Setting up a company in Spain

Setting up a company in Spain: A how-to guide in 7 easy steps

I ncorporating a company in Spain is not a much different process than in most countries around the globe and it can be done in a matter of days following the proper guidance. As it happens to be it is usually more important to understand the legal consequences and have the proper advice when forming a company than the process itself.

This is why we have created this guide that will walk anyone through the basics stepsThis guide talks about forming a standard small to medium size company of setting up a company in Spain. To avoid making this article so tedious we will stick to the most important steps and essential information when creating a company, therefore, if you have any questions you contact us in the contact button above so we can discuss in more depth.

Step 1: What type of company suits better my needs?

There are two main types of companies in Spain which are the Sociedad de Responsabilidad Limitada (SL or SRL) and the Sociedad Anónima (SA).

  1. The first type, that is the Sociedad de Responsabilidad Limitada (SL or SRL), is the most used due to the simplicity of its management and the limited liability offered to its shareholders.
  2. The second option, that is the Sociedad Anónima (SA), is less used in the everyday traffic and, unless you aim to go public or trade in specific sectors such as banking, investment or insurance, it is less common.

In this chart, you can see the main differences between an SL and an SA company.

NOTE : In the case that you are a foreign company you might as well consider trading in Spain through a branch of the parent company.

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Step 2: Choosing a company name

Before setting up a company in Spain the Companies Registry must issue a certificate confirming that the names chosen for the company are valid and available for its use.

To maximize the possibilities of being granted with a name general terms and short designations must be avoided as they would be most likely already taken or similar to an already registered company, in which case the application will be rejected.

If time is an issue the Spanish Companies Registry has an off the shelf list of names available on the following link.

The certificate stating the availability of a name will be issued for 3 months (renewable for 3 extra months), a period in which the company must be incorporated.

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Step 3: Obtain NIE/NIF numbers for the shareholders/directors

An essential requirement for setting up a company in Spain is obtaining a Numero de Identificación de Extranjero NIE number for a natural person, or a Número de Identificación Fiscal NIF number for the foreign entity that would become a shareholder or director in the newly formed company.

An NIE/NIF number is a tax identification code given to any foreign person/entity that, for social, professional or economic reasons – such as creating a company -, must identify itself before the Spanish authorities

Registration of the foreign natural person or a foreign entity with the Spanish tax office, once the NIE/NIF number is granted, is also mandatory through a 030 or 036 form.

NOTE : See our FAQs section for further information on what is and how to obtain an NIE number or a NIF number.

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Step 4: Open a bank account

As described in the SL vs. SA chart mentioned above, limited liability companies must have a founding capital which, normally, is deposited by the founding partners in a bank account opened in a Spanish bank.

NOTE : The founding partners might opt for setting up the company without a founding capital by remaining jointly liable with the company for its debts.

The Spanish Corporate Enterprises Act allows companies to be formed providing goods or rights liable to economic appraisal other than money too (properties, patents, assets, etc.). Ask our experts about it.

Once the name reservation certificate from the Spanish Companies Registry is granted, we can go to any bank in Spain where they will open a temporary bank account in which the founders will deposit the founding capital, which will remain frozen in this account until the company is effectively incorporated and registered in the Spanish Companies House.

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Step 5: Draft the articles of association and decide how the company will be managed

This is an essential part often underestimated when setting up a company in Spain. In the articles of association, the founding partners decide the essential matters of the company i.e. founding capital, shareholders, company address, object, duration, internal management, directors and shareholders meetings, etc, it is fundamental that the articles of association are adapted to the company needs.

Standard model articles of association are available to both SL and SA companies, causing in most of the cases to not draft the articles of association from scratch, but adapting it to the will of the founders.

Articles of association can be drafted and registered in the English language when accompanied by a Spanish translation.

NOTE : See other useful posts in our articles section where we discuss recommendations and things to keep in mind when incorporating and managing a company in Spain (i.e. director’s liability, shareholders agreements, decision taking majorities, etc.).

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Step 6: Sign the incorporation deed of the company before a notary public

To validly setting up a company in Spain a deed of incorporation must be signed before a notary public. This deed of incorporation will include the articles of association which would have been previously drafted by the founding shareholders.

In case of a third company being the shareholder whoever represents it must grant a UBO declaration (Ultimate Beneficiary Owner) before the notary public in which they identify the ultimate beneficiary owners who hold or control, directly or indirectly, more than 25% of the company shares, majority of voting rights, or controls the company by other means.

NOTE : Shareholders and directors of the newly formed company must be present on the signature or duly represented by an attorney acting on their behalf.

See our FAQs section for further information on how to make a power of attorney so an attorney can represent you in the incorporation of the company.

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Step 7: Register the company with the Spanish tax office (VAT number obtention)


From a legal perspective the company will be incorporated since the signature of the deed of incorporation, which means that the company can start trading right away (e.g. carry out business, sign contracts, etc.), however, the founders will remain jointly liable with the company until due registration.

Registration in the Spanish Companies House is mandatory.


Once incorporated all limited liability companies must register with the Spanish Tax Office to obtain a NIF number which is equivalent to the VAT number TIN number in other countries.

From this moment the company will be required to a minimum set of tax compliance and bookkeeping formalities.


Before starting the activity the company would normally be registered with the Social Security system and obtain its employer number Código de Cuenta de Cotización.

Time-wise the incorporation process usually takes from two to six weeks depending on the complexity of its structure. Proper legal knowledge and experience can speed up the process considerably.

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At Legaliaspain we are experts creating legal structures. Do not hesitate to contact us and get in touch with one of our English speaking lawyers for further information on setting up a company in Spain.