Setting up a business in Spain | Escoem

Setting up a business in Spain

Setting up a business in Spain

Spanish law provides for a variety of vehicles that can be used by foreign companies or individuals for investing in Spain. The most common forms used are the corporation (S.A.) and, principally, the limited liability company (S.L.).S.L.s are the most common type of company in Spain (99.51% of all companies incorporated in the country in 2017). Main characteristics of S.L.s include:

Minimum capital: €3,000, fully paid in and divided into shares (not considered securities).
Managing body structured as follows: sole director, joint directors, directors acting severally or board of directors (minimum of 3 and maximum of 12 directors)..
Possible restrictions on the transfer of shares, so usually there are only a few shareholders. The deed of incorporation must be placed on file as a public instrument.
Average time for incorporation: 3 weeks.

The company structure most often used for large investments that might eventually be floated on the stock market is the S.A. Characteristics of S.A.s include:

Minimum capital: €60,000, 25% of which is paid in, divided into shares (securities represented by certificates or book entries)
Managing body: sole director, joint directors, or board of directors (minimum of three, no maximum)
Independent expert report required for non-monetary contributions
Minimum restrictions on share transfersAverage time for incorporation: 5 to 6 weeks

The liability of shareholders in both types of companies is limited to their capital contributions.

Entity without separate legal personality. No limit on the liability of the parent company.

In general terms, the requirements, procedural formalities and costs of opening a branch in Spain of a foreign company are very similar to those for the formation of a subsidiary (as a company). The main legal steps and costs are summarized below, highlighting the main differences with respect to the formation of a subsidiary.

The alternatives include:

Signing a distribution agreement.
Operating through an agent.
Operating through commission agents.

Acquisition of shares, real estate located in Spain or acquisition of company.

Documentation to be provided to the notary:

Title to the shares being transferred.
Powers of attorney, as the case may be, to appear in the name of the buyer or seller, as appropriate.

NIE/NIF or Spanish national identity card of the buyer and the seller
Declaration regarding the beneficial owner, from both the buyer and the seller.
Documentary evidence of payment and how the payment was made (specifically, if the price was received before execution of the deed, the amount and whether it was paid by check or any other money transfer document, or by bank transfer).

Another way to invest in Spain is to take up temporary stakes in the capital of companies established in Spain (i.e. non-real estate, non-financial and unlisted companies) by forming venture capital entities. Venture capital is defined as those investment strategies that channel financing directly and indirectly to companies, maximize the value of the company through management and professional advice, and divest from the company with a view to earning high gains for the investors. Through this channel, it is possible to invest both in start-up business projects (venture capital), and in already mature companies with a proven track record of profitability (private equity).

The current regulation of venture capital in Spain, contained in Law 22/2014 of November 12, regulating venture capital entities, other closed-end collective investment undertakings and the management companies of closed-end collective investment undertakings (the “Venture Capital Law”), relaxes the legislative framework for these entities with, among others, the aim of helping them to raise more funds to be able to finance a larger number of companies.


World economy

Spain is a modern economy with a GDP of 1,200 million.

Foreign companies

They chose Spain for business and investment

EU economy

Spain is the fourth largest economy in the European Union.

Fiber optic homes

Spain is the country in the European Union with the highest FTTH penetration rate.

Distribution of the main exports and imports in Spain


  • Equipment goods20%
  • Foods16%
  • Automotive sector15%
  • Chemical products14%


  • Equipment goods21%
  • Chemical products15%
  • Energy products13%
  • Automotive sector12%

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Antonio Ramón Iáñez Sáez

Eloy García Tejada

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