governance requirements.

• Sociedad Limitada Unipersonal (SLU): A variant of the SL with a single shareholder. Offers the same limited liability advantages for solo entrepreneurs who want to separate their personal and business assets.

• Autonomo (sole trader): The simplest and fastest way to start trading, but without asset separation. Recommended for low-risk activities or as a stepping stone before incorporating a company.

Indicative costs

The total budget for incorporating an SL in Spain generally ranges from 1,500 to 3,500 euros (excluding the share capital), depending on the complexity of the structure, the number of shareholders, and the statutory clauses required. This figure covers notary fees, registry fees, professional advisory, and initial tax registrations.

For more complex structures (holding companies, joint ventures, professional partnerships), costs may be higher depending on the specifics. In every case, we provide a detailed, fixed-price quote before any work begins.

The post-formation compliance framework

Many business founders assume that once the company is incorporated and the NIF obtained, the entity is ready to trade. In practice, several additional steps must be completed before the company can invoice, hire staff, or open bank accounts without risk.

AEAT census registration (Modelo 036/037). The company must declare its economic activity, its VAT regime election, and its chosen accounting period within one month of incorporation. Failure to register before issuing the first invoice results in that invoice being issued outside the company’s registered activities — a formal compliance issue that can trigger penalties.

Social Security registration. If the company will hire employees, it must register as an employer with the TGSS before the first employee’s start date. The registration produces the Código de Cuenta de Cotización (CCC) — the employer reference used in all Social Security filings. The director, if performing paid management functions, must also register in the appropriate Social Security scheme (RETA for autonomous workers’ regime, or Régimen General for employed managing directors).

Sector-specific licences. Certain activities require prior authorisation before trading: healthcare facilities, pharmacies, food handling establishments, construction contractors, financial services intermediaries, travel agencies, and educational centres all require sector-specific licences or registrations with the relevant regulatory body. These must be in place before the company’s first commercial activity in that sector.

Bank account setup. Opening a Spanish corporate bank account requires the original public deed of incorporation (or a certified copy), the NIF, and the identity documents of all authorised signatories. Some banks also require a business plan or evidence of initial trading activity. BMC advises on bank selection and supports the account opening process, including preparation of the documentation required by the bank’s compliance and KYC process.

NIE and NIF: the identification numbers for foreign shareholders

Foreign shareholders and directors who are not Spanish nationals need an NIE (Número de Identificación de Extranjero) before they can appear in a notarial deed in Spain. The NIE is obtained from the Spanish police (Comisaría de Policía) or from a Spanish consulate in the applicant’s home country.

For non-residents who cannot travel to Spain, a Spanish notary-registered power of attorney granted to a representative in Spain allows the representative to appear at the incorporation deed on the foreign shareholder’s behalf. The power of attorney must specifically authorise the incorporation acts and must be apostilled if granted outside Spain.

After incorporation, the company obtains its own tax identification number (NIF) starting with the letter B (for SL), A (for SA), or N (for branches of foreign companies). The provisional NIF is issued immediately on registration; the definitive NIF is granted once the company has filed its first tax return or after six months of registration.

Choosing the right share capital structure

While the legal minimum for an SL is €3,000, the initial share capital has practical implications beyond the legal requirement. Banks assess share capital when considering financing applications; clients and suppliers in regulated sectors may check the capital as part of their supplier due diligence; and the capital structure must reflect the ownership split agreed between co-founders.

For companies with multiple shareholders, the articles of association should address pre-emption rights on share transfers, drag-along and tag-along rights, consent requirements for new investor entry, and valuation mechanisms for exit. These provisions — standard in a well-drafted shareholders’ agreement — are best designed at the time of incorporation rather than negotiated retrospectively when a dispute has already arisen.

BMC’s company formation service includes the drafting of shareholder governance provisions tailored to the founders’ agreed terms, ensuring that the corporate structure reflects the commercial agreement from day one.

Branch office versus subsidiary: the choice for foreign companies

Foreign companies expanding into Spain must decide between two legal structures: a branch office (sucursal) or a Spanish subsidiary (filial). Each has distinct tax, liability, and operational characteristics.

A branch office is a permanent establishment of the foreign company in Spain — it is not a separate legal entity. The branch carries on business in Spain in the parent company’s name and on its behalf. All branch profits are subject to Spanish Corporate Income Tax at 25%. There is an additional 19% withholding on branch profits remitted to the foreign parent (reduced by applicable treaty). The parent company retains unlimited liability for the branch’s obligations. A branch must register at the Commercial Registry, obtain a NIF, and file Spanish Corporate Income Tax returns. Branch start-up costs are generally deductible in full in the year incurred.

A Spanish subsidiary (typically an SL) is a separate legal entity incorporated in Spain. The subsidiary is taxable in Spain on its worldwide income as a Spanish tax resident company. Dividends paid to the non-resident parent are subject to 19% withholding (reduced by treaty or EU Parent-Subsidiary Directive). The parent’s liability is limited to its equity investment in the subsidiary. A subsidiary provides greater flexibility for profit distribution planning, access to the ETVE regime for further international investment, and Spanish government grants and subsidies that are typically limited to Spanish-resident entities.

For most businesses, a subsidiary is preferred for its liability limitation and tax planning flexibility; a branch is more common for activities where the parent’s legal capacity (licences, professional qualifications) must be directly applied in Spain.

Electronic incorporation through CIRCE

Spain’s CIRCE (Centro de Información y Red de Creación de Empresas) online system allows the incorporation of a standard SL entirely online without a physical notary appointment, provided the founders are Spanish nationals with a digital identity certificate (DNIe) or an EU digital signature. The CIRCE process can complete in 5-7 business days compared to 10-15 for conventional incorporation.

The CIRCE route is optimal for straightforward incorporations with standard articles of association. It is less suitable for complex shareholding structures, non-standard governance provisions, or where one or more founders requires representation by power of attorney. BMC advises on whether the CIRCE route is available for each specific incorporation and manages the process from start to finish where it is the optimal choice.

First-year tax obligations: what to file and when

The year of incorporation triggers specific first-year tax obligations that many founders are unprepared for:

Modelo 036 (census declaration): Must be filed before the first taxable transaction — before issuing the first invoice or making the first taxable supply. The census declaration registers the company’s economic activity, its VAT regime, and its accounting period.

ITP/AJD on the incorporation: While the Transfer Tax on company formation was abolished in Spain in 2010 for most types of capital restructuring, the Documented Legal Acts tax (AJD) continues to apply to notarised documents. The notary deed of incorporation does not trigger AJD in the capital subscription itself, but ancillary notarial documents (capital increases, mortgage deeds for property) do.

First corporate tax instalment (Modelo 202): If the company begins operations before October of the year of incorporation, and its expected tax liability exceeds €6,000, it must file a corporate tax instalment in October (the second instalment). This catches many first-year companies by surprise if they achieve early profitability.

Social Security enrolment for the first employee: Must be completed the day before the employee’s first working day. Late registration, even by one day, results in an ITSS sanction and retroactive Social Security contributions from the date the employee actually started working.

BMC’s turnkey company formation service covers all first-year obligations as part of the initial engagement, ensuring that new companies are fully operational and compliant from their first day of trading.