Pros and Cons of creating a Spanish or Foreign Company
How to set up and create a Spanish company
If you are thinking about starting an economic activity in Spain, you should know that one of the most attractive alternatives is the constitution of a private limited company. By forming this company, you can separate the assets that you place in your company as part of the capital base, from your personal assets, thus safeguarding your own assets against potential future debts.
The first step to set up a Spanish company is the choice of the company name. Once decided, you must try to reserve the chosen name at the Central Company House. You can choose up to five names, which you must list in order of preference. If any of your preferences are not currently being used and the name chosen is permitted as it is in accordance with Company House rules, you will receive a certificate reserving the name for a period of six months.
The next step will be to open a bank account in the name of the company being created, in which the social capital must be deposited and if the contribution is monetary the capital base may not be less than €3,000.
After receiving confirmation of the reservation of the company name and with documentary proof of the opening of the bank account you must sign a public deed of the company constitution at the offices of a notary.
Included within this document will be the articles of association of the company, details of its activities social address, legal representation, etc.
Once the deed is signed, a provisional CIF which is the tax identification number of the new company may be requested.
Next, the Company Operations Tax should be paid. However, at the moment, the creation of a new company is exempt from paying this tax (which is confirmed in accordance with article 45.I.B.11 of the Tax Law).
Once this has been done, the deed must be presented to Company House, in the company domicile, for entry and registration. Once the approval of the registrar is received, the company will be ready to act.
When the company is registered, and as a final step, you must register it with the appropriate tax office based on the professional activity in which the company will be involved. This is done by completing form 036, which must detail the activity and tax regimes to which the company will be subject.
Another alternative: operate in Spain by using a foreign company
If you already have a company registered in another country, you do not have to set up a new company in Spain if you do not wish to. You can request a Spanish CIF number for your foreign company and then you will be able to register the company’s economic activity in the Agencia Tributaria (tax office).
Please note that to apply for a Spanish Tax Number (CIF) for the company, you must submit an official certificate with an apostille (confirmation document), from the Companies House in the country in which your business is registered which certifies its existence
Please also bear in mind that if the legal representative of the company is not a tax resident in Spain, it or you must appoint, in a public deed, a tax representative resident in Spain who will act on behalf of the company and will be liable for the company’s actions in Spain.
If you wish to create a company in Spain or carry out a professional activity with your foreign company in Spain, contact us and we will help you.
The information provided in this article is not intended to be legal advice, but merely conveys general information related to legal issues.
Carlos Baos (Lawyer)
White & Baos
Tel:+34 966 426 185
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