How to set up a limited company (SL) in Spain step by step

Before you start: decisions to settle first

Most delays come from decisions that had not been made by the time the founders reached the notary. Before starting any formality, the shareholders should agree in writing on the basic points of the project, because all of them will be reflected in the deed and in the articles of association.

• Shareholders and capital split: how many shares each takes and what they contribute, cash or assets.
• Management body: sole director, several joint or several directors, or a board, and whether the post will be paid.
• Corporate purpose: the activities the company will carry out, with its main CNAE activity code.
• Registered office in Spain, which can be an office, commercial premises or even a home if the activity allows it.
• Whether to use standard articles, which are faster and cheaper, or bespoke articles to regulate, for example, the transfer of shares or enhanced majorities.

Step 1: company name availability certificate

The company name cannot match that of an existing company. You apply to the Central Companies Register for a negative name certificate, listing up to five names in order of preference; it costs about €16 and is usually issued within one or two working days if requested online. The name is reserved for six months, but the certificate can only be used to sign the deed for three months from issue, so it is not wise to request it too far in advance.

If you use the CIRCE online system with standard articles, you can also choose a name from the bank of reserved names, which offers names that have already been checked and are available. This is a useful option if speed matters more than the specific name.

Step 2: share capital and bank account

Since Law 18/2022 on business creation and growth, an SL can be formed with €1 of capital. Until the capital reaches €3,000, the company must allocate at least 20% of its profit to the legal reserve and, if it is liquidated with insufficient assets, the shareholders are jointly liable for the shortfall up to that amount. In practice, capital of €3,000 or more avoids those restrictions and gives banks and suppliers a greater sense of solvency.

Cash contributions are evidenced with a certificate from the bank where the amount has been deposited in the name of the company in formation; the deposit cannot be dated more than two months before the deed. In an SL it is also possible not to evidence them if the founders state in the deed that they are jointly liable for their reality. If you contribute assets, such as a vehicle or equipment, they must be described and valued in the deed, and the shareholders are jointly liable for that value.

Many banks now require the name certificate, the draft articles and the identification of the beneficial owners, that is, the people who control more than 25% of the company, before opening the account.

Step 3: articles of association and signing the deed before a notary

The deed of incorporation sets out the identity of the shareholders, their contributions, the shares each receives, the articles of association and the appointment of the directors. The articles must include, as a minimum, the name, corporate purpose, registered office, capital, shares, how management is organised and, if the director is to be paid, that the post is remunerated and how. This last point matters: without it, the director's pay may not be deductible for corporation tax.

With the standard articles approved by Royal Decree 421/2015 and capital not exceeding €3,100, fees are fixed at €60 for the notary and €40 for the registrar. With bespoke articles the cost is higher, usually a few hundred euros depending on the capital and length. At the signing, the notary identifies the beneficial owners and usually applies for the company's provisional tax ID (NIF). Since Law 11/2023 it is also possible to execute the deed by videoconference in certain cases, such as forming an SL with cash contributions. Incorporation is exempt from capital duty.

Step 4: tax ID and entry in the Companies Register

The provisional NIF allows the company to start trading, open its definitive account and file tax returns. The deed must be submitted for registration at the Companies Register for the registered office within two months of signing. If processed through CIRCE with standard articles, the registrar must register it within six working hours; without standard articles, the law provides for a quick provisional entry of the basic details and the definitive entry within a few days, although any defect that needs correcting extends the timescale.

On registration the company acquires legal personality and, once the registered deed is provided to the Tax Agency, it receives its definitive NIF. Until then, anyone who enters into contracts on behalf of the company in formation is jointly liable for those acts unless the company later assumes them, so it is best to limit major commitments until registration is complete.

The online route: CIRCE and Entrepreneur Service Points

CIRCE, the business creation information and network centre, lets you complete much of the process with a single form, the Single Electronic Document. From it, the details are sent to the notary, the Companies Register, the Tax Agency and Social Security, without having to file each step separately. It can be started online or at an Entrepreneur Service Point (PAE), where the processing service is free at publicly run points.

The online route with standard articles is the fastest and cheapest, but it is less flexible. If you need specific clauses, such as an exit arrangement for shareholders or restrictions on selling shares, you can combine bespoke articles with electronic processing or also sign a private shareholders' agreement.

After registration: tax registration and obligations

Registering the company is not the end. Before invoicing, the remaining registrations must be completed and, from then on, a calendar of tax and corporate obligations begins that you should know from day one.

• Tax census registration with form 036: start of activity, business activity tax heading (exempt from payment if turnover does not exceed €1 million), VAT regime and withholding obligations.
• Registration of the director with the self-employed scheme as a company director, if they control and run the company, before starting activity; and, if there are employees, registration of the company with Social Security and prior registration of each worker.
• Electronic certificate for the company's representative and mandatory electronic notifications from the Tax Agency, which are checked in the single enabled electronic address (DEHú).
• Municipal licence or responsible declaration if you open premises, and notification of the opening of the workplace if there are workers.
• Periodic returns: quarterly VAT (form 303) and annual summary (390), withholdings (111 and 190, plus 115 and 180 if you rent premises), corporation tax in July (form 200) and instalment payments (form 202) where applicable.
• Accounts under the Spanish General Accounting Plan, minutes book, register of shareholders and, in a single-member SL, a register of contracts with the sole shareholder; online legalisation of the books within four months of year end.
• Annual accounts: prepared within three months of year end, approved by the general meeting within six months and filed at the Companies Register in the following month.
• Invoicing: from 1 January 2027, corporation tax payers will have to use invoicing systems that comply with the Verifactu regulation.

Approximate costs and timings

The following amounts are a guide for a simple SL with individual shareholders; they may vary with the capital, the complexity of the articles and professional fees. The timings assume the paperwork is complete and there are no defects to correct.

• Negative name certificate: about €16; one or two working days.
• Notary and registry with standard articles and capital of up to €3,100: €60 and €40; with bespoke articles, usually between €300 and €600 combined.
• Publication in the Official Gazette of the Companies Register: exempt with standard articles through the online route.
• Advisory fees to prepare the documents and registrations: usually between €150 and €500.
• Total time: two to five working days via CIRCE with standard articles; one to three weeks through the ordinary route.