Launch your business in Spain — we handle the paperwork, you focus on growth

Why Spain for your business?

Spain is the fourth-largest economy in the eurozone and offers unique strategic advantages for international businesses: a 46-million consumer market, world-class logistics infrastructure, direct air connections to Latin America and Africa, a highly educated bilingual workforce, and a stable legal environment under EU law.

The corporate tax rate of 25% (15% for new companies in their first two profitable years) is competitive by European standards, and Spain has an extensive network of double tax treaties covering more than 90 countries. For businesses targeting the Spanish-speaking world — both in Europe and across the Atlantic — there is simply no better base.

Beyond tax, Spain’s location at the crossroads of Europe, Africa, and Latin America makes it a natural headquarters for companies with operations or clients across these regions. The Canary Islands offer an additional layer of advantage through the ZEC (Zona Especial Canaria) regime, which provides a 4% corporate tax rate for qualifying companies — one of the lowest in the EU. If your business model is scalable and internationally oriented, Spain’s range of corporate structures and incentive regimes gives you genuine options that few other European jurisdictions match.

Choosing the right legal structure: SL, SA, Branch, or Autonomo

Selecting the right entry vehicle is the single most consequential decision you will make when establishing a Spanish business presence. The choice affects your liability exposure, tax position, governance flexibility, banking relationships, and exit options. Here is a full comparison of the four principal options.

Sociedad Limitada (SL) — the standard choice

The Sociedad Limitada is Spain’s equivalent of a UK private limited company or a German GmbH. It is governed by the Ley de Sociedades de Capital (Real Decreto Legislativo 1/2010) and is by far the most commonly chosen structure for small and medium-sized businesses operated by foreigners.

Key characteristics:

• Minimum share capital: €3,000, which must be fully paid up at incorporation (held in a Spanish bank account in the company’s name before the notarial deed is signed)
• Liability: Limited to the company’s assets; shareholders are not personally liable for company debts
• Shareholders: Minimum one (a single-member SL is called an SLU — Sociedad Limitada Unipersonal)
• Directors: No residency requirement; a foreigner can be sole director
• Shares: Non-transferable without the consent of other shareholders (unlike an SA); shares are called “participaciones” not “acciones”
• Governance: Flexible — a simple sole-director structure works for most foreign-owned businesses

An SL is the right choice for the vast majority of international entrepreneurs setting up in Spain. It is cost-effective to incorporate, has relatively light ongoing governance requirements, and provides the legal separation between personal and business assets that protects founders from the company’s creditors.

Sociedad Anonima (SA) — for larger or listed companies

The SA is Spain’s public company form — equivalent to a UK PLC or German AG. Minimum capital is €60,000 (at least 25% paid up at incorporation). Shares are freely transferable and the governance requirements are heavier: the SA must have a board of directors (consejo de administración) with at least three members if there are multiple shareholders.

An SA makes sense when you are planning a significant capital raise, listing on a Spanish exchange, or operating in a regulated sector (such as insurance or certain financial services) that legally requires the SA form. For most foreign-owned operating businesses, the SA is disproportionately complex and expensive. BMC advises SA incorporation only when there is a genuine commercial reason for the structure.

Branch Office (Sucursal) — testing the market

A Spanish branch office (sucursal) is not a separate legal entity — it is a registered presence of the foreign parent company in Spain. The parent bears full legal liability for the branch’s obligations. The branch is registered at the Spanish Commercial Registry and must appoint a legal representative resident in Spain.

From a tax perspective, a branch pays Spanish corporate income tax on profits attributable to its Spanish activities. The main advantage over an SL is speed and cost: no share capital is required, the registration is simpler, and there is no need for a separate Spanish audit (though the parent may still need to file its accounts). The main disadvantage is that Spanish counterparties sometimes prefer dealing with a locally incorporated company, and the unlimited parent liability can be a concern in regulated sectors.

Autonomo (Sole Trader) — the fast lane for freelancers

Registering as an autonomo is the simplest form of self-employment in Spain. There is no minimum capital, no notary requirement, and registration with the Tax Authority (AEAT) and Social Security (TGSS) can be completed online within 24-48 hours. The trade-off is unlimited personal liability: your personal assets are legally exposed to business creditors.

The autonomo regime is well suited to independent professionals, consultants, and freelancers whose exposure to legal claims is limited. It is also popular as a starting point for entrepreneurs who want to begin generating income immediately while the SL incorporation process completes in parallel.

Monthly Social Security contributions for autonomos currently range from approximately €200 to €590 per month under the new income-based contribution system introduced in 2023 (the minimum base for new autonomos is €230/month for the first 12 months under the flat-rate scheme). These contributions are payable regardless of whether the business generates income in a given month.

Structure comparison table

The NIE and NIF: identity numbers you cannot avoid

Before a foreigner can do almost anything in Spain’s business or tax system, they need an NIE (Número de Identificación de Extranjero). The NIE is a personal identification number issued by the Spanish National Police to foreign nationals. It is required to:

• Sign a notarial deed as shareholder or director
• Open a bank account as an individual
• Register with the AEAT (Tax Authority) as an autonomo or company director
• Register with Social Security
• Buy or sell property

The NIE is not a work permit or a visa — it is purely an identification number. Non-residents can obtain an NIE at a Spanish consulate in their home country or at a National Police station in Spain. In practice, obtaining an NIE can take several weeks, particularly at consulates outside Spain, which is why BMC starts this process on day one.

Once a company is incorporated, it receives a separate tax identification number: the NIF (Número de Identificación Fiscal), also called a CIF when assigned to legal entities. The NIF/CIF is used on all tax returns, invoices, and official correspondence. A provisional NIF is issued at the notary; the definitive NIF is confirmed by the AEAT after the company’s articles of association are registered at the Commercial Registry.

Non-EU nationals who are not residents of Spain may also need to consider whether their planned activity requires a visa or business authorisation before proceeding. BMC reviews visa and immigration status as part of our initial structure consultation.

Step-by-step: how to incorporate an SL in Spain

The standard SL incorporation process follows these stages. Timings are approximate and assume all documents are prepared without delay.

Week 1: Name reservation and NIE

The process begins with two parallel tracks. First, we apply for a negative certificate (certificación negativa de denominación) from the Registro Mercantil Central (Central Commercial Registry) in Madrid. This certificate confirms that your chosen company name is available and reserves it for six months. The application takes 2–5 business days and costs approximately €15.

Simultaneously, we initiate the NIE application for any shareholders or directors who do not yet have one. If this is done via a Spanish consulate, it typically takes 2–4 weeks. In Spain, we can attend a police station appointment on your behalf with a power of attorney.

Week 2–3: Articles of association and bank account

Once the name certificate is in hand, our lawyers draft the articles of association (estatutos sociales). These govern the company’s internal rules: share structure, director powers, dividend policy, transfer restrictions, and dissolution procedures. For straightforward foreign-owned SLs, BMC uses a tested template that notaries approve quickly; for more complex structures (multiple shareholders, preferred shares, drag-along rights), we draft bespoke provisions.

The next step is opening a share capital account at a Spanish bank. This account must receive the minimum €3,000 share capital before the notarial deed is signed. The bank issues a certificate (certificado de depósito) confirming receipt of the funds, which the notary requires. This is one of the most common bottlenecks: some Spanish banks are difficult to approach without an introduction. BMC works with banking contacts across major banks and digital banking alternatives to facilitate this step.

Week 3–4: Notarial deed

The notary appointment is the formal incorporation moment. All shareholders (or their representatives via power of attorney) sign the deed of incorporation (escritura de constitución) in front of a Spanish notary. The notary verifies identities, confirms the share capital certificate is in order, and witnesses the signing of the articles.

Notary fees are set by a statutory tariff based on share capital and deed length. For a standard SL with €3,000–€10,000 share capital, expect notary fees of €300–€600. The notary issues certified copies (copias autorizadas) of the deed, which are needed for the subsequent registration steps.

Week 4–5: Tax filing and Commercial Registry

Within 30 days of the notarial deed, the company must file a Transfer Tax return (Impuesto sobre Transmisiones Patrimoniales y Actos Jurídicos Documentados — form 600). Company formations are exempt from the capital duty (0.5%) that used to apply; the filing is a formality but must be completed to avoid blocking the registry.

Once the tax form is stamped, the notarial deed is submitted to the Provincial Commercial Registry (Registro Mercantil Provincial). Registration typically takes 10–20 business days. Registry fees for a standard SL are €150–€300.

Week 5–6: AEAT registrations and operational setup

With the definitive registration certificate in hand, BMC submits the census declaration (modelo 036) to the AEAT, which confirms the company’s NIF and registers it for corporate income tax and VAT. This is also when we elect the VAT filing regime (monthly or quarterly depending on turnover) and register for any applicable withholding tax obligations.

The company’s Social Security employer account is registered at the TGSS if there will be employees or a director on payroll.

Finally, the share capital bank account transitions from a capital deposit account to the company’s operating current account, and the company is ready to issue its first invoice.

Cost breakdown summary

These figures are indicative. BMC provides a fixed-price quote before engagement. There are no hidden fees.

Digital company formation: the PAE route

Spain’s Puntos de Atención al Emprendedor (PAE) network offers an electronic company formation process that can, in theory, reduce incorporation time to 48–72 hours for simple SLs. The process uses standardised articles of association (estatutos tipo) and is conducted through a notary with an electronic connection to the Commercial Registry.

In practice, the PAE route is best suited to straightforward single-shareholder SLs with no special provisions. It requires all parties to have a Spanish digital certificate or electronic ID, which most foreign founders do not have. BMC uses the PAE route where appropriate and manages the digital certificate requirements on behalf of clients.

Banking challenges for non-residents: what to expect

Opening a Spanish corporate bank account is consistently cited by international entrepreneurs as the most frustrating part of the company formation process, and for good reason. Spanish banks have become significantly more cautious about onboarding non-resident directors following EU anti-money-laundering requirements, and many branches simply decline to open accounts for companies whose directors cannot present in person with full documentation.

The main challenges:

Documentation requirements are heavy. Banks typically require: the notarial deed (certified copy), company NIF, NIE of all directors and beneficial owners, passports of all parties, proof of address (utility bills or bank statements from the home country), information about the business activity, expected turnover, and source of funds for the share capital.

Ultimate Beneficial Owner (UBO) verification has become a key compliance hurdle. Any individual owning 25% or more of the company must be verified. For complex ownership structures involving multiple layers of companies, this process can take weeks.

Alternatives exist. Several fintech and neo-bank providers (including Wise Business, Revolut Business, and some Spanish digital banks) are more accessible to non-resident-directed companies and can provide a functional IBAN for operations while the traditional bank application progresses. BMC has helped clients navigate both the traditional and digital banking routes and can advise on which is most appropriate for your business profile.

Remote incorporation: using a poder notarial

For clients who cannot travel to Spain during the company formation process, BMC can represent you fully through a power of attorney (poder notarial). This allows our lawyers to sign the notarial deed, register the company, and complete all tax registrations on your behalf without you setting foot in Spain.

If the power of attorney is signed outside Spain, it must be:

1. Executed before a notary in your home country
2. Apostilled under the Hague Convention (or legalised if your country is not a signatory)
3. Translated into Spanish by a sworn translator (traductor jurado) if not originally in Spanish

The apostille requirement adds approximately 1–2 weeks to the preparation timeline and a cost of €50–€200 depending on the country. BMC provides a template poder notarial and advises on the exact requirements for your jurisdiction. Many clients from the UK, Germany, France, the Netherlands, and the United States have used this route successfully.

Post-incorporation obligations: keeping your company compliant

Incorporation is the beginning, not the end. A Spanish SL has significant ongoing obligations that must be met to avoid penalties, loss of good standing, and complications with the Tax Authority. Here is what to plan for:

Monthly obligations

If your company has employees, you must file monthly payroll withholding returns (Modelo 111) by the 20th of each month. If you have significant suppliers subject to withholding (such as professional service providers), a monthly Modelo 115 (rental withholdings) or Modelo 123 (other withholdings) may also apply.

Companies enrolled in the monthly VAT refund scheme (Registro de Devolución Mensual, REDEME) file monthly IVA returns.

Quarterly obligations

IVA (VAT) — Modelo 303: Filed quarterly by the 20th of April, July, October, and January. This covers the difference between VAT charged on sales and VAT paid on purchases. If input VAT exceeds output VAT (common in early-stage businesses with investment costs), the balance accumulates as a credit to carry forward or claim as a refund.

Payments on account — Modelo 202: Corporate income tax is paid in three instalments in April, October, and December, based on the prior year’s tax liability or (more commonly) the current year’s accounting profit. Getting these instalments right is important — underpaying can trigger interest charges.

Withholding tax — Modelo 111/115: Quarterly if the company is not on the monthly scheme.

Annual obligations

Corporate Income Tax — Modelo 200: Filed within 25 days following the six-month period after the financial year end. For companies with a December 31 year-end, this means filing by July 25 the following year. The standard rate is 25%; the startup rate for new companies is 15% for the first two profitable tax periods.

Annual accounts: Every SL must prepare and file annual accounts (balance sheet, profit and loss account, and notes) at the Provincial Commercial Registry within 30 days of their approval by shareholders (which must occur within six months of year-end). Failure to file annual accounts results in the company being blocked from certain registry activities and can attract administrative sanctions.

Modelo 347 (transactions with third parties): Annual disclosure of transactions exceeding €3,005.06 with any single counterparty, filed by the end of February.

Modelo 390 (annual VAT summary): An annual summary of all VAT transactions, filed by January 30.

Accounting framework

Spanish accounting follows the Plan General de Contabilidad (PGC), Spain’s GAAP, which is aligned with IFRS for SMEs. All SLs must maintain accrual-based accounts, retain supporting documentation for at least six years, and keep statutory books (libro de actas for shareholder meetings, libro registro de socios for the shareholder register, and accounting books). BMC provides full-service accounting and can manage your company’s books from day one.

The Beckham Law connection: pay yourself through your own company

One of the most tax-efficient strategies available to international entrepreneurs relocating to Spain is combining a newly incorporated Spanish SL with registration under the Beckham Law (Régimen Especial de Trabajadores Impatriados, regulated by Article 93 LIRPF).

The Beckham Law allows qualifying individuals who become Spanish tax residents after a period of non-residence to pay IRPF at a flat 24% rate (instead of the progressive scale reaching 47%) on Spanish-source income up to €600,000 per year. The qualifying conditions, reformed by the Startups Law (Ley de Startups, Ley 28/2022), now include:

• Becoming a Spanish tax resident for the first time, or not having been resident in Spain in the previous five years
• Moving to Spain to take up employment, or as a director of a company in which you hold less than 25% of shares (new: the 25% limit was removed for innovative startups by the Startups Law)
• Alternatively: moving to Spain as a remote worker for a foreign employer, as a digital nomad under the Digital Nomad Visa, or as an entrepreneur under the Entrepreneurs Law

The strategy works as follows: you incorporate a Spanish SL, which employs you as a director or employee. Your salary from the SL is taxed at 24% under Beckham rather than at up to 47% under the standard IRPF progressive scale. The SL pays corporate income tax at 15% on its profits. The combination of a 15% entity-level rate and a 24% personal rate compares very favourably with the alternative of operating as an autonomo paying IRPF at up to 47%.

BMC advises on the Beckham Law application as part of our company formation service, and can time the incorporation and employment contract to maximise the qualifying period.

Registered office requirements

Every Spanish SL must have a registered office (domicilio social) in Spain. The registered office address appears on the public record at the Commercial Registry and is used for all official correspondence, including notifications from the AEAT and Commercial Registry.

The registered office does not need to be a physical commercial premises — it can be:

• A virtual office address provided by a professional firm (BMC offers registered office services)
• Your home address (if you live in Spain)
• Your business premises (if you have a physical location)

Using a virtual office address for the registered office is standard practice for many foreign-owned Spanish companies whose actual operations are elsewhere. The key requirement is that official notifications can be received and actioned promptly. BMC’s registered office service includes mail scanning and forwarding.

The company’s actual place of business (establecimiento principal) can differ from the registered office, but both addresses must be maintained in the corporate records and updated with the AEAT when they change.

Sector-specific licences and regulated activities

Some business activities in Spain require prior authorisation, licences, or inscription in a special registry before commencing operations. The most common ones affecting foreign-owned businesses include:

Financial services: Companies providing investment services, credit, payment processing, or insurance must be authorised by the CNMV (securities regulator) or the Banco de España. These processes can take six to eighteen months and require substantial capital and compliance infrastructure.

Real estate agency: Since 2022, real estate agents in Spain do not require a federal licence but must comply with AML (anti-money-laundering) regulations, register as obligated subjects with the SEPBLAC, and apply customer due diligence protocols.

Food and hospitality: Restaurants, food production, and catering businesses require municipal licences and must comply with HACCP food safety regulations.

Healthcare: Medical practices, clinics, and healthcare service providers require authorisation from the relevant autonomous community health authority.

Import/export and customs: Companies engaged in international trade need an EORI number (Economic Operators Registration and Identification) to operate through Spanish customs. BMC assists with EORI registration as part of our company formation service.

BMC maps all applicable licence and registration requirements during the initial structure consultation, so there are no surprises after incorporation.

Foreign investment notification obligations

Spain requires certain foreign investments to be notified to the Registro de Inversiones Exteriores (Foreign Investment Registry), maintained by the Dirección General de Comercio Internacional e Inversiones (DGCII). The main notification obligations are:

• Prior notification: Required for investments by residents of countries on Spain’s list of tax havens, and for investments in strategic sectors (media, defence, telecommunications, energy, financial services) when the investor is a non-EU/EEA entity and the investment exceeds €500,000 or 10% of the company’s share capital
• Post-investment notification: Required for all foreign direct investments exceeding €3 million within one month of the investment

Most straightforward business incorporations by EU and OECD country residents do not require prior authorisation and the post-investment notification is an administrative formality. BMC handles the notification filing as a standard part of the incorporation process.

Why choose BMC for your Spanish company formation?

BMC is a multi-disciplinary advisory firm with in-house lawyers, tax advisers, and accountants who have incorporated more than 200 foreign-owned companies in Spain. Our company formation service is not outsourced to a third-party gestoría — it is handled entirely by BMC professionals who can advise on the full range of post-incorporation issues: tax residency, employment law, commercial contracts, and ongoing compliance.

We work in English (and Spanish, French, German, Dutch, and Portuguese) and provide every client with a dedicated point of contact throughout the process. Our fixed-price model means you know the total cost before we start.

The typical timeline from initial instruction to operational company with a bank account and VAT registration is six to eight weeks, though expedited timelines are possible where circumstances require it.

Frequently asked questions

Can I use a holding company structure?

Yes. Many clients incorporate a Spanish SL and have it owned by a foreign holding company rather than directly by the individual founders. This can provide tax efficiencies on dividend distributions and capital gains, but it also adds administrative complexity. BMC advises on the optimal holding structure depending on the client’s country of residence and the applicable tax treaties.

What happens if the company makes a loss in the first years?

Corporate income tax losses can be carried forward indefinitely to offset future profits. There is no time limit on loss carryforward in Spain (since 2015). Losses can offset up to 70% of the current year’s taxable base (with a minimum tax of €1 million in taxable base exempt from this limit).

Can I close the company easily if things don’t work out?

Spanish company dissolution requires a shareholder resolution, appointment of a liquidator, payment of all debts, distribution of any remaining assets to shareholders, and registration of the closure at the Commercial Registry. The full process typically takes three to six months and involves notary and registry fees similar to incorporation. BMC advises on voluntary dissolution as part of our restructuring and exit advisory practice.

Do I need a local director?

No. A foreigner who is not resident in Spain can be sole director of an SL. However, if the company employs people in Spain, the director will need an NIE and will likely need a Spanish bank account for payroll purposes. For clients who prefer not to be personally listed as director (for privacy or liability reasons), BMC can advise on alternative governance structures.