Understanding how to start a company in Spain as a foreigner means looking beyond the simple act of signing a document before a notary. You need to choose the right business structure, obtain identification numbers, organise the investment, register the company and, of course, understand what happens afterwards.
And that last part matters. A Spanish company comes with tax returns, accounting records, annual accounts and, sometimes, immigration or Social Security obligations for its founders and directors.
The good news is that you do not need to be a Spanish citizen or tax resident to create or own a company in Spain. Foreign individuals and foreign legal entities may establish businesses in the country, although the documents and reporting requirements will depend on your nationality, residence, ownership structure and business activity.
Let us go through the process properly.
Can a non-resident open a company in Spain?
Yes. A foreigner can be the sole shareholder of a Spanish limited company, become a shareholder together with other investors or establish a Spanish subsidiary through an overseas company. Spanish law permits single-member limited companies, commonly identified as an S.L.U., as well as companies with several shareholders.
However, there is an important distinction that often causes confusion:
Owning or incorporating a Spanish company does not automatically give you permission to live or work in Spain.
Company law and immigration law are separate. You may own shares from abroad without relocating, but if you intend to move to Spain and personally manage or work in the business, you must check whether you need an EU registration certificate, a self-employment authorisation, an entrepreneur residence permit or another suitable immigration status.
Non-EU founders are subject to the immigration framework established by Organic Law 4/2000 and its current regulations. The mere creation of an ordinary Spanish limited company does not, by itself, grant a residence or work permit.
Autónomo, Sociedad Limitada or branch: which option should you choose?
Before reserving a company name or opening a bank account, we should decide what legal structure actually fits your project.
Operating as an autónomo
An autónomo is a self-employed individual carrying out an economic or professional activity in their own name. There is no separate company with its own legal personality.
This structure can be practical when you are starting a small activity, working independently and do not need external investors. Registration is normally faster and ongoing administration may be simpler.
The drawback is that, in general, your business liability is personal. Business profits are also normally taxed through personal income tax rather than Corporation Tax, and you may need to register and contribute under the Spanish self-employed Social Security regime.
Being an autónomo is not automatically cheaper than using an S.L. The answer depends on your expected income, expenses, Social Security position and how much money you intend to withdraw from the business.
Creating a Sociedad Limitada
A Sociedad Limitada, or S.L., is the most common option for foreign entrepreneurs establishing a separate Spanish business.
It has its own legal personality once properly incorporated and registered. Shareholder liability is generally limited to the amount contributed, although directors and shareholders may still incur personal responsibility in cases such as fraud, unlawful distributions, unpaid capital obligations or serious breaches of their duties.
An S.L. is usually more suitable when you want to:
- Separate personal and business assets.
- Work with partners or investors.
- Hire employees.
- Build a business that may later be sold.
- Present a more established structure to banks and suppliers.
Spanish law now permits an S.L. to be established with a minimum share capital of €1. Nevertheless, while capital and legal reserves remain below €3,000, special creditor-protection rules apply. At least 20% of annual profit must be allocated to the legal reserve until capital plus reserves reach €3,000, and shareholders may become responsible for the difference up to that amount if the company is liquidated without sufficient assets.
So yes, you can create a company with one euro. Should you? Usually, we recommend contributing enough capital to cover genuine start-up costs. A company with no working funds may be legal, but it does not look especially convincing to banks, landlords or suppliers.
Opening a Spanish branch
A foreign company may also operate through a Spanish branch.
A branch does not have a legal personality independent from its parent company. Its contracts, debts and liabilities are therefore connected directly to the overseas entity. It must be registered in the Commercial Registry, and documents proving the existence, articles and directors of the parent company generally need to be supplied in legalised and, where necessary, translated form.
A branch may make sense when an established international company wants a permanent presence in Spain. For an individual founder launching a new venture, an S.L. is normally more straightforward.
The documents foreign founders normally need
The exact file depends on whether the shareholders are individuals or companies, but we usually begin with:
- Valid passports or identity documents.
- Spanish NIE or NIF numbers.
- Proof of residential address.
- Proposed company name and activity.
- Ownership percentages.
- Details of the proposed director or directors.
- Evidence of the origin of the invested funds.
- Powers of attorney when someone will sign on your behalf.
- Corporate documents if a foreign company will be a shareholder.
Foreign documents may require an apostille or diplomatic legalisation, together with a sworn Spanish translation.
Banks, notaries and professionals must also identify the company’s ultimate beneficial owners. Spanish entities are required to obtain, maintain and update information about the individuals who ultimately own or control them.
This is why opening a company through several holding companies can take longer. Everyone involved will want to understand the complete ownership chain and the origin of the money. It can feel repetitive, and sometimes it is repetitive, but preparing the documents early saves alot of frustration later.
Step 1: Obtain the NIE or Spanish tax number
A foreign individual who will become a shareholder or director will normally need a Número de Identidad de Extranjero, commonly known as an NIE.
The NIE identifies you in dealings with Spanish public authorities and is commonly required for notarial, tax and corporate procedures. It can be requested on the basis of economic, professional or social interests in Spain.
Do not confuse the different identifiers:
NIE: identifies a foreign individual.
NIF: identifies a person or entity for Spanish tax purposes. For a foreign individual, the NIE generally forms part of their tax identification.
Company NIF: identifies the newly created Spanish company.
Social Security number: is used for employment and contribution purposes.
Obtaining the NIE is often one of the first bottlenecks, particularly when appointments are limited. A representative may be able to apply under a properly drafted power of attorney, depending on the circumstances.
Step 2: Choose and reserve the company name
The company name must be approved by the Central Commercial Registry through a negative name certificate confirming that the proposed denomination is available.
It is sensible to submit several alternatives in order of preference. The name must also include the legal form, such as “Sociedad Limitada” or “S.L.”
The certificate is issued in favour of one of the founding shareholders. According to the current PAE guidance, the founders normally have three months to execute the incorporation deed, unless the certificate is renewed, while the name reservation lasts six months from the original issue date.
Step 3: Decide the shareholders, director and registered office
Before signing anything, we need to define:
- Who owns the company.
- How many shares each person receives.
- Who manages and represents it.
- Whether the director’s position is paid or unpaid.
- Where the registered office will be.
- What activities appear in the corporate purpose.
The registered office must be located in Spain and should correspond to the place where the company is effectively administered or where its main establishment or activity is located. Using a purely artificial address while running the company elsewhere can create tax and corporate problems later.
An S.L. may have a sole director, joint directors, several directors acting separately or a board of directors.
Spanish company law does not establish a general rule requiring every director to reside in Spain. A foreign individual or legal entity may act as a director, provided the applicable identification and eligibility requirements are met.
That said, a non-resident director can create practical complications. Banks, tax authorities and other parties need someone who can receive communications, sign documents and manage the business effectively. Immigration and Social Security rules must also be checked if the director personally works in Spain or receives remuneration for management services.
Step 4: Open the bank account and contribute the capital
Where the capital contribution is monetary, the founders traditionally open a company-in-formation bank account and deposit the agreed amount. The bank then issues a certificate to be presented to the notary.
For foreign founders, the bank’s compliance review may take longer than the formal corporate procedure. The bank may ask for tax returns, employment records, company accounts, contracts, proof of savings and documentation showing the origin of the investment.
The current PAE process lists the bank certificate, valid shareholder identification, name certificate and electronic certificate among the principal preparatory documents for an S.L.
Capital may also be contributed in assets rather than cash, but the assets must be properly described and valued in the deed. This requires more careful drafting because the shareholders may be responsible for the reality and value of those contributions.
Step 5: Prepare the articles and sign before a notary
The incorporation deed and articles of association establish the company’s internal rules.
They normally cover the company name, registered office, corporate purpose, capital, share structure, financial year, management system and director remuneration.
Standard articles may be used for a relatively simple S.L. established through the CIRCE electronic system. Custom articles are preferable when there are several investors, different voting arrangements, transfer restrictions, investor protections or a more complex management structure.
All founding shareholders must sign before a Spanish notary, either personally or through a representative holding sufficient notarised powers.
CIRCE coordinates many incorporation procedures through the Documento Único Electrónico, including interaction with the Tax Agency, Social Security and Commercial Registry. You will still normally need to attend or be represented before the notary.
Step 6: Obtain the company NIF and complete tax registration
The new company needs a Spanish tax identification number.
A provisional NIF may be obtained during the incorporation process, and the definitive NIF is issued once the outstanding incorporation and registration documents have been supplied. The relevant census declaration is Form 036.
Form 036 is also used to notify the Tax Agency of matters such as:
- The start of economic activity.
- Applicable VAT obligations.
- Corporation Tax registration.
- Payroll withholding obligations.
- Business premises.
- Directors and representatives.
- Intracommunity transactions, where applicable.
The activity should not simply be registered under a vague description. The census position, corporate purpose and actual business model need to be consistent.
Step 7: Register the deed in the Commercial Registry
The incorporation deed must be filed with the Commercial Registry corresponding to the company’s registered office.
The registrar examines the legality of the deed and, once accepted, registers the company. Registration is compulsory and gives the S.L. its full corporate legal personality.
If the registrar identifies defects, the deed may need to be corrected. Common problems include unclear corporate purposes, incorrect director remuneration clauses, inconsistencies in shareholder information or foreign powers that have not been properly legalised.
Step 8: Obtain the company’s digital certificate
Once the company and its director are registered, the company should obtain an electronic certificate for dealings with the Spanish authorities.
This is not a minor administrative extra. Spanish companies receive many official notices electronically, including communications from the Tax Agency and Social Security. Missing an electronic notification does not usually make it disappear.
A representative certificate may be obtained for registered sole or joint-and-several directors through the FNMT system.
Taxes your Spanish company may have to pay
A Spanish S.L. is normally subject to Corporation Tax on its worldwide profits because it is incorporated under Spanish law.
For tax periods beginning in 2026, the general Corporation Tax rate remains 25%. However, qualifying microenterprises with turnover below €1 million may apply 19% to the first €50,000 of taxable profit and 21% to the remainder. Qualifying small and medium-sized entities under Article 101 of the Corporation Tax Law may apply a 23% rate in 2026.
Qualifying newly created companies carrying out a genuine economic activity may apply a 15% rate in their first profitable tax period and the following tax period. It is not an automatic rate for every newly registered company, particularly when an existing activity has merely been transferred into a new entity.
VAT will depend on the goods or services supplied, the customer’s location and whether exemptions or special rules apply. The standard Spanish VAT rate is currently 21%, although reduced, zero or exempt treatment may apply to specific transactions.
Payments to non-resident shareholders or directors may also generate withholding obligations. Dividends, interest, royalties and director remuneration must be reviewed under Spanish domestic law and the relevant double taxation treaty.
Accounting, annual accounts and employment obligations
An S.L. must maintain proper accounting records in accordance with Spanish accounting rules. Bookkeeping should begin from day one, not when the first annual tax return is approaching.
Directors must normally prepare the annual accounts within three months of the financial year-end. The shareholders approve them, generally within six months, and the accounts must then be filed with the Commercial Registry within one month of approval.
If the company employs staff, it must also deal with employment contracts, payroll withholding, Social Security registration, collective bargaining rules and occupational risk prevention.
A shareholder-director who works in the company may need to join either the general Social Security regime or the self-employed regime, depending on ownership, control, family relationships and management functions.
Must the company have a resident director or fiscal representative?
A Spanish S.L. does not normally need a Spanish-resident director simply because its shareholders are foreigners.
Nevertheless, the director must be properly identified and able to perform the role. Where the director works in Spain, receives remuneration or is subject to Spanish Social Security, residence and work-authorisation questions may arise.
Similarly, a Spanish company does not automatically require a separate fiscal representative merely because its owners live abroad. A fiscal representative may be necessary in specific non-resident, VAT, branch or administrative circumstances, so this point must be checked rather than assumed.
A foreign branch is different. Because it forms part of a non-resident parent company, representative and non-resident tax rules play a more prominent role.
Foreign investment reporting
Foreign investment in Spain is generally liberalised, but this does not mean there are no reporting or control obligations.
Under the current foreign-investment declaration regime, an investment by a non-resident that reaches or exceeds 10% of the share capital or voting rights of a Spanish company generally falls within the declarable operations. This includes the incorporation of a company and the subscription or acquisition of shares.
Most ordinary investments do not require prior authorisation. However, investments involving strategic sectors, public security, defence, critical infrastructure or investors from certain jurisdictions may be subject to additional review or prior approval.
How much does it cost to create an S.L.?
The cost depends heavily on the structure.
For a straightforward S.L. incorporated through CIRCE with standard articles and capital not exceeding €3,100, the official PAE guide indicates reduced notarial and registry tariffs of €60 and €40 respectively, plus VAT, excluding other concepts.
Where the capital exceeds €3,100, the indicated CIRCE tariffs are €150 for the notary and €100 for registration, plus VAT and excluding other costs.
You may also need to budget for:
- Company-name certification.
- Bank charges.
- Sworn translations.
- Apostilles or legalisation.
- Powers of attorney.
- Tax and legal advice.
- Accounting and payroll services.
- Licences or sector-specific permits.
A basic local incorporation can therefore cost only a few hundred euros, while a foreign-founder structure involving corporate shareholders, translated documents and representation may cost considerably more.
How long does the process take?
The company-registration stage itself may be quick once the documents are correct.
Published registry statistics for 2024 showed an average of approximately 5.6 days between electronic filing and registration, although the complete electronic incorporation journey averaged around 39 days when all preparatory stages were included.
For planning purposes, we would normally allow two to six weeks for a relatively straightforward foreign-founder S.L. The process may take longer when NIE appointments, bank compliance reviews, overseas documents or tailored articles are involved.
Common mistakes foreign entrepreneurs should avoid
One frequent mistake is assuming that incorporation and immigration are the same procedure. They are not.
Other avoidable problems include creating an S.L. without enough working capital, choosing an overly narrow corporate purpose, failing to regulate relationships between shareholders, overlooking foreign-investment reporting and paying personal expenses directly from the company account.
We also see founders who register the company but forget the digital certificate, bookkeeping or ongoing tax returns. A dormant company may still have filing obligations, even when it has issued no invoices.
Finally, do not choose between autónomo and S.L. solely on the basis of a headline tax rate. Salary, dividends, Social Security, deductible expenses and your personal tax residence all affect the final result.
Starting your Spanish business with fewer surprises
Learning how to start a company in Spain as a foreigner is not especially difficult once the process is properly organised. The challenge is coordinating corporate law, banking, taxation, immigration and foreign-investment rules without treating them as if they were one single procedure.
We normally recommend defining the ownership and management structure first, collecting foreign documents early and reviewing the tax position before the incorporation deed is signed. Fixing an unsuitable structure after registration is almost always slower and more expensive.
At Austen & Partners, we assist foreign entrepreneurs and investors with the preparation, incorporation and ongoing administration of businesses in Spain. We can coordinate the legal, tax and practical steps so that you begin with a structure that fits the actual project, not merely one that was quick to register.