Company registration in Spain
- What are the advantages of registering a company in Spain?
- What types of organizational and legal forms of legal entities exist in Spain?
- What is the procedure for opening a company in Spain?
- What documents are required to register a company in Spain?
- What are the taxes in Spain?
- How can our company help?
Spain has always been famous for having a very developed economy, which attracted foreign investors from around the world. Why is that? The answer can be found in its geographical location, which allows the state to access the North Atlantic Ocean and the Mediterranean Sea. In addition, there is also a land corridor to Portugal and France. All this makes this jurisdiction popular for registering a business.
Company registration in Spain
What are the advantages of registering a company in Spain?
- Membership of the European Union allows Spanish companies to have access to some of the largest international and European markets;
- Spain has a high GDP per capita, as well as a developed infrastructure (availability of local transport, logistics, development of Spanish cities, etc.);
- Although Spain does not have the lowest taxes among other European countries, the government is constantly introducing various government programs that help optimize the tax burden among private businesses by reducing various rates and fees;
- Spain is the leading IT market in Europe, as can be seen from the statistics of registered IT companies - more than 33 thousand;
- The Spanish government has a direct interest in attracting foreign investment to the country, as it actively promotes support for start-ups through the creation of grant programs and funding through public funds;
- The presence of double taxation agreements with other countries of the world allows you to pay taxes at the main location of the legal entity in Spain.
What types of organizational and legal forms of legal entities exist in Spain?
In the Kingdom of Spain, the most common types for registering a company are the following types of legal form of legal entity, namely:
- Individual entrepreneur (empresa Individual or empresa private) - best suited for individuals who plan to engage in entrepreneurial activities, but will not hire many employees and will not have a large annual turnover (for example, freelancers, programmers, web designers, etc.). d.). However, the main feature of this type of legal entity is that the individual entrepreneur is fully responsible for any possible debt of the company and the submission of tax returns;
- Limited liability company (SL or SRL) is the most common type of company in the Kingdom of Spain, as it is suitable for both small and medium-sized businesses. The company can consist of only one person, and the minimum authorized capital is 3000 EUR;
- A public limited company (SA) is a popular solution for starting a large company trading shares on the stock market. The minimum authorized capital is from 60 EUR with a mandatory payment of 000%;
- Branch of a foreign company (Sucursa) - may be a necessary option for registering a company if the owner has decided to expand his own business. The main feature of a branch is that it does not have its own legal personality, and therefore is considered subordinate only to the parent company.
What is the procedure for opening a company in Spain?
- Selecting the appropriate organizational and legal form of a legal entity;
- Obtaining a certificate of a unique company name in Central Trade Register;
- Drawing up the company's constituent documents and developing the charter;
- Opening a bank account in Spain, where you need to deposit the appropriate amount of authorized capital;
- Registration with the tax authorities and obtaining a taxpayer number;
- Carrying out registration in the commercial registers of the selected Spanish province;
- Obtaining municipal or state permits for the ability to carry out business activities of the enterprise (if necessary);
- If you plan to hire staff to work in a company, you should also register with the Spanish social security system.
What documents are required to register a company in Spain?
- three names for the future company, which must be unique;
- national and foreign passports of the founders (directors) of the company;
- confirmation of their registration address (providing bills for utility bills);
- a detailed description of the directions of the company’s economic activities;
- TIN of the founders (directors) of the company;
- a power of attorney, which must be notarized and have an apostille;
- contact details (mobile phone number, email);
- information about the marital status of the founders (directors) of the company.
Personal income tax in Spain consists of progressive rates, namely: 19% - income up to 12 EUR; 450% - income from 24 EUR to 12 EUR; 451% - income from 20 EUR to 200 EUR; 30% - income 20 EUR to 201 EUR; 35% - income above 200 EUR. If a person is an EU citizen, then he pays a flat tax rate of 37%.
Income tax in Spain is 25%. However, if the company is newly created, then for the first two years a rate of 15% is applied. Capital gains are taxed at the general corporate tax rate in Spain.
VAT: 21% tax is the standard rate in Spain; tax of 10% - for some food products, passenger transportation, transport services, etc.; 4% tax on essential goods (bread, milk, cheeses, medicines, dentures, etc.); 0% tax - in most cases, Spanish legislation does not provide for it.
Regarding taxes on dividends in Spain, it is worth noting the following. If you receive dividends or interest in Spain, the tax rate will be 19%, royalties - 24%. Such rates may be reduced based on double tax treaties and EU directives.
Social contributions in Spain are paid by both employers and employees from wages. The rate for employers is 29,9%, and for employees - 6,35%.
Thus, low taxes in Spain make it possible to stably carry out business activities in practice in this jurisdiction, as well as optimize the tax burden for business.
Company registration in Spain
Opening a company in any foreign country has its own legal features, since each state has different legal norms and the process of registering a company may differ. Therefore, if you need to open a company in Spain, then the best option would be to contact qualified specialists from the consulting company Jurisprudential. Our lawyers will familiarize themselves in detail with the client’s wishes for registering a business in Spain and will help to implement them in practice, since we have many years of experience in this area.
To clarify the cost of registering a company in Spain, please contact our company for a free consultation, since each situation in practice is individual, and therefore prices for services depend on many factors.