How to Set Up a Company in Spain
Setting up a company in Spain requires following a series of legal and administrative steps to ensure the business complies with all current regulations. Before starting any trading activity, it is essential to understand the necessary requirements for properly incorporating a company and avoiding future legal complications.
One of the first steps in setting up a company in Spain is choosing the most appropriate legal structure. The Sociedad Limitada (SL) —equivalent to a Private Limited Company or LLC— is the most popular option. It offers limited liability for shareholders and a flexible framework for starting a new business.
To incorporate an SL, several legal procedures must be completed. These include obtaining a negative company name certificate, drafting the Articles of Association (Bylaws), signing the public deed before a Notary Public, and registering the company with the Commercial Registry (Registro Mercantil). These steps are essential to set up a company in Spain.
Relying on a law firm specialized in Spanish company law can streamline the entire process. Legal professionals provide expert advice on legal requirements, minimum share capital obligations, obtaining the Tax Identification Number (NIF) , and registering the corresponding economic activity with the tax authorities.
If you’re considering setting up a company in Spain, or you don’t know how to set up company Spain, contact Gabinete Law — we’ll handle the entire process for you.
How to Incorporate a Spanish Company Step by Step
Setting up a company step by step involves a series of essential legal and administrative processes to guarantee proper incorporation and operation of the Spanish LLC — or more accurately, the Spanish SL.
- Company Name Reservation
- Establishing the Share Capital and Ownership Percentages.
- Appointment of Directors
- Registering as Corporate Self-Employed
- Drafting the Articles of Association
- Signing Before a Notary and Filing with the Commercial Registry
1. Company Name Reservation
The first step is obtaining the company name. This involves verifying and reserving the legal name of the business to avoid duplication with existing entities.
The Negative Company Name Certificate can be requested online via the Central Mercantile Registry website.
2. Establishing Share Capital and Ownership Percentages
Next, the share capital must be determined. Current legislation requires a minimum share capital of €3,000. You must also define whether the contribution will be made in cash or in kind.
Note: Under current law, partners are not required to physically deposit the cash upfront if they sign a declaration of responsibility for that amount within the public deed of incorporation before the Notary.
It is also crucial to define the ownership percentage for each partner, as this will influence decision-making and profit distribution.
3. Appointment of Directors
The company directors must be appointed. It is important to consider the different types of governance structures available (e.g., Sole Director, Joint and Several Directors, or Joint Directors) based on the specific needs of the business.
- Sole Director: A single director manages the company and can act alone.
- Joint and Several Directors: Any director may act individually, and their signature binds the company.
4. Registration as a "Corporate Self-Employed"
Founding partners who act as directors and hold a minimum of 25% of the company’s share capital must register as “Autónomo Societario” (Corporate Self-Employed) with the Spanish Social Security system.
5. Drafting the Articles of Association
Drafting the articles of association is another key step: this document sets out the internal rules that will govern the company. Anything not covered by the articles of association will be governed by the Spanish Capital Companies Law.
Tip: If you opt to use the Standardized Bylaws provided by the CIRCE system, Notary and Commercial Registry fees are significantly reduced.
At Gabinete Law, we provide tailored advice and draft the Articles of Association to suit your particular requirements.
6. Signing Before a Notary and Filing with the Commercial Registry
Finally, it is essential to sign the Public Deed of Incorporation before a Notary Public and proceed with the filing at the corresponding Commercial Registry. Additionally, you must register the company with the Spanish Tax Agency (Agencia Tributaria) to obtain the definitive NIF.
Important: The start of the company’s activity is the date established in the Articles of Association. It does not depend on the completion of the Commercial Registry filing, but it cannot be a date prior to the day the deed was executed before the Notary.
How Much Does It Cost to Set Up a Company in Spain?
Excluding share capital—which currently does not need to be paid in upfront—the combined cost of Notary fees, Commercial Registry charges, and legal fees ranges from €400 to €3,000, depending on the specific characteristics of the company and the level of customization required for the Spanish LLC.
Following these steps ensures a solid legal foundation for any business venture in Spain. Contact Gabinete Law for expert legal advice and let us handle the entire process of incorporating your Spanish LLC / Sociedad Limitada.
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