How to Create a Company in Spain: Complete Guide 2026
Step-by-step guide to creating a company in Spain in 2026. Learn about legal structures, costs, tax obligations, and requirements for foreigners.
Key Facts at a Glance
| Aspect | Details |
|---|---|
| Most common structure | Sociedad Limitada (SL) - Limited Liability Company |
| Minimum share capital (SL) | 1 EUR (legal minimum); 3,000 EUR (recommended standard) |
| Minimum share capital (SA) | 60,000 EUR |
| Approximate setup costs (SL) | 900 - 1,100 EUR (notary, registry, certificates) |
| Estimated timeline | 2-4 weeks (registry step takes up to 15 business days) |
| Corporate tax rate | 25% general; 15% for new companies (first 2 profitable years) |
| Standard VAT rate | 21% |
What You Need Before You Start (Key Decisions)
Before reserving a name or visiting the notary, you must make strategic decisions that determine future bureaucracy and tax implications:
- **Legal structure** - Determines liability and taxes
- **Business activity definition (IAE code)** - Your official classification with the Tax Agency
- **Capital contribution** - How much money you will put in
Legal Structure Options
1. Sole Proprietor (Autonomo)
| Aspect | Details |
|---|---|
| Best for | Independent professionals, quick start |
| Liability | Unlimited - personal assets at risk |
| Initial costs | Minimal (beyond monthly Social Security fee) |
| Control | Total |
| Risk level | Highest if business grows |
2. Limited Liability Company (Sociedad Limitada - SL)
| Aspect | Details |
|---|---|
| Best for | SMEs, partnerships, asset protection |
| Liability | Limited to capital contributed |
| Minimum capital | 1 EUR (legal); 3,000 EUR (recommended) |
| Note | If contributing less than 3,000 EUR, partners are personally liable up to that amount |
| Management | Flexible |
3. Corporation (Sociedad Anonima - SA)
| Aspect | Details |
|---|---|
| Best for | Large companies, stock market listing |
| Minimum capital | 60,000 EUR |
| Features | Can issue shares on stock market, attracts major investors |
| Management | Rigid and costly |
| Recommendation | Not suitable for standard business startups |
Choosing the Company Name
You must differentiate between:
- **Legal name (denominacion social):** The legal/tax name of your company, which must be unique
- **Trade name (nombre comercial):** The brand your customers know you by
Before proceeding, verify:
- Legal name availability at the Central Mercantile Registry
- No trademark infringement at the Spanish Patent and Trademark Office (OEPM)
Step-by-Step: The 8 Steps to Create Your SL
Step 1: Register the Company Name
Request a "Certificate of Name Availability" (Certificado Negativo de Denominacion Social) from the Central Mercantile Registry.
| Detail | Info |
|---|---|
| Method | Online (requires digital certificate) or in person |
| Tip | Propose 5 different names for 99% first-try approval |
| Processing time | Approximately 48 hours |
| Validity | 3 months to sign before the notary |
Step 2: Open the Bank Account and Deposit Share Capital
With the approved name certificate, open an account in the name of the company "in formation" and deposit the share capital.
- The 3,000 EUR is not an expense - it is the first contribution to your company
- The bank issues a certificate of contribution (required for the notary)
Step 3: Draft the Bylaws (Estatutos Sociales)
The bylaws define:
- Business purpose (what the company does)
- Registered office
- Decision-making procedures
- Distribution of profits
**Important tip:** Do not restrict the business purpose too narrowly. Include all potential activities now - adding them at incorporation is free, but modifying bylaws later requires paying the notary and registry again.
Step 4: Sign the Public Deed of Incorporation Before a Notary
The founding partners sign the public deed of incorporation with:
- Name certificate
- Bank certificate
- Drafted bylaws
This document gives legal life to your company.
Step 5: Apply for the Provisional Tax ID (NIF)
Submit Form 036 (census registration) to the Tax Agency (Hacienda) to request the company's provisional NIF.
This allows you to:
- Begin operating
- Open the definitive bank account
- Issue invoices (with certain limitations)
Step 6: Register in the Mercantile Registry
The deed must be registered in your province's Mercantile Registry (typically handled electronically by the notary's office).
| Detail | Info |
|---|---|
| Processing time | Up to 15 business days |
| Result | Company officially exists for all legal purposes |
Step 7: Final Registration with Tax Agency and Social Security
- Return to the Tax Agency to communicate the definitive start of activity (Form 036)
- Administrator(s) must register with Social Security (RETA - corporate partner status)
Step 8: Obtain the Definitive Tax ID (NIF)
Once the Mercantile Registry registration is communicated to the Tax Agency, the provisional NIF automatically converts to the definitive NIF. Your company is now 100% operational.
Real Costs of Starting a Business
Sole Proprietor
Minimal setup costs beyond the monthly Social Security contribution.
Limited Liability Company (SL)
| Cost Item | Amount |
|---|---|
| Share capital (recommended) | 3,000 EUR (company's money, not an expense) |
| Administrative costs (notary, registry, certificates) | 900 - 1,100 EUR |
| Licenses and duties (varies by activity) | Variable |
Note: Costs may be higher in large cities.
Legal Requirements After Registration
Tax and Accounting Obligations
| Tax | Details |
|---|---|
| Corporate Tax (Impuesto de Sociedades) | Taxes net profits. General rate: 25%. New companies: 15% (first 2 profitable years) |
| VAT (IVA) | Collected from customers (generally 21%), settled quarterly with Tax Agency, minus VAT paid to suppliers |
Social Security Contributions
- Administrators (as corporate partners) and employees must be registered
- Monthly social security contributions finance the public pension and health system
- Significant fixed cost to include in financial planning
Licenses and Sector-Specific Regulations
| Requirement | When Needed |
|---|---|
| Business license (licencia de apertura) | Physical locations with classified activities (hospitality, industry) |
| Responsible declaration (declaracion responsable) | Physical locations with harmless activities |
| Occupational Hazard Prevention (PRL) | All businesses with employees |
| GDPR compliance | All businesses, especially critical for online operations |
The choice between responsible declaration vs. license depends on the hazard/nuisance level of the activity and size of premises.
Starting a Business in Spain as a Foreigner
First Step: Obtain NIE
The Foreigner's Identification Number (NIE) is your tax identification number in Spain. Required for:
- Opening a bank account
- Signing at the notary
- All official procedures
Visa and Residency Options
| Visa Type | Requirements | Best For |
|---|---|---|
| Entrepreneur Visa | Innovative project of special economic interest, solid business plan, favorable ENISA evaluation | Tech startups, innovative projects |
| Investor Visa (Golden Visa) | Significant investment (2M EUR public debt, 1M EUR shares, or 500K EUR real estate) | High net worth individuals |
| Self-Employment Work Visa | Demonstrated business viability, sufficient funds | Traditional businesses (shops, consultancies) |
For more details on the entrepreneur visa, see [Entrepreneur Visa Spain Guide](/blog/entrepreneur-visa-spain-guide).
Double Taxation Treaties
Spain has double taxation agreements with many countries. These treaties prevent paying taxes twice (in your home country and in Spain) on the same income. Ensure your tax advisor is familiar with the relevant treaty.
Available Funding and Aid
- Specific micro-loan lines for new businesses (often with favorable conditions)
- Public financing lines (such as ENISA) for innovative projects
- Grants for entrepreneurs depending on sector and profile
For more on ENISA funding, see [ENISA Guide](/blog/enisa-guide-fund-startup-without-guarantees).
Common Mistakes That Delay or Increase Costs
| Mistake | Consequence |
|---|---|
| Choosing the wrong legal structure | Taking on more risk than necessary |
| Too narrow business purpose in bylaws | Future modifications require paying notary and registry again |
| Incorrect IAE code | Problems with the Tax Agency |
| Undefined administration structure in partnerships | Future conflicts (joint and several vs. joint) |
| No shareholders' agreement | Expensive disputes when disagreements arise |
Legal notice: This article is for informational purposes only and may contain errors or be outdated. It does not constitute legal advice. For an updated consultation, contact a qualified attorney.
Frequently Asked Questions
Yes. That money is a contribution, not a payment. Once the company has its definitive NIF and the bank account is operational, the 3,000 EUR is the company's asset to pay first expenses: rent, advisory fees, materials, or marketing. It is not locked money.
This is very common. When your business grows (generally over 60,000 EUR/year in revenue), or you want to protect personal assets, you can create a new SL and start invoicing from it while de-registering the sole proprietorship. The formal process is called a "contribution of a business branch."
Generally no. If your activity is professional (designer, programmer, consultant), carried out in your primary residence without attending the public and without employees, you usually do not need a municipal business license. You only declare it on Form 036, indicating that a portion of your home is used for the activity.
Not mandatory, but highly recommended. A shareholders' agreement regulates what happens if a partner wants to leave, passes away, how their stake is valued, or how decision-making deadlocks are resolved. Signing it at the beginning, when everyone agrees, saves thousands of euros and problems in the future.
Key Takeaways
- The **SL (Sociedad Limitada)** is the most popular structure for SMEs in Spain - limited liability with flexible management
- Legal minimum capital is 1 EUR, but **3,000 EUR is recommended** to avoid personal liability exposure
- The process involves **8 sequential steps** from name registration to definitive NIF
- Total administrative costs typically range from **900 to 1,100 EUR** (excluding capital)
- Timeline: approximately **2-4 weeks**, with the registry step being the longest
- **Foreigners** must first obtain an NIE and appropriate visa
- Post-registration obligations include corporate tax (25%), VAT (21%), and Social Security
- Avoid common pitfalls: narrow business purpose, missing shareholders' agreements, wrong IAE code
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