Set up a company in Spain.
The Eurozone’s fourth-largest economy, gateway to Latin America, and home to one of the EU’s most aggressive recent rounds of SME tax cuts. Senior-led setup from our Madrid office.
To set up a company in Spain, you obtain a foreigner’s tax number (NIE) for non-resident founders, reserve the company name at the Central Commercial Registry, draft the Articles of Association, deposit the share capital at a Spanish bank, sign the public deed of incorporation before a notary, and register with the Provincial Commercial Registry (Registro Mercantil). You then obtain the company tax ID (CIF/NIF) and register with the Tax Agency (AEAT) and Social Security (TGSS).
For most international businesses, the right vehicle is a Sociedad Limitada (S.L.) — equivalent to a UK Ltd. Since the October 2022 “Crea y Crece” reform, the minimum share capital is €1 (special legal-reserve rules apply below €3,000). Standard formation takes 2 to 4 weeks.
Grant & Graham’s Madrid office runs the entire process — structure advice, NIE applications, notary, Registro Mercantil filing, AEAT registration, VAT (Modelo 036), Social Security, banking, and ongoing compliance — through a single senior point of contact.
One of the EU’s most aggressive SME tax cuts.
Spain’s headline CIT is 25%, but the rate that actually applies to most international businesses is materially lower. Under Ley 7/2024, micro-enterprise and SME rates have been cut sharply and are scheduled to drop further through 2029. New businesses pay just 15% for their first two profitable years. The result is one of the most favourable CIT regimes in major-economy Europe for companies under €10 million in turnover.
Other notable items: Standard VAT (IVA) is 21% with reduced rates of 10% and 4%. No VAT turnover threshold — registration via Modelo 036 is required before the first invoice. The ETVE holding regime offers a 95% participation exemption on dividends and capital gains from qualifying foreign subsidiaries. The Beckham Law allows relocated foreign professionals to pay a flat 24% on Spanish income (plus foreign-income exemption) for up to six years.
Nine reasons businesses choose Spain.
The Eurozone’s fourth-largest economy, with deep capital markets, a top-five global tourism sector, and natural access to 600+ million Spanish-speaking consumers across Latin America.
Major Eurozone economy
Fourth-largest economy in the Eurozone after Germany, France and Italy. GDP of approximately €1.6 trillion. Deep capital markets, sophisticated banking, full EU single-market access.
Gateway to Latin America
Spain is the natural launch pad for European businesses targeting Latin America. Shared language, deep historical commercial ties, established corporate routes through Madrid. Critical for any business with LatAm ambitions.
€1 minimum capital
Since the October 2022 “Crea y Crece” reform (Ley 18/2022), the minimum capital for a Sociedad Limitada (S.L.) is just €1 — down from the previous €3,000. Special reserve rules apply below €3,000.
Aggressive SME tax cuts
Ley 7/2024 reduced corporate tax for SMEs and micro-enterprises — with further annual cuts legislated through 2029. Micro-enterprises pay 19%/21% in 2026; SMEs pay 23% dropping to 20% by 2029.
ETVE holding regime
The Entidad de Tenencia de Valores Extranjeros regime offers a 95% exemption on dividends and capital gains from qualifying foreign subsidiaries — making Spain one of Europe’s strongest holding jurisdictions for international groups.
Talent & Beckham Law
The Beckham Law allows qualifying foreign professionals to pay a flat 24% on Spanish-source income (and remain tax-exempt on foreign income) for up to six years — powerful for international executive relocations.
Startup Law & 15% CIT
ENISA-certified startups (under five years old; seven for biotech/energy) qualify for a 15% CIT rate for their first two profitable years — one of the most competitive new-business CIT rates in major-economy Europe.
R&D & capitalisation incentives
Generous R&D tax credits (up to 42%), accelerated depreciation on electric vehicles, and the enhanced capitalisation reserve (20% of retained profit, up to 30% with 10%+ workforce growth) materially reduce the effective rate.
Quality of life & cost
Spain consistently ranks in the global top tier for quality of life, healthcare and climate. Salary, office and operational costs remain materially lower than France or Germany. Strong magnet for international talent.
Eight legal structures — one usually fits.
For most international businesses entering Spain, the S.L. is the starting point — equivalent to a UK Ltd. The S.A. is for larger entities; the Branch or Representative Office for limited initial presence.
Limited Liability Company
The standard structure for trading and holding businesses. Separate legal entity, limited liability. Minimum €1 share capital since 2022. Single shareholder allowed (S.L.U.). Shares not freely transferable.
Joint-Stock Company
For larger businesses, those raising significant external capital, or those intending to list publicly. Minimum €60,000 share capital, of which at least 25% must be paid up at registration.
New Enterprise Limited Co.
Simplified S.L. variant designed for small businesses and startups. Faster registration through the CIRCE single-window system. Maximum 5 shareholders at incorporation; capital between €3,000 and €120,000.
ETVE Holding Company
An S.L. or S.A. with an ETVE election. 95% exemption on qualifying foreign dividends and capital gains. Strong tool for international group structures and Latin American holdings.
Sole Proprietorship
Single owner, no separate legal personality, full personal liability. Subject to personal income tax (IRPF, progressive 19%–47%) plus the monthly RETA Social Security contribution. Simple to start.
General Partnership
Two or more partners with unlimited joint and several liability. No minimum capital. Rarely chosen by international investors except in specific professional services contexts.
Branch
An operating branch of a foreign company. Not a separate legal entity — the parent retains full liability. Must be registered with the Mercantile Registry and AEAT. Treated as a Spanish permanent establishment for tax.
Representative Office
Limited to marketing, liaison and promotional activities. Cannot trade or conduct commercial transactions in Spain. Useful for initial market exploration.
Talk to Madrid first
S.L. for almost everyone. S.A. for larger or listed entities. ETVE for international holdings. SLNE for genuine startups using the CIRCE express route. A 25-minute call with our Madrid team usually settles it.
Book a call →From decision to live entity.
The end-to-end registration sequence for a Spanish S.L. — managed by Grant & Graham’s Madrid office with senior Spanish counsel and accountant, end-to-end.
Obtain NIE numbers for non-resident founders
Foreign individuals acting as shareholders or directors must obtain a Foreigner’s Identification Number (NIE) from the Spanish Police or, more commonly for non-residents, from the Spanish consulate in their home country. Processing typically 2 to 4 weeks.
Reserve the company name
Apply for the Negative Name Certificate (Certificación Negativa de Denominación Social) at the Central Commercial Registry (Registro Mercantil Central). Three name options are submitted; the certificate confirms the selected name is unique and reserves it.
Registro Mercantil Central →Prepare the Articles of Association
Draft the company’s constitutional documents (estatutos sociales) in Spanish — including share structure, director appointments, registered office, and corporate purpose. The administrative body structure (sole administrator, joint, or board) must be defined.
Open a temporary capital account & deposit share capital
Open an initial capital account at a Spanish bank. For an S.L., deposit at least €1 (with special reserve rules applying below €3,000). The bank issues a deposit certificate confirming the capital has been received.
Sign the Public Deed of Incorporation before a Notary
All shareholders (or their attorneys-in-fact under a notarised power of attorney) appear before a Spanish notary to sign the Escritura Pública de Constitución. Required documents: NIE certificates, name reservation, bank certificate, draft Articles. Notary fees typically €500 to €800.
File the public deed at the Provincial Commercial Registry
Submit the notarised deed at the Mercantile Registry of the province where the company is registered. The company achieves full legal personality once registered. Standard turnaround is 7 to 15 working days; registry fees €100 to €400 depending on capital and province.
Spanish Mercantile Registry →Tax registration with AEAT (CIF / NIF / Modelo 036)
File Modelo 036 with the Spanish Tax Agency (AEAT) within one month of incorporation to obtain the company tax ID (CIF/NIF), register for corporate tax, register for VAT (IVA), and declare intra-EU operations if applicable. There is no VAT turnover threshold — registration must occur before the first invoice.
Agencia Tributaria →Social Security registration (TGSS)
Register the company and its administrators with the Social Security Treasury (Tesorería General de la Seguridad Social). Working administrators of an S.L. enrol under the autónomo societario regime (RETA). Employee enrolments follow before any hiring.
Seguridad Social →Operating bank account & ongoing compliance
Convert the temporary capital account into a full operating account. Set up bookkeeping aligned with Spanish accounting standards (PGC). Quarterly VAT (Modelo 303), quarterly corporate tax instalments (Modelo 202), annual CIT return (Modelo 200), annual VAT summary (Modelo 390), and annual accounts filed with the Mercantile Registry. Verifactu electronic invoicing system becomes mandatory from 1 January 2027.
What it costs to incorporate & run.
All figures are indicative for a standard S.L. setup with one shareholder and one director. Spain is more expensive than CEE jurisdictions on setup but materially cheaper than France, Germany or the Netherlands on ongoing operating costs.
One-time setup
Excludes share capital. NIE costs only apply where founders are non-resident; Spanish-resident founders skip this step.
Ongoing monthly / annual
Scales with payroll size, transaction volume, and audit requirements (mandatory above turnover/asset thresholds).
The legal framework to know.
A summary of the core legislation governing companies in Spain — we coordinate with senior Spanish counsel where specialist advice is needed.
Corporate Law
- Companies Act Ley de Sociedades de Capital
- Civil Code Código Civil
- Crea y Crece Law Ley 18/2022
Tax Law
- Corporate Income Tax Act Ley del Impuesto sobre Sociedades
- VAT Act Ley del IVA
- Startup Law Ley 28/2022 · Ley 7/2024 SME reforms
Employment Law
- Workers’ Statute Estatuto de los Trabajadores
- General Social Security Act
- Occupational Health & Safety Law
Data Protection
- Spanish Data Protection Act LOPDGDD
- EU GDPR (directly applicable)
- Spanish Data Protection Agency AEPD
Environmental Law
- Environmental Protection Law
- Ministry for Ecological Transition
- EU environmental directives
Intellectual Property
- Patents Act Ley de Patentes
- Trademarks Act Ley de Marcas
- Copyright Act · OEPM Spanish Patent & Trademark Office
Spain, answered.
Four steps from enquiry to live entity.
Discovery call
30-minute conversation to understand your business, tax position, shareholder structure and what you actually need from the Spanish entity. Madrid team.
Recommendation
Senior advisory on the right structure (S.L., S.A., ETVE, Branch), share split, banking partner, NIE process and ongoing compliance. Fixed quote.
End-to-end formation
NIE applications, notary, Mercantile Registry, AEAT Modelo 036, VAT setup, Social Security, banking introductions — coordinated end-to-end by our Madrid team.
Ongoing support
Retained accounting, quarterly VAT and CIT, payroll, annual filings, Verifactu compliance from 2027, and structural changes as you scale.
Ready to incorporate in Spain?
Our Madrid team will tell you in 25 minutes whether Spain is the right jurisdiction for your business — and if it is, we’ll handle the setup end-to-end from Madrid.