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Steps to set up a company in Spain

In this post we explain how to register a Spanish company, describing all the steps and documents needed to set up a company in Spain. The formation of a Spanish company requires the following actions:

Request of the intended name

Request of the “Certificación Negativa del Nombre” – a Certificate issued by the Central Mercantile Registry located in Madrid stating that the company name is not already taken. The application for the name can be done on-line, but the reception of the physical paper takes a few days, so it is always a good idea to request the name “asap”. The investor can short list up to five projected names, just in case the preferred one is not available.

Application for the company Tax Identification Number (“NIF”).

If the shareholders and / or the Directors of the company are foreigners, then a NIF for them must also be obtained. To get a NIF for the foreign investor, he needs to provide the tax office with a proof of existence and good standing. An affidavit of the Companies House, Chamber of Commerce or a Notary is needed. This documents must be translated into Spanish, legalized by a Notary and Apostilled with the Hague Apostille. Obviously, if the investor is an individual, this is not necessary. In case of individuals (either shareholders or Directors) the procedure to get the NIF is slightly different. Their NIF is given by the Police, rather than by the Tax Office. Actually, individuals do not apply for a NIF, but for a NIE (“Numero de Identificacion de Extranjeros”)  in the Police. Then their NIF is exactly the same number. To get a NIE, the individual must fill in an official form and go to the Police Station (if applying in Spain) or to the Spanish Consulate (if applying abroad) with a valid identification document. Then the NIE is given within a few days. However, the easiest way to get a NIF or a NIE is to use an agent to deal with all the paper work. For that purpose a Power of Attorney duly legalized and apostilled is needed. Note that these Powers should be granted either in a Spanish Consulate or before a local notary. We have PoA’s in a two columns format (Spanish / English), which is acceptable in many countries. However, in other countries the notaries are reluctant to legalize PoA’s in foreign languages, so in this case it may be advisable to grant the PoA in Spanish before the Spanish Consulate. It would be useful if you contact a local notary to seek advice in this respect.

Opening of a bank account.

in order to fund the company in formation. The bank must issue a certificate stating that the funds have been received for the capital of the company in formation. The funds deposited in this bank account can not be released until the company has come to legal existence when the incorporation process has been completed. Once you have the Certificate granting the name, you can already open the bank account for the company in formation. When the funds are sent to the bank account is important to make sure that in the wire transfer concept is clearly stated that the funds are for the share capital of the new company. It is also important that the funds are sent from an account pertaining to the shareholder of the new company (avoiding, for instance, transfers from other group companies…)

Writing of the official by laws of the company.

Stating the following information: company name, business purpose, registered office, share capital, directors, duration of the company and any other relevant information (restriction to the sale of shares…)

Signature of the Deed of Incorporation before a Spanish notary.

It is necessary to deliver to the notary the certificate granting the company name and the certificate from the bank giving evidence that the share capital has been paid up.

Filling in of forms for the Capital Tax.

However, as from January 2011, the incorporation of companies are exempt from this tax.

Registration of the company at the local Mercantile Register

The registration can take up to two weeks. Until then, the company would not be fully operative

Registration of the company before the Tax Authorities and in the National Social Security Scheme.

All of the above can be done by means of a PoA thus avoiding the foreign investor the nuisance of coming to Spain just to sign documents.

At Tax Parters we provide company formation services in Spain since 1996