Setting up a company in Spain for non-resident foreigners

The creation of a company in Spain for non-resident foreigners is possible. But it is necessary to keep in mind the limitations you will have due to your residential status.

If the foreigner’s intention is to be part of a company as a capitalist partner and the work is in charge of persons hired for this purpose or is in charge of other partners residing in Spain who have a work person in the country, it is not necessary to process the work permit authorization.

On the other hand, if the purpose is to establish a company and work in it, a residence and self-employment permit is required.

Types of companies

In Spain there are several types of companies, which can be classified into individual and corporate companies.

Sole proprietorships are those that do not have legal personality but physical personality.

Corporate companies, unlike the previous ones, do have a legal personality, that is, a personality different from that of their partners.

Additionally, they must be registered in the Mercantile Registry and must comply with the formality of having a public deed.

Some of the companies that exist in Spain are:

General partnership:

The partners are organized to have the same name and corporate name. The minimum number of partners is 2 and its liability is unlimited; however, no capital is required for incorporation. In tax matters, they must pay corporate income tax.

Limited partnership:

The minimum number of partners is 2 and the limited partners contribute capital and their liability is limited to that contribution. No capital is required for incorporation and in tax matters, they must pay corporate income tax.

Limited partnership by shares:

One or more partners manage the partnership and are personally liable for the debts, while the limited partners are limited in liability. The minimum number of partners is 2 and the minimum capital is €60,000 and corporate income tax is paid.

4. Limited partnership:

The minimum number of partners is 1 and liability is limited to the capital contributed. A capital of €3,000 is required for incorporation and, for tax purposes, corporate income tax is paid.
This company has varieties:

• Sole proprietorship: It is conditioned to have only one partner.
• New company: it is required to have a maximum of 5 partners. It has some tax benefits, such as the option to defer or split certain taxes.
• Successive formation: There is no minimum share capital; however, if it reaches €3,000 it becomes a limited liability company.

5. Corporation:

The number of partners is not conditioned, so it can even be 1 and the liability is limited to the capital contributed. The minimum capital is €60,000 and corporate income tax is paid.

6. Labor company:

This may be anonymous or limited. In both partnerships, the employees who have a relationship with the partnership will be the partners.

In the case of a labor limited partnership, the minimum number of partners is 2 and the liability is limited to the capital contributed. The minimum capital is €3,000.

The labor corporation, on the other hand, has a minimum number of 2 partners and the liability is limited to the capital contributed. The minimum capital is €60,000 and corporate income tax is paid.

This company may have some tax advantages, such as exemption from Transfer Tax and Stamp Duty on incorporation and capital increase.

7. Cooperative society:

The number of members depends on the grade of the cooperative. If it is a first grade cooperative (the members can be individuals or legal entities), the minimum number of members is 3, and if it is a second grade cooperative (the members are other cooperatives), the minimum number of members is 2.

Liability is limited to the capital contributed and the capital is that established in the bylaws. It has a specific regime for the payment of corporate income tax.

8. Sole proprietorship:

A natural person who engages in an activity with the intention of making a profit and does so personally, directly, habitually and on his own account. The number of partners is only one and has unlimited liability.

In addition, no minimum capital is required for incorporation and in tax matters, personal income tax must be paid.

9. Private civil society:

It is formed when several persons share a minimum of 2 persons and unlimited liability. No minimum capital is required for incorporation and, for tax purposes, personal income tax must be paid.

10. Community of property:

It can be constituted when a property is owned by several persons and is part of a common business activity. The minimum number of partners is 2 and they have unlimited liability for corporate debts.

No capital is required for incorporation and in tax matters, they must pay personal income tax.

Requirements and procedure

If you are interested in opening a company in Spain, you will need to complete the following steps:

1. Verify that the intended company name is free or available. This verification is carried out at the Central Mercantile Registry.
2. Deposit in a credit institution the contributions to the capital stock made in cash. Then, the certificate with the names of the founding partners is obtained.
3. To have the bylaws approved by the founding partners.
4. To notarize the incorporation of the company. This document must contain the appointment of the administrators, the purpose, the capital and the registered office.
5. File the self-assessment tax return for corporate income tax and then register the notarial deed in the Commercial Registry.

Please note that you will also need to obtain the NIE or NIF. In the case of a natural person, obtain the NIE or Foreigners Identification Number (Número de Identificación de Extranjeros). In the case of a legal entity, the NIF or Tax Identification Number.

Duration

The time it can take to set up a company varies greatly. However, for the registration of the articles of incorporation in the Commercial Registry, the maximum term would be 15 business days.