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Creating a company in Spain

Steps for setting up a Business in Spain

Generally, to set up a company in Spain it is necessary to follow the steps detailed below, it is always convenient to count with the assistance of a Lawyer that will provide the due legal assessment.

1.- Application before the Commerce registry for a negative name certificate.

Before creating a company, we must decide the name of the company; this will become the company denomination.

In order to obtain this denomination it is necessary to apply at the corresponding commerce registry for a negative name certificate, this is done by duly filling in the application form on which we shall state a maximum of 5 denomination options and the names of some of the future shareholders.

2.- Application for  C.I.F.: Fiscal identification number

This is a number used for fiscal identification, a number that all Spanish companies must have when they are set up in order to be able to start their commercial relationships. This number in functionality is similar to the United Kingdom VAT number. The CIF number is applied for at the Spanish tax authority’s office “Delegation de Hacienda”

3. - The bank deposit

It can be set up at any bank or building society, the minimum amount will vary depending on the kind of company to be set up, for example, the minimum for a limited company (S.L. – sociedad limitada) is 3,000€ whereas for a Public limited company (S.A. – Sociedad Anonima) the minimum is 60,000€.

4. - Company set up deeds before a notary public

The setting up of a company should figure on Public Deeds and must be signed the share holders before a Notary Public. This deed should state the following data:

  • Shareholders: Name, address, profession/occupation , marital status, and marital regime.
  • Name of the company to be set up
  • Registered company service address
  • Company commerce object, this means, the activity that the company will carry out.
  • The subscribed capital: Depending on the kind of company, the company will be required to integrally outlay its assets, not only cash but also property and other assets.

The company must also indicate the share of capital subscribed or outlaid by each of the shareholders and the number of shares (socidad anónima – public limited company) or participations (sociedad limitada – limited company) in which it is divided.

  • The transmission regime for shares or participations.
  • The company administration organ: Appointing the position and attributing the position faculties.
  • The statutes by which the company will be ruled.

5.- Patrimony Transmission tax and legal act document tax -  “Impuesto de Transmisiones Patrimoniales y Actos Jurídicos Documentados” (company operations module)

This tax is satisfied by presenting the corresponding tax form “modelo” at the tax office “oficina liquidadora” corresponding to the location. Generally, this task will take up to 4 days to be finalised.

From the 03/12/10 the setting up of companies is exempt from paying this tax

6.- Inscription and publication at the commerce registry

Once the Patrimony Transmission tax and legal act document tax have been satisfied, we are able to inscribe the company at the Commerce registry. This takes between 5-9 days to complete.

7.- Act and shareholder books

These books are obligatory for companies and are legalised by the commerce registry of the corresponding province. In these books we must specify the company annual board meetings as well as the variation in shareholders that can be produced during the company lifespan.

8.- Start of activity declaration (Modelos 036 e IAE)

Every company is obliged to inform the tax authorities “Agencia Tributaria” of the start of the activities that the company is going to carry out. This communication is made via the form “modelo 036”.

9.- Register the company with the social security.

In order to be able to contract employees it is necessary for the company to be registered wit the social security. To apply for registry it is necessary to have the form “modelo 036” that is the communication of the start of the company activity.

10.- Self employee registry

People exercising direction and management functions that entail being in the administrator position or providing other lucrative services in a regular, direct and personal manner with effective direct or indirect control over the company are  legally required to be registered under the Special Self Employee Regime.

This control exists when the shares or participations of the worker suppose at least half of the company capital to which the worker provides services to, and also when any of the following circumstances concur:

  • At least half of the company capital of the company for which the services are provided is distributed between shareholders with whom you live with and with whom you are united by marriage, family or adoption up to the second grade.
  • The participation of the company capitol is 33% or more.
  • The participation of the company capital is 25% or more as long as the individual has the atributed functions of direction and management of the company.

Operations that the client must put in to effect:

  • Open up a bank account and make a deposit to cover the initial company capital. On the day of formalisation of the company set up by means of signing deeds before the notary public, a bank certificate to prove this deposit will be required.
  • Send us the NIE/DNI ‘s of the shareholders, passports, address, marital status and profession/occupation
  • Appoint one or various administrators for the company, these do not have to be shareholders in the company that is going to be set up.
  • Sign the corresponding documents at the Notary office before the a Notary Public. Spanish solicitors in London

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