“Spain will be the next Germany!” This was the headline in “EL PAIS” last week, a popular Spanish newspaper.
Is this true? Well, even though the headline may be exaggerated in my opinion, there are grounds for optimism as recent labour reforms will benefit business development and the fall in salaries will increase both investment opportunities and businesses.
Times are tough, yes, but this is also a time of change and evolution. We have seen an increase of enquiries from UK companies wanting to do business in Spain or set up a Spanish Limited company. Sometimes this is due to tenders or “one of” jobs but in other occasions we have seen UK corporate clients willing to enter into the Spanish market in very niche areas where there is a lack of specialisation or specific products needed.
But how is it done? Is it difficult to create a Spanish SL (Limited Liability company)?
Creating a Spanish SL when the shareholders are individuals is not complicated. It is a matter of choosing a name and then incorporating the company at the Notary’s office in Spain. On the other hand, complications start to appear when the Spanish company will be owned by a UK company. Below you will see a list with the steps that need to be taken to incorporate a Spanish Limited company when the shareholder is a UK company.
– First of all, before creating a company we must decide its name and this involves applying for a Negative Certification of Name with the Spanish Companies house. This certification will indicate whether the name is available or not.
– Once you have the name secured, you will have to go to the tax office in Spain to apply for the UK company’s CIF number (Tax Identification Number). However, this tax number will not be given unless you provide the Tax office with certified and translated copies of the company’s corporate documents. This means supplying the certificate of incorporation, memorandum and articles of association duly legalised and translated.
– At the same time, you must open a Bank account in Spain, in which you will deposit the necessary capital for the company. The minimum capital is € 3,005.06 but nothing stops you from setting up a higher capital if this is convenient.
– The incorporation of the Spanish company needs to be signed by the Director at the Notary’s office in Spain. If the Director cannot attend the signature, a power of attorney can be sorted and given to someone to act on his behalf.
– Once the Deed of incorporation is signed, the stamp duty needs to be paid and the company will get registered with the Spanish Companies house.
– If the company is going to have employees, the final step is to register the company with the Social Security Schedule because if not, the company will be unable to enlist its employees with the Social Security.
All these procedures should be done in person. If the procedure seems complicated to you, then the best thing is to instruct a firm of lawyers like ourselves or any other similar firm with experience in this field to prepare the documentation in the UK and the incorporation in Spain. Your lawyers should also be able to put you in touch with the various Chambers of Commerce of the different regions in Spain which will inform you of the benefits for new incorporated companies as well as any potential business opportunities.