A Sociedad Limitada (SL), or Spanish Limited Liability Company, is the most common legal structure for businesses in Spain. Favored by entrepreneurs and small to medium-sized enterprises, it offers a flexible setup, limited personal liability, and full accessibility to non-residents—making it an ideal choice for foreign founders looking to establish a presence in the Spanish or broader EU market.
STEP-BY-STEP PROCESS
At Lawhill, we simplify the entire process of setting up a SL for you. Here’s how we do it:
- Obtain a Foreigner Identification Number (NIE): All foreign shareholders and directors must obtain a NIE (Número de Identificación de Extranjero) — a tax ID required for any legal or financial activity in Spain.
- Name reservation: We assist in selecting and reserving a unique name for your company, ensuring compliance with Spanish naming regulations
- Opening a bank account: A company bank account must be opened to deposit the minimum share capital (€3,000). A certificate of deposit will be issued by the bank.
- Preparation of documents: Our legal experts prepare all the necessary documents, including the Articles of Association, shareholder agreements, and registration forms.
- Sign before the notary: All shareholders (or their legal representatives via power of attorney) must sign the Deed of Incorporation before a Spanish notary.
- Obtain the company Tax Identification Number (NIF): Once the deed is signed, a provisional NIF (company tax ID) is issued by the Spanish Tax Agency (AEAT), enabling initial business activity.
- Register with the commercial Registry: The deed is submitted to the Mercantile Registry, which formally registers the company. This may take 7–15 days.
- Obtain final NIF and register for taxes: Upon registration, we apply for the definitive NIF and register the company with the tax authorities for corporate tax and, if needed, VAT.
KEY REQUIREMENTS
In Spain, an SL must appoint at least one director to manage the company’s operations. The director can be either a resident or non-resident of Spain and may act individually or as part of a board of directors, depending on the chosen management structure.
Every SL must have a registered office in Spain. We can provide a registered address to meet this obligation.
WHY CHOOSE A LIMITED LIABILITY COMPANY (SL)?
A Limited Liability Company is the most preferred legal entity in Spain due to its numerous benefits, including:
- Limited personal liability: Shareholders are not personally liable for the company’s debts beyond their initial capital contribution.
- Flexible ownership: SL can be established by a single individual or multiple shareholders, making it suitable for both small and large businesses.
- Foreign-friendly – No residency requirement to own or manage the company.
- Credibility: A registered SL boosts trust and credibility with banks and clients.
- Ease of management: With clear regulations and straightforward compliance requirements, managing SL is both efficient and predictable.
ADDITIONAL SERVICES
At Lawhill, we provide comprehensive accounting and payroll services tailored to meet the needs of your business. From bookkeeping to tax filings, we ensure your financial records are compliant with Spanish regulations. Our team handles payroll management, ensuring timely and accurate payment for your employees.
Navigating the banking system in a foreign country can be challenging. We assist you in opening local and international bank accounts, guiding you through compliance requirements and documentation. Whether for operational needs or capital deposits, we streamline the process to secure your accounts efficiently.
Establish a professional presence in Spain with our virtual office services. We provide a legal address required for company registration and offer correspondence management to ensure you never miss important communication. This service is ideal for businesses operating remotely or without a physical office in Spain.
Certain industries in Spain require specific licenses to operate legally. At Lawhill, we help you obtain necessary licenses such as transport, pharmaceutical and temporary employment licenses. Our experts ensure the application process is smooth, saving you time and effort while adhering to all legal requirements.
We offer a full range of legal services tailored to businesses, including contract drafting, regulatory compliance, dispute resolution, mergers, and acquisitions. Our experienced legal team ensures that your business is fully protected and operates within the framework of Spanish and EU laws.
F.A.Q
The formation process typically takes 2–4 weeks, depending on documentation and availability of notary appointments.
Yes, absolutely. With a power of attorney, we can handle every step for you remotely.
- Corporate Income Tax:
Standard rate is 25%; startups and new companies may qualify for a reduced 15% rate in the first two years of profit. - Value Added Tax (VAT / IVA):
Standard rate is 21%, with reduced rates of 10% and 4% for certain goods and services. - Dividend Tax:
Dividends distributed to individuals are taxed at 19% to 28%, depending on the amount.
- Gateway to the EU and Global Markets: As a core member of the European Union and the Eurozone, Spain offers seamless access to over 450 million consumers and serves as a strategic bridge between Europe, Latin America, and North Africa.
- Supportive Environment for Foreign Investors: Spain actively encourages international entrepreneurship with investment-friendly policies, streamlined company formation processes, and no restrictions on foreign ownership.
- Attractive Business Sectors and Incentives: Key industries such as tourism, renewable energy, technology, real estate, and agri-food are supported by regional and national incentives, tax credits, and EU-funded programs.
- Modern Infrastructure and Connectivity: Spain boasts world-class transportation networks, advanced digital infrastructure, and globally ranked cities like Madrid and Barcelona, which are ideal for launching and scaling international businesses.
- Skilled, Multilingual Talent Pool: With a diverse and highly educated workforce, many professionals in Spain speak English and other major languages, making it easier for foreign entrepreneurs to operate and expand.
- High Quality of Life: Spain combines a vibrant culture, excellent healthcare, safety, and a favorable climate—making it one of the most attractive countries in Europe for business relocation and long-term living.