1. Considering the best option
First of all, you must know that there are several ways to carry out an activity in Spain:
1. As a self-employer: the activity is directly developed by the entrepreneur who will be fully liable with respect to every obligation. In this sense, it could be advisable to do it under the form of the “limited liability entrepeneur”.
2. Opening a Branch. The activity is carried out directly by a Foreigner Company but with Permanent Establishment in Spain.
3. In the case you just want to perform supporting or secondary activities you may opt for registering a Representative Office.
4. Creating a Company (or a Subsidiary of a Parent Company). The most common types of companies in Spain are Limited Liability entities: the “Sociedad Anónima (SA)” and the “Sociedad de Responsabilidad Limitada”
5. Finally, you can also consider enter in the Spanish market investing directly in an existing Spanish company, thought distributing or Joint ventures agreements.
We remain at your disposal to help you with this decision.
2. Applying for a Non-Resident Identification Number (NIE)
Regardless which option you choose, all the foreigners involved as shareholders and/or Directors of the company must have a Spanish NIE number (Spanish identification number for foreigners). This formality is not complex but it may take some time.
3. Request of the Company’s name.
It has to be applied (personally, by e-mail or by Internet) before the Central Commercial Registry of Madrid. Once granted the Registry will issue a Certificate.
4. Bank Certification
The Company’s capital in cash must be deposited in a Spanish bank account opened in the name of the new Company being formed. The Bank, on its side, has to issue a document certifying the mentioned deposit.
The capital can also be invested in-kind. In this case, the shareholders will be responsible of the value veracity (unless SA: expert report).
5. Drafting the Company’s bylaws
The Bylaws of the Company has to include the minimum content required by the Spanish Corporation Law, but it is very advisable to adapt the text to the specifics needs of the investors.
The shareholders of the Company must appear before a Spanish notary (in person or by proxy) to execute the deed of the Incorporation providing the following documentation:
- Original Identification documents (evidence of the shareholder’s identity: NIF or Non-Resident Identification Number and Passport). When a Company is shareholder of a NewCo it must be also identified.
- Original Power of Attorney granted by the shareholders or Directors totheir representatives if applicable.
- Negative Name Certification
- Bank Certification
- When a Company is shareholder of the NewCo, the Law requires a “Real Owner” declaration according with Law 10/2010, of April 28.
- The Company’s Bylaws
- Appointment of the Company’s management body and their acceptance.
Once signed the deed, the Company will obtain a provisional CIF number from the tax authorities.
7. Payment of the Transfer Tax
Even when this tax is usually exempted, a Tax Form (mod 600) has to be completed and submitted to the Regional Tax Authority.
8. Mercantile Register
The deed of incorporation must be submitted to the provincial Commercial Register in order the Company be recorded.
9. Declaration of the Foreign Investment
This document is just for informative purposes, but has to be submitted to the Ministry od Economic Affairs within one month from the Incorporation (unless investments from Tax Havens).
Once the Company has been set up, other formalities may be required. Among others:
- To obtain the definitive CIF number
- To register the company for tax purposes
- To obtain the opening license from the City Council.
- To register the Company for Social Security purposes and affiliate the employees.