• What steps do I need to take to set up a company in Spain?
• What is the NIE?
• When can I apply for one?
• Where can I apply for one?
• What is required to set up a valid power of attorney in Spain?
• What types of trading companies are most common in Spain?
• What documents are necessary to constitute a company in Spain?
• How much does it cost...?
• How long does it take to...?
• Which is better...?

What steps do I need to take to set up a company in Spain?

The 11 steps to set up a company in Spain are summarized below:

What is the NIE?

Foreigners who for financial, professional or business reasons have some connection to Spain will be given a personal, unique and individual number for identification purposes. These are issued in sequential order. This personal number is the alien identification number (NIE in its Spanish acronym), which must appear on all documents issued or submitted, as well as the official stamps on their identity card or passport.

The NIE is essential in order to carry out any sort of financial transaction within Spain (for example, opening a bank account, setting up a business or completing any government form from a Foreign Nationals’ Office).

When can I apply for one?

The NIE can be applied for before or upon arrival in Spain. However, it is advisable to begin application proceedings before initiating any formalities in connection with constituting a company, branch office or representative office.

Where can I apply for one?

Requesting a N.I.E from Spain: Visit a Foreign Nationals’ Office in person or in the absence of a Foreign Nationals’ office, visit the local police station for the place of residence.

Requesting a N.I.E from outside Spain: Visit the Spanish diplomatic delegation or consular office corresponding to the place of residence in person.

What is required to set up a valid power of attorney in Spain?

1. It must be bestowed by the representatives of the company to be constituted.
2. The power of attorney must be formalized before a notary. A certified translation is required if the power of attorney is not issued in Spanish.
3. Legalization by means of an Apostille of the Hague Convention of 1961.

What types of trading companies are most common in Spain?

The most common types of companies in Spain are a public corporation (Sociedad Anónima - S.A.) or a limited corporation (Sociedad Limitada - S.L.). According to statistics from the Central Companies Registry, 98% of Spanish companies are limited corporations, while the remaining 2% are public corporations. Other types of companies are not practical to set up.

What documents are necessary to constitute a company in Spain?

The documents which must be obtained in order to constitute a company in Spain are the following:
1. Power of attorney (empowering the person responsible for constituting the company in Spain to carry out all formalities).
2. NIE (Alien Identification Number) in those cases in which the representative is not a resident.
3. Company name clearance certificate.
4. Banker’s certificate indicating that a financial investment has been made.
5. NIF (Tax Identification Number): tax identification system used in Spain for individuals and legal entities.

How much does it cost...?

...to set up a company?

The cost of constituting a company will depend on the type of company chosen and the number of pages contained in the articles of incorporation.

Generally speaking, the average cost of constituting a limited corporation in Spain is approximately 870 euros (assuming capital of 3000 euros), while the cost of constituting a public corporation is approximately 1,740 euros (assuming share capital of 60,000 euros).

TYPE OF COMPANY	Share capital	Taxes	Notary´s fees	Registration fees	Agent´s fees (NIE formalities)	Total
S.L.	€3.006	€30,06	€250	€290	€300	€3.870,06
S.A.	€60.101,21	€601,01	€450	€290	€300	€61.741

The amounts shown here are approximate. The final amount will depend primarily on the activity to be carried out by the company and the number of pages contained in the articles of incorporation.

...purchase an already established company?

The approximate cost for an already established limited corporation is around 1,300 euros. This figure is in addition to the amount of capital to be invested in the company.

The approximate cost for an already established public corporation is around 1,800 euros. This figure is in addition to the amount of capital to be invested in the company.

...set up a branch office?

Branch offices, unlike companies, do not have share capital. As a result, they do not require a minimum investment in terms of capital. Administrative, notary’s and registration fees total approximately 870 euros. This figure is in addition to the capital invested in the branch office.

Branch office	Financial investment	Tax	Notary´s fees	Registration fees	Agent´s fees (NIE formalities)	Total
Branch office	No minimum amount required	€30	€250	€290	€300 (approximate average cost)	€870

The amounts indicated here are approximate. The final amount will depend primarily on the activity to be carried out by the company and the number of pages contained in the articles of incorporation. The tax is calculated for an investment of €3,000 as an example.

...set up a representative office?

Representative offices do not require the allocation of funds. Administrative, notary’s and registration fees total approximately 300 euros.

Representation office	Share capital	Tax	Notary´s fees	Registration fees	Agent´s fees (NIE formalities)	Total
Representation office	No allocation of funds required	If the Documented Legal Acts (AJD) method is used, o.5% of the amount contributed	€0	No registration needed	€300 (approximate average cost)	€300

How long does it take to...?

...constitute a company?

The amount of time needed to set up a company in Spain ranges from one to two months.

...purchase an already established company?

One day.

...set up a branch office?

The amount of time required to set up a branch office in Spain ranges from one to two months.

...set up a representative office?

The amount of time required to set up a representative office in Spain (once the alien identification numbers of the persons who will be representing the company have been obtained) is one day.

Which is better...?

...a public corporation (S.A.) or a limited corporation (S.L.)?

In general terms, a limited corporation is used:
1- If the plan is to fund the constitution of the company with less than €60,102 in capital.
2- If the company is not going to have a large number of partners.
3- If the desire is to reduce the company’s operating costs.

A public corporation is usually set up:
1- If it will be carrying out an activity reserved by law for public corporations (banking institutions, pharmaceutical companies, pension fund managers, leasing, and insurance, among others).
2- If significant movement of capital is anticipated.
3- If the partner who is not going to be involved in managing the company wishes there to be especially strict formalities for carrying out the company’s actions, which may have a significant impact on the investment (for example: mergers, conversion, dissolution, calling a general shareholders’ meeting, reducing the amount of capital, non-cash contributions, etc.)

In any case, it is recommendable to consult an advisor prior to making a decision.

...branch office or subsidiary?

A branch office is not a separate legal entity. It is dependent on the head office and does not require a minimum allocation. This option may be of interest if the head office wishes to have greater control over the branch’s activity. A subsidiary, because it is an independent legal entity, generally has greater flexibility of action and shares the risk with its head office.