M Mallorca, with its vibrant economy and strategic location, offers an attractive environment for foreign entrepreneurs looking to establish a business presence. The question I am asked very often is: in which form?
This blog post will provide insights into the steps involved in the process of establishing Sociedad limitada. In another post I will go through the process of setting up an Establecimiento permamente (EP) and then explore the key tax differences between these two options.
Sociedad Limitada is a popular legal structure in Spain, similar to a limited liability company in other jurisdictions. Here are the key steps to establish an SL as a non-resident:
Select a unique and available business name for your company. Ensure it complies with Spanish naming regulations.
Nominate directors and shareholders. A single shareholder is sufficient, and they can be non-residents.
Draft and sign the company's articles of association before a Spanish notary public. This can be done in person or through a power of attorney.
Obtain a Spanish Tax Identification Number (NIF) for the company and its representatives.
Register the company at the Spanish Mercantile Registry.
Open a corporate bank account in Spain for the new Sociedad Limitada SL.
Comply with Spanish tax obligations, including corporate income tax and Value Added Tax (VAT).
Fulfill annual reporting and compliance requirements, including bookkeeping and submission of annual financial statements.
Choosing between the different company forms in Spain depends on various factors, including the nature of your business activities, desired level of control and taxation considerations. By carefully weighing the pros and cons of each option, non-resident entrepreneurs can make informed decisions to establish a thriving business presence in Spain. Consulting a professional with expertise is crucial to navigate the intricacies of these processes successfully.
Feel free to contact me if you have any questions.