The guides

Setting up a Spanish limited company as a foreigner

Five steps to be born, then annual accounts for life.

The sociedad de responsabilidad limitada is the commonest company form in Spain, and the one foreign owners ask most about. Setting one up is an orderly procedure; keeping it is a commitment every year. This guide explains both, and the question almost everyone ends up asking about their house.

Contact

We work in English, Spanish, Dutch, German and French.

Message us on WhatsApp Send an email Free 15-min call

What an S.L. is, in two sentences

A limited company is a legal person separate from its partners, with its own tax number, its own accounts and its own returns. The Capital Companies Act states that partners are not personally liable for the company's debts: they risk what they put in, not their own assets.

Its capital is divided into participations, which are not listed and whose transfer is restricted. A single partner can set one up (the single-member company), and that partner can be a foreigner, resident or not, provided they hold a Spanish identification number.

Minimum capital: one euro, with conditions

Ley 18/2022 on the creation and growth of companies, known as "Crea y Crece", amended article 4 of the Capital Companies Act: the capital of a limited company may not be less than one euro.

The reduction comes with two conditions while capital stays below 3,000 euros. The company must allocate at least 20% of its profit to the legal reserve until reserve and capital together reach that figure. And if the company is wound up and its assets cannot pay its debts, the partners are jointly liable for the difference between 3,000 euros and the subscribed capital. A token capital is legal; it is not free.

The steps to set it up

First, the name. You ask the Registro Mercantil Central for a negative name certificate, which proves that nobody else uses the name you chose. You may propose up to five in order of preference; the name granted is reserved for six months, and the certificate is valid for three months to sign the deed.

Next, the bank: an account is opened in the name of the company in formation, the capital is paid in, and the bank issues a deposit certificate. With that certificate, the articles of association and the identification of the partners and the director, the deed of incorporation is signed before a notary. The company obtains its tax number from the Agencia Tributaria, the tax formalities of the incorporation are completed, and the deed is registered at the Companies Registry of the province where the registered office is. Only on registration is the legal person fully born.

The online route: CIRCE and the PAE offices

There is an electronic route, the CIRCE system, run by the Directorate General for Industry and Small and Medium Enterprises. A single form, the Documento Único Electrónico (DUE), is filled in by you or through an entrepreneur support point (PAE), and the system passes the data to the administrations involved.

For a foreigner there is a precondition: identifying yourself online, with a digital certificate or with the help of a PAE. Signing before a notary is still required. For a simple company it saves trips and time; when the articles are bespoke or foreign partners act through powers of attorney, the traditional route remains common.

What the company must do every year

The company keeps accounts under the Commercial Code, with its official books. The directors draw up the annual accounts within three months of the year end; the general meeting approves them within six months of the year end; and they are filed at the Companies Registry within the month after approval, under articles 253, 164 and 279 of the Capital Companies Act.

On the tax side, the company files corporate income tax on the modelo 200 within the 25 calendar days following the six months after the end of the tax period; if the financial year matches the calendar year, that falls in July. If it invoices with VAT, it also files periodic VAT returns, and if it pays salaries or rent, withholding returns. All of this exists even if the company has not one customer that year.

Should I hold my holiday home through a company?

It is the question we hear most, and it has no general answer. What we can do is set out the points to put on your adviser's desk. Today, as a non-resident individual, your house is declared every year on the modelo 210, whether let or not. Inside a Spanish company, the house goes onto the company's books and is taxed under corporate income tax, with accounts, books and a filing every year.

The questions for your adviser: what it costs to move a house you already own into a company, because that transfer carries its own taxes; how it is treated when you, a partner, use the company's house for your holidays; what happens on a sale, depending on whether the house or the participations are sold; what happens on an inheritance; and how your country of residence views a Spanish company held by one of its residents. The answer changes with letting or not, with your country and with your family, which is why we do not give it here.

What this guide cannot tell you

Whether a company or self-employment suits you better. How much your company would pay, or how much you would save, because that depends on figures we have not seen. Whether moving your home into a company makes sense in your case, because it depends on your country of residence, your heirs and what you do with the house.

What we do: HolaOwners gathers your papers, translates them and follows each step with you, from the name to the registration, and our partner tax adviser handles the company's registrations, returns and bookkeeping.

Frequently asked questions

Can a non-resident be the sole partner of a Spanish S.L.?

Yes. A limited company can have a single partner, and that partner can be a non-resident foreigner, provided they hold a Spanish identification number.

Is one euro of capital really enough?

Yes, since Ley 18/2022. But while capital is below 3,000 euros there is a reinforced legal reserve and, on liquidation, the partners are jointly liable for the difference.

If the company has no activity, do I still have to file?

Yes. A dormant company still draws up, approves and files its accounts and files the modelo 200. Failing to do so has consequences at the Registry and with the tax agency.

Can I set up the company without travelling to Spain?

Largely, with a power of attorney or with electronic identification. Signing the deed requires appearing before a notary, in person or through a representative.