How to start a company in Spain in 2026

Spain is attracting more and more foreign entrepreneurs and investors, as it has everything necessary for commercial success: a favourable geographical location, a stable economy and a favourable tax regime for new commercial enterprises.

To start a company in this wonderful country, you need to carefully follow all legal formalities and know the details of the procedure, which is slightly different from similar processes in other jurisdictions. A new article from the experts at Imperial & Legal provides detailed information about the incorporation process in the Kingdom of Spain.

Key advantages of registering a company in Spain

1. Access to European and international markets

By registering a business in Spain, an entrepreneur gains direct access to the EU market, which has more than 500 million consumers. The undeniable advantages of this country are its strategic location and strong cultural and economic ties with other jurisdictions, which simplify the entry of Spanish companies into the North African and Latin American markets.

2. Convenient corporate legislation and investor protection

A variety of convenient legal forms for registering a business in Spain allow entrepreneurs to protect their personal assets from the company’s financial obligations.

3. Tax optimisation

To attract additional investment into the economy, Spain offers foreign entrepreneurs numerous tax incentives.

4. Prestigious jurisdiction and access to the European banking system

Spain has the fourth largest economy in the EU. This country has never been blacklisted by international organisations that combat money laundering.

Spanish companies are free to open accounts with reliable local banks and financial institutions in European Union countries.

Who would benefit from registering a business in Spain?

The following areas of commercial activity should be highlighted, for which registering a company in the Kingdom of Spain will provide obvious advantages:

1. Technology start-ups and innovative businesses

If your field of activity is fintech, cybersecurity, software development, technological innovation, biotechnology or renewable energy sources, you will find entire ecosystems for the development of promising start-ups in Madrid, Barcelona, Valencia and Malaga.

Spain’s Start-up Law provides tax incentives for new entrepreneurs with innovative ideas.

2. International commercial enterprises

Foreign trade-oriented companies consider Spain to be the ideal entry point to European markets.

A company registered in this country is also well suited for trade with Latin American and North African countries.

3. Service-oriented small and medium-sized businesses

Small commercial enterprises in Spain enjoy advantages such as:

• convenient legal forms for registration;
• 15% corporate tax rate for the first 2 years of operation;
• access to a relatively inexpensive and skilled workforce;
• well-developed infrastructure for business.

4. Holding companies

International holding companies registered in Spain receive significant tax benefits under the ETVE regime, which exempts dividends and capital gains from foreign subsidiaries from taxation and significantly reduces the tax burden on non-resident founders.

Features of doing business in Spain

1. The company must have a physical presence in the country, which means that foreign businesspeople must conduct active commercial activities, renting an office in Spain and hiring local employees.
2. To register a company and open a bank account, a foreign entrepreneur must obtain an NIE – a foreigner’s identification number from the Spanish “Número de Identidad de Extranjero”.
3. Spain has signed international CRS agreements, which provide for the automatic exchange of tax information between countries, so foreign businesspeople will not be able to hide income received or transferred to Spain from the authorities of their country of tax residence.

Taxation of companies in Spain

Corporate tax

The standard corporate tax rate in Spain is 25%. The Spanish government is gradually reducing corporate tax for micro-enterprises and small and medium-sized businesses:

Reduced corporate tax rates do not apply to venture capital investment companies.

Preferential corporate tax rates

New companies in Spain are subject to a preferential corporate tax rate of 15% for the first two financial years. Some Spanish corporations are not eligible for this rule.

If a commercial organisation can be classified as a start-up, in accordance with the Spanish Startup Law, it can pay 15% tax on its profits for four years.

Other options for reducing the corporate tax rate for a company registered in Spain:

• conducting commercial activities in the Spanish African enclaves of Melilla and Ceuta – up to 50% tax deduction;
• tax deductions from 8% to 42% for companies conducting research and development work;
• percentage tax deductions and deductions in monetary terms for companies that create new jobs for Spanish citizens and permanent residents, as well as for people with disabilities.

For more detailed information on ways to reduce corporate tax rates in Spain, please contact an Imperial & Legal consultant.

Capital gains tax

Capital gains arising from the sale of assets owned by a Spanish company are classified as income and taxed at the current rate of 25%.

This tax payment can be reduced by 95% if the capital gains arose from the transfer of ownership of a commercial structure registered in Spain, provided that the taxpayer company owned at least 5% of this asset during the year.

Dividend tax

A similar principle applies to the calculation of corporate tax on dividends received from commercial structures owned by the taxpayer company.

To obtain a 95% tax deduction, the taxpayer company’s share in another Spanish company must not be less than 5% during the year.

VAT

Most goods and services in Spain are subject to a 21% value added tax.

Reduced VAT rates also apply:

• 10% – on a range of essential goods, including food, cinema and cultural event tickets, as well as housing and related services.
• 4% – on essential goods from the basic food basket, books, medicines and medical consumables.

Withholding tax

* – 24% withholding tax applies if a resident company receives royalties for the use of its images

** – A 19% withholding tax rate applies if the royalties are received by a foreign non-resident company registered in a European Union or European Economic Area country. In other cases, when the recipient is a non-resident from a third country, a 24% rate applies.

Special tax regimes

1. ETVE / Entidad de Tenencia de Valores Extranjeros tax regime for Spanish holding companies that own foreign securities.

Exempts from corporate tax that part of the profit that was received abroad from dividends and capital gains.

Also, the portion of ETVE profits distributed among non-resident founders is not subject to withholding tax, provided that these founders are not tax residents of a jurisdiction that can be identified as a “tax haven”.

Non-resident founders may sell their ETVE shares without paying Spanish capital gains tax if the income thus obtained corresponds to the tax-free amount under the preferential regime in question.

2. A special tax regime for industrial, agricultural, livestock and fishing companies in the Balearic Islands allows for a 10% deduction from the gross amount of income tax received from the sale of products produced in this territory. The deduction may be increased to 25% if a company registered in the Balearic Islands increases the number of its permanent staff.
3. The ZEC tax regime for the Canary Islands, subject to a number of requirements, allows a new company registered in this territory to reduce its corporate tax rate to 4%.

You can find out more about the preferential tax regimes available in Spain by consulting our company’s specialists.

Legal framework and corporate regulation in Spain

Spain is one of the countries where the continental legal system is in force, which is based on laws rather than court precedents. A distinctive feature of this jurisdiction is its multi-level legislation, within which Spanish regions adopt their own laws regulating civil legal relations, which are organically supplemented by the Spanish Civil Code.

The creation, management and liquidation of commercial structures in this country is regulated by the Companies Act / Ley De Sociedades De Capital / LSC.

Reporting by Spanish companies

All commercial structures registered in the country must keep accounting records of their operations.

The financial statements of a Spanish company include:

• balance sheet;
• profit and loss statement;
• statement of changes in equity;
• cash flow statement;
• final annual report.

The financial report is submitted annually to the Spanish Commercial Register. Corporate reporting also includes the annual tax return and quarterly VAT returns.

In what cases must a company undergo an audit?

An audit is required if a Spanish company meets at least two of the following three criteria for two consecutive financial years:

1. The total value of the company’s assets exceeds €2,850,000.
2. The company’s net profit exceeds €5,700,000.
3. The company has more than 50 employees.

Other reasons for conducting an audit:

• Specific nature of the legal entity – if the organisation is a foundation, insurance company or sports organisation.
• If a Spanish company has received more than €600,000 in government subsidies or EU funds.
• Request by minority shareholders made within 3 months of the end of the financial year.
• At the request of the head office – for branches of foreign companies.
• To attract additional financing and credit funds, at the request of an investor or bank.
• As part of a complex transaction preceding a sale, merger or significant changes in the company’s structure.

Liability of directors of a Spanish company

Under Spanish law, directors are personally liable to the company’s shareholders and creditors with all their assets for any damage caused by their actions or inaction that contravenes the law or regulations, as well as for failure to fulfil any of the duties set out in their job descriptions in the event of unlawful actions or negligence.

If the director is not the sole owner of the corporate structure, he or she is also obliged to avoid conflicts of interest. A conflict of interest arises when a top manager begins to use the company’s opportunities and assets for personal gain, or abuses his or her official powers and exerts unlawful influence on transactions.

Nominee director services in Spain

The laws in force in Spain do not prohibit the services of nominee directors. Nominee directors are used to perform a wide range of tasks, from complying with corporate structure requirements to performing representative functions in the company.

Unfortunately, a nominee director cannot ensure the confidentiality of the actual managers of the company, as in Spain, information about the beneficial owners of companies registered in the country is regularly submitted to the Commercial Register.

A distinctive feature of the nominee service in this country is the high level of responsibility of the nominee director, which is practically no different from the responsibility of a hired manager, even if additional agreements are signed between the nominee and the real owner of the company in this regard.

Legal forms for registering a business in Spain

1. Sole trader / Autónomo

Only one person can register as a self-employed entrepreneur. To start a business, a self-employed entrepreneur must register with the Spanish Tax Agency and pay monthly contributions to the Social Security Fund. Spanish autónomos do not have authorised capital. However, in the event of bankruptcy, the entrepreneur’s liability will extend to all of their personal assets.

2. Limited liability company / Sociedad Limitada / SL / SRL

To register a Sociedad Limitada, one founder is sufficient, who may be either a natural or legal person, including one of foreign origin.

SL is managed by a single director or a board of directors. The company can be managed by its founders or hired managers. The management is appointed by a meeting of the founders. At least one director in a limited liability company must be a resident of Spain.

The liability of a Sociedad Limitada for debts and financial obligations does not extend to the personal assets of its founders. As a rule ( ), in the event of the company’s bankruptcy, they risk losing only the funds and material assets that they contributed as a share in the authorised capital.

The Companies Act sets the minimum share capital for an SL at €1. However, €3,000 is more commonly cited as the minimum start-up capital for such a Spanish company. This is due to the rule that:

• Registered Sociedad Limitada companies with a share capital of €1 must transfer at least 20% of their profits to a reserve in a corporate bank account until the amount of funds accumulated in this way, together with the minimum share capital, reaches €3,000.
• In the event of the liquidation of the corporation, its founders shall pay the creditor the difference between the minimum amount of €3,000 and the minimum authorised capital of €1 from their own funds if the company’s other assets are insufficient to repay the debts.

An SL is subject to corporate taxation as it has its own legal personality.

3. Open joint-stock company / Sociedad Anónima / SA

SAs have a complex structure and require large amounts of money to maintain. Only one founder is required to register an open joint-stock company. The total number of founders in a Sociedad Anónima is not limited.

A joint stock company may be managed by a single director or a board of directors.

Shareholders are liable for the company’s obligations only to the extent of the value of their shares and do not risk their personal property.

An SA may issue both registered and bearer shares with a nominal value for placement on the stock market. The minimum authorised capital of such a corporation is €60,000, of which at least 25%, or €15,000, must be paid into a special bank account by the founders upon registration.

The most common forms of business in Spain

Other legal forms for registering a foreign business in Spain

• Branch of a foreign company / Sucursal

Legal form – a continuation of a parent company registered abroad to carry out commercial activities in Spain.

It is not a separate legal entity, so the head office is fully liable for the debts of its Spanish branch in the event of its bankruptcy.

To conduct business in the kingdom, a branch will need registration, a separate bank account and a legal representative.

• Representative office / Oficina de Representación

The functions of a representative office are limited to non-commercial activities: researching the Spanish and European markets, establishing business contacts, and advertising the goods and services of the parent company located abroad.

Although a representative office does not conduct commercial activities in the country and cannot sign contracts on its own behalf, it requires registration and a tax identification number.

The foreign parent company is fully liable for the debts of the representative office.

Features of registering a Spanish company

It will be much easier for you to register your business in the homeland of Salvador Dali if you seek the help of qualified corporate lawyers from the very beginning.

Before registering their company, foreign entrepreneurs must meet several key requirements.

Obtain a NIE/NIF

All founders and directors of the future company must obtain in advance:

• Foreign Identification Number / Número de Identificación de Extranjero / NIE – if they are natural persons. The application for an NIE is submitted to the Spanish immigration police.
• Tax Identification Number / Número de Identificación Fiscal / NIF – if another company acts as the founder or director. The NIF application is submitted to the Spanish Tax Agency.

Open a corporate bank account

We will help you open a company current account with one of the Spanish financial institutions.

Find an address for registration

Imperial & Legal agents also search for a legal address in Spain. This can be a real office space, a co-working space or a virtual office. Our choice is dictated by the client’s wishes and two key requirements for the registration address: it must be located within the country and it must be possible to use it for official correspondence.

Come up with and reserve an original name for your company

Usually, with the help of our consultants, the entrepreneur comes up with and submits up to 5 names for the future company to the Commercial Register for verification, after which we reserve one of the approved options for his company.

Prepare a draft of the organisation’s articles of association

The articles of association must set out the corporate structure, types of activities and rules for managing the company. For these purposes, Imperial & Legal employees usually use standard forms of statutory documents, but at the client’s request, we can draw up the articles of association on an individual basis.

Registration with a notary

After agreeing on the charter documents with the founders, our agent contacts a Spanish notary to schedule the signing of the company registration deed. This document includes the corporation’s charter and shareholder information. The entrepreneur participates in the procedure in person, sends a representative, or provides an electronic signature.

To officially complete the process of incorporating a business in Spain, the notarised registration deed must be submitted to the provincial office of the Commercial Register.

The entire business registration process in this country takes an average of 5 to 15 working days. The involvement of our lawyers will help you avoid mistakes when preparing documents and save you a lot of time.

Moreover, Imperial & Legal provides visa support to foreign entrepreneurs so that they can personally represent their company’s interests in Spain. As a rule, Spanish resident visas are suitable for these purposes – for entrepreneurs, for starting a start-up and for digital nomads.

Brief conclusions

Registering a business in Spain will bring significant benefits to foreign entrepreneurs, especially if their field of activity allows them to take advantage of the tax, economic, legal and even geographical advantages of this country.

The level of fiscal burden on businesses in Spain is far from the lowest in Western Europe. However, corporate taxes can be optimised through competent planning based on Imperial & Legal consultants’ thorough knowledge of all the intricacies of Spanish tax legislation.

The procedure for incorporating a Spanish company is no more complicated than similar operations in other European countries, but you will save significant funds and, importantly, your time if you consult our specialists at the stage of choosing the appropriate legal form.

If you need more information about registering companies in the Kingdom of Spain, sign up for the nearest consultation at Imperial & Legal!