Company incorporation in Spain

If you do business in Spain there may be a point that it makes sense to set up a local company. Then you need to know how to comply with local regulations and who can help you.

This article describes:

the most likely types of company to set up;
how you do this and who can help you;
a few important fiscal regulations.

Your legal entity in Spain

Spain is an attractive destination for foreign businesses due to its strong economy, access to the European Union, and growing markets in industries like tourism, technology, and agriculture.

Most Common Business Forms for Foreign Companies

The most common legal structure for foreign businesses in Spain is the Sociedad de Responsabilidad Limitada (SL).

Similar to a limited liability company (LLC) in other jurisdictions.
Requires a minimum share capital of €3,000, fully paid upon incorporation.
Liability is limited to the company’s assets, protecting shareholders from personal liability.

For larger businesses, the Sociedad Anónima (SA) is an alternative, requiring a minimum share capital of €60,000.

Setting Up a Company in Spain

The process to incorporate an SL involves the following steps:

Obtaining a tax identification number (NIE) for all shareholders and directors.
Checking the availability of the company name and reserving it with the Commercial Registry (Registro Mercantil).
Drafting and notarizing the company’s Articles of Association (Escritura Pública).
Depositing the share capital in a Spanish bank account and obtaining a deposit certificate.
Registering the company with the Commercial Registry and obtaining a tax number (CIF).

Foreign nationals can act as directors (Administrador) of an SL or SA. Residency is not mandatory, but a local business address is required.

Taxation and Withholding Taxes

Spanish companies are subject to corporate income tax (Impuesto sobre Sociedades) at a standard rate of 25%.

Regarding dividends:

Dividends paid to foreign shareholders are subject to a withholding tax of 19%, which may be reduced under tax treaties.
Spain has an extensive double taxation treaty network to avoid double taxation and reduce withholding tax rates for foreign investors.

Service Providers for Company Incorporation

These firms assist foreign businesses with legal, administrative, and tax-related processes to ensure a smooth incorporation experience.

Do you need a local company?

A local entity is not always the answer. A distributor, an agent or an employer of record gives you presence in the market without the administration of your own company.

You do need one when you hire local staff, hold stock or an office, bid for public tenders, or when your activity creates a permanent establishment for tax purposes. The alternative is usually a branch: cheaper to set up, but the parent company stays liable.

Do you need help in Spain?

Our service providers are local specialists. They know the market, the regulations and the parties that matter, and they can support you with the steps on this page.

Ask a professional

Setting up a company in Spain in three steps

Step 1

Choose the legal form

Compare a limited company, a branch and a representative office on liability, minimum capital, local director requirements and what a bank will accept.

Step 2

Incorporate and register

Prepare the statutes and identification documents, register with the trade register and the tax authority, and open a local bank account — usually the slowest step.

Step 3

Stay compliant

Arrange bookkeeping, VAT and payroll from day one and note the filing deadlines. Fines for late annual accounts are common and easy to avoid.