Spain is an attractive base for international entrepreneurs and investors, but company formation rules can feel complex to foreign owners. Choosing the right legal form, preparing documents and coordinating notaries and tax registrations requires careful planning. At Mecan Legal, we guide foreign clients through each step, from initial structure decisions to long-term compliance. You benefit from bilingual legal support, clear explanations and a pragmatic approach aligned with your commercial goals.
Choosing the Right Legal Form for Your Spanish Business
The first key decision in company formation Spain for foreigners is selecting the legal structure that best fits your project. Many clients consider an SL, the standard limited liability company, as it offers flexibility and a relatively low minimum share capital Spain requirement. Others may explore a branch or subsidiary, depending on how closely they want to link the Spanish entity to a foreign parent company.
When you set up a company in Spain as a foreigner, you should think about liability, governance, tax exposure and how profits will be repatriated. An SL often suits startups and SMEs, while a subsidiary may be preferable for larger groups seeking local substance. A branch can work where the parent company wants direct presence but accepts full liability.
A specialised corporate lawyer for company formation Spain will assess your objectives, investor profile and group structure. Together, you decide whether to open SL company Spain, create a subsidiary, register a branch or choose another vehicle. At the same time, your lawyer can provide company formation and corporate law advice in Spain, ensuring the legal form supports both current operations and future growth.
Step-by-Step Process to Set Up a Company in Spain
Once the structure is clear, the incorporation process follows a series of legal and administrative steps. Foreign owners often underestimate the importance of sequencing and timing, especially when several parties and authorities are involved. Working with a coordinated legal team reduces the risk of delays, rejected documents and repeated visits to banks or notaries.
Your lawyer will help you plan identification procedures for shareholders and directors, including obtaining foreign tax numbers where needed. They will also coordinate the drafting of articles of association and corporate bylaws, adapted to your governance and investment needs. Clear timelines are set for name clearance, opening a bank account, depositing capital and signing the deed. After notarisation, you still need tax and commercial registry procedures before the company is fully operational.
Name, bank account, capital and notary
In most cases, the process starts with securing a company name certificate. This confirms that your chosen name is available and reserves it for a specific period. Next, you will usually open a provisional bank account and deposit the agreed share capital. The amount depends on the legal form, and for an SL the minimum is modest but must still be properly justified.
The notarial phase involves signing the deed of incorporation, which includes details of shareholders, directors, bylaws and capital. If you cannot travel, a power of attorney may allow your lawyer to sign on your behalf, subject to proper legalisation and translation. Once the deed is signed, it is submitted for registration at the Commercial Registry, a step that gives your company full legal personality.
Tax registration and social security
After notarisation and registry filing, tax registrations become the focus. Your company must obtain a tax identification number and register for relevant taxes, such as corporate tax and, where applicable, VAT. Depending on your business model, additional registrations or sector licences may be necessary.
If the company will hire employees or pay social security for directors, registrations with social security authorities are also required. Your lawyer will coordinate with tax advisors so the company can issue invoices, pay salaries and file returns correctly. This phase ensures your new entity is not only created on paper, but also ready to operate in practice and meet its ongoing duties.
Lawyer’s Tip:
Think about tax, immigration and corporate questions at the same time, not in isolation. A short planning call with a lawyer before you start can save weeks of delay and help you avoid structures that later become inefficient or hard to manage.
Directors, Shareholders and Corporate Governance
Spanish companies allow different combinations of directors and governance structures, which must be reflected in the bylaws. You can opt for a sole director, joint directors, several directors acting individually or a formal board. Each model has implications for decision-making speed, control and risk allocation within the group.
Foreign owners should also define how powers of attorney will work in Spain. In some cases, it is useful to grant powers to local managers for day-to-day operations while keeping strategic decisions at group level. Properly drafted powers reduce bottlenecks and protect against unauthorised commitments.
Shareholder arrangements may require additional contracts alongside the bylaws, especially where multiple investors participate. These agreements can regulate exits, voting rights, funding obligations and dispute resolution. A corporate lawyer will ensure that Spanish law and international practice are both considered, so governance remains practical and enforceable.
Typical Timelines, Costs and Practical Obstacles
Timelines for opening a company in Spain vary depending on documentation, banking procedures and registry workload. In straightforward cases, creation of an SL can be relatively quick once all documents are prepared. However, differences between banks, notaries and registries mean that realistic planning is essential. Your lawyer will explain the usual range for your type of project and location.
Costs depend on notarial fees, registry charges, translations, legalisation and professional fees. It is important to see incorporation as part of a wider setup cost that includes tax and labour registrations. Practical obstacles often arise from missing or inconsistent foreign documents, complex group structures or difficulties with risk procedures at banks. A coordinated legal team anticipates these issues and suggests workarounds, such as alternative banking options or adjusted powers of attorney. Clear communication with your Spanish advisors helps keep expectations aligned and reduces surprises.
Why Work with a Corporate Lawyer for Company Formation in Spain
• Tailored advice on structure, governance and tax impact, aligned with your wider group and investment strategy.
• Bilingual support for foreign owners, turning Spanish legal and administrative language into clear, actionable explanations.
• Proactive coordination of notary, bank, registry and tax authorities to keep the incorporation on schedule.
• Robust documentation and bylaws that protect shareholders, directors and future transactions, including exits or funding rounds.
• Integration with immigration and tax planning so company formation supports visas and long-term personal residence plans.
A corporate lawyer experienced in cross-border work understands how Spanish company law interacts with foreign investors’ needs. At Mecan Legal, our team works regularly with entrepreneurs, family offices and international groups entering the Spanish market. We combine technical knowledge with commercial awareness, so your structure remains attractive to future investors, banks and partners. For many clients, the key benefit is knowing that someone is checking both the details and the big picture.
Ongoing Legal and Tax Support After Incorporation
Incorporation is only the first step. Spanish companies must comply with annual filing duties, corporate governance rules and tax obligations. Boards and shareholders need to approve accounts, formalise decisions properly and keep corporate records updated. Failure to do so can create problems in audits, financing rounds or future sales.
From a tax perspective, newly created companies need guidance on corporate tax, VAT, withholdings and cross-border operations. Our team can provide tax planning for newly formed Spanish companies, aligning compliance with efficient structures. Immigration questions also arise when directors or key staff are foreign nationals. In those cases, we coordinate visas and permits for company directors and staff, ensuring corporate and personal planning move together. With ongoing advice, your Spanish company operates within a clear, predictable legal framework that supports long-term growth.
Frequently Asked Questions
Do I need to travel to Spain to incorporate a company?
Not always. In many cases, you can grant a power of attorney so your lawyer signs before the notary on your behalf. The power and identification documents must follow specific legalisation and translation rules. Your lawyer will explain when a visit is advisable and when a fully remote incorporation is realistic for your situation.
How long does it take to set up a limited company (SL) in Spain?
Timeframes vary depending on documentation, bank procedures and the local Commercial Registry. Once all documents are ready, many straightforward SL incorporations can be completed in a matter of weeks. Delays often arise from incomplete foreign documentation or banking formalities. A well-prepared file and clear coordination usually shorten the overall process.
Can a foreign company be the sole shareholder of a Spanish company?
Yes. Spanish law allows a foreign company to own 100% of a Spanish entity, provided identification and documentation rules are respected. Additional information about the parent, such as corporate documents and beneficial ownership details, may be required. A corporate lawyer will confirm what is needed in your case and how best to present it to the notary and registry.
What are the main ongoing obligations after forming a company in Spain?
Key obligations include annual accounts, corporate income tax returns, VAT and withholding filings, and proper approval of shareholder and director decisions. Companies must also keep statutory books and registers updated. In some sectors, extra licences or reporting duties apply. Ongoing advice helps you understand which obligations affect your company and how to meet them efficiently.