Spain

About the Country

The Kingdom of Spain is a sovereign state located on the Iberian Peninsula in southwestern Europe sharing border with Gibraltar; to the north and northeast by France, Andorra, and the Bay of Biscay; and to the west and northwest by Portugal and the Atlantic Ocean. The below content will explain you in detail about the requirements for the company formation in Spain, know more about the process of trademark registration in Spain and understand the Spain Legal Compliance requirements.

Spain

Doing Business Introduction

It is the world’s fifty-second largest country and Europe’s fourth largest country. Spain’s capitalist mixed economy is the 14th largest worldwide and the 5th largest in the European Union. Spain is one of the world’s leading countries in the development and production of renewable energy.

As per Doing business report of The World Bank –Spain ranks 32 for 2017 survey. YourGlobalPro professionals are able to assist its clients with any type of company formation in Spain, trademark registration in Spain and other recurring services for your business in Spain.

Incorporation - Types of Business Entities

The structure of the Spanish economy is that of a developed country. There are number of procedures that need to be followed and completed when setting up a business in Spain. It is recommended to appoint consultant to ensure full understanding of the taxes, charges and possible rebates that apply, and which of the many options are most suitable for a specific case.

There are several types of entities that can be incorporated in Spain are as mentioned below:

  • Sole Trader/Sole Proprietor (Empresario Individual or Autónomo)
  • Partnership (Sociedad Civil)
  • Limited Liability Company (Sociedad Limitada/SL or Sociedad de Responsabilidad Limitada/SRL)
  • Public Limited Company (Sociedad Anonima /SA)
  • New Enterprise Limited Company (Sociedad Limitada Nueva Empresa/SLNE)
  • Co-ownership (Comunidad de Bienes/CB)

Time Frame for Incorporation of Company in Spain varies from depending on the type of entity selected. Each business type has its own advantages and disadvantages. YourGlobalPro professionals estimate the time required for the process of Company formation to be completed is 14-18 working days.

Benefits of Registration of a Company

Below are the advantages of company formation in Spain:

  • Excellent quality of life and is very open to foreigners
  • Diversity of the country’s cultural heritage as a crossroads of civilizations
  • Well-equipped in terms of technological and industrial infrastructure
  • Rapid growth in international trade and foreign investments
  • Europe’s second most mountainous country after Switzerland and is a perfect location for any organisation wishing to develop business
  • Stable political situation and diplomatic relations guarantee development opportunities

Developing benefits for new businesses including low labour and transport costs.


 

Tax Registration and Filing

In Spain, Corporate tax is imposed on the income of companies and other entities and organizations that have a separate legal status. Resident entities are taxable on their worldwide income.

Corporate Income Tax Rate 25%
Capital Gains Tax Rate 25%
Branch Tax Rate 25%
Dividends 19%
Interest 19%
Royalties 24%
Branch Remittance Tax 19%
VAT 21%
Tax Year Same as the Accounting Period
Non-Resident Entities Taxable only on Spanish-source income
Tax Return Filing Within 25 days after six months following the end of the tax year.
Payments on account of Corporate Income Tax. In April, October and December

Double Tax Treaty

Double Tax Agreements regulates the tax treatment of income or capital gains in situations where the same taxpayer is taxed twice in two countries for the same subject. Spain has double taxation treaties with over 85 countries.

Trademark registration

For trademark registration in Spain, an application needs to be made to the Spanish Patent and Trademark Office (OEPM). It takes approximately 8-10 months’ timeframe to complete the process of trademark registration in Spain. A Trademark Registration in Spain is valid ten years from the date of application and is renewable indefinitely for further period for ten years by paying the renewal fee by the expiration date for an unlimited number of times. Also, trademark may be renewed after the renewal due date, within six months from expiry date.

YourGlobalPro professionals are fully equipped to assist you with the process of trademark registration in Spain for your business in Spain. For assistance or advise in the matter of the trade mark registration or intellectual property – please feel free to write or contact us.

Secretarial Compliance

Below are some of the important points in relation to Company Secretarial Compliance in Spain:

  • Companies are required to file their financial statements within a month after their approval in the General Meeting. The approval must not be later than 6 months after the balance sheet date.
  • Listed companies are required to file their financial statements with the Spanish Securities Market Commission within 2 months after the balance sheet date, regardless of the requirement to file in the Mercantile Register
  • Auditors are selected by the partners or shareholders in General Meeting.
  • The board of trustees must appoint the auditor before the end of the year to be audited and for a certain period of time which shall not be less than 3 years or more than 9.
  • The shareholders’ Meetings take place, they will be held in the city where the company has its registered office.
  • Listed companies must have a board of directors. Only European Limited Companies in Spain may opt for a two-tier board.
  • The management body must be appointed by the Shareholders’ Meeting.

Accounting Services

The companies are obligated to prepare their financial statements in accordance with accounting principles promulgated by the Code of Commerce, the Spanish General Accounting Plan, and other applicable regulations (Spanish GAAP). While listed, companies are required to prepare their consolidated financial statements in accordance with International Reporting Standards (IFRS).

YourGlobalPro professionals can assist you with the entire bookkeeping and accounting services for your Spain Business Setup as per your business needs including implementation of financial accounting software, accounting records preparation and time to time preparation of budgets, forecasts.

Auditing service

In Spain, all companies are required to prepare annual financial statements and file these with the Mercantile Register. The financial statements are comprised of various documents, which are a balance sheet, an income statement, a statement of changes in equity, a statement of cash flows, and explanatory notes. Regardless of the size of the company a company may be required to be audited, if it is contained in its charter for the Company.

Based on the size of the business – the companies are required to prepare and file financial statements with the Authority. YourGlobalPro professionals provide you auditing services as required by your business.

Banking

The accounts can be opened and maintained in multi-currency and is available for all major currencies. The documentation requirement differs from Bank to Bank and need to be complied for the Bank account opening. The major banks in Spain are Banco Santander, BBVA (Banco Bilbao Vizcaya Argentaria), Banesto S.A, Caixabank, Bankia S.A, Banco popular espanol, Deutsche bank Spain, Barclays Spain, Banco Pastor, S.A, CaixaCatalunya. All banks are stable, reliable and offer the same level of services.

YourGlobalPro professionals can facilitate all the paper work in relation to banking need and can assist you in opening bank account for your business plan in Spain.

Legal and Compliance

In Spain, the responsibility of legal compliance is not a one-time affair, but a continuous process. Below is the various Spain legal and compliance requirement to be followed by incorporated entities:

  • Foreign investments are only subject to reporting requirements once the investment has been made to the Directorate-General for Trade and Investments
  • Exchange controls are administered by the Bank of Spain and the Ministry of Economy and Finance -Due to liberalization a few, simple reporting requirements are now imposed, primarily for statistical purposes.
  • For transfer pricing, related matter – Spanish law includes the arm’s-length principle and the requirement of documenting all related-party transactions.
  • New Country-by-Country (CbC) Reporting obligations apply to Spanish tax resident groups if the consolidated group’s net turnover in the immediately preceding fiscal year exceeded EUR750 million.
  • Foreign investment in Spain is generally unrestricted except for investments in certain specific sectors, such as air transportation, radio and gambling where foreign investment is restricted.
  • The manufacture, marketing and distribution of weapons and explosives for civil use and activities related to national security require prior governmental authorization
  • Spanish law and regarding listed companies, the company and its directors are responsible for information disclosure
  • YourGlobalPro professionals can assist you in Spain Legal Compliance requirements.

HR and Employment Law and Immigration / VISA

In Spain, the foreigners are allowed to work on work visas. Below are some of the important points in relation to HR and employment law in Spain:

  • Average of 40 hours per week.
  • Employee can only work a maximum of 80 hours of overtime during the course of a year.
  • Full time employees in Spain are entitled to a minimum of 22 days of paid holiday, which must be taken and cannot be substituted for remuneration.
  • If the visa application is successful, the person must collect the visa within one month from the approval date from the office where the application was made.
  • Different type of visa issued by the Spain authority are as under:
  • Visado de trabajo y residencia (Work Visa): Allows the holder to work and reside
  • Visado de estudios (Student Visa): Valid for the duration of an educational course, training programme, research or study
  • Visado de cortesía (Diplomatic Visa): Applies to government officials, medical visits, arts-related activities and humanitarian visits
  • Visado de residencia (Residence Visa): For those wishing to live in Spain not for work but for reasons such as family reunification or retirement
  • Visado de Vacaciones y Trabajo (Working holiday visa). Only for citizens of Australia, New Zealand, or Canada between 18 – 30 years of age who have a degree and a certain level of Spanish language skills

Country Statistics

Capital Madrid
Largest City Madrid
Area Total 505,990 Sq. Km.
Population 46,423,064
Density 92 / Sq. Km.
Currency Euro (u20ac) (EUR)
Government Unitary Parliamentary Constitutional Monarchy
Official Language Spanish
Religion Roman Catholic: 68%
Irreligious: 27%
other religion: 2%
Business Offices 10am - 2pm and then 4pm - 7pm

Get a FREE Quote for Company formation in this country

Download this Country Factsheet