Frequently asked questions
Spanish taxes is a serious duty. The process is highly modernize and the tax authorities have an incredible amount of data about your earning, there are several easy ways to proceed with your tax declaration, but it is highly recommended to contract a tax agent as will certainly find way to maximize your income. As an example a foreigner has only the first six month to declare as a nonresident and pay taxes at a most advantageous rate. It is in our holistic approach at Henry Towers where we take all these opportunities into consideration and propose you a solution that will help you on the short and long term.
Representative offices are only suitable when no substantial economic activity is to be undertaken in Spain and the office will be limited to performing secondary activities, such as coordination, collaboration or promotion of the parent company's activity.
A branch has no legal personality and is dependent on the parent company. It does not require a minimum or explicit capital allocation. This structure is suitable in cases where, for example, the parent company wishes to maintain greater control over its activity. Remember that the parent company will be liable from its own capital for the activities of its branch.
However, a subsidiary is an independent legal entity and therefore usually acts with greater flexibility and shares the risk with its parent Company.
There are management fees, most banks charge a small amount for the annual management of the account, and this will be around 25 Euros.
Yes they can, Spanish civil and commercial jurisdiction declares that there is a right of appeal for cases over 3000€. There may be a further extraordinary appeal to the Supreme Court on cases over 600,000€.
Yes, as far as it is validated by a Spanish notary in Spain, the Spanish Embassy, or by Spanish notaries outside of Spain.
Absolutely you can start with some interim services and the transfer the person to the legal entity you have created without prejudice to any of the parties. If you are in a rush to start your business activity and need someone, we can offer you several options.
Unfortunately, it is not possible to open a bank account from abroad. The banker need you or a representative in order to proceed with the account opening. In this Case Henry Towers can do this service for you.
European regulations only allow VAT recovery for registered business entities. There is a separate refund system available for goods, not services, purchased for personal use, at Henry Towers we certainly take care of both on your behalf.
The principle of proportionality justifies having a model of compliance adapted to the internal and external circumstances of the company. But in no case justifies not applying the principles of effective compliance.
The principle of proportionality cannot support irresponsible management.
We can provide in alignment with the legislation up to six month period testing for you to evaluate candidate suitability and performance to your business.
The option of whether or not to act through an industrial property agent is a personal choice and never an obligation or mandatory requirement, except in the case of applicants who do not reside in the European Union.
The SPTO notifies interested parties of any incident or resolution and communicates the timeframe for any processing needed (generally interested parties have one month to resolve and respond). Representation through an industrial property agent facilitates processing for the applicant, and is recommended, but resolution of the application is always as stipulated by law, i.e., the conditions for granting industrial property titles are the same with or without a representative.
No, our simplified model will establish a monthly fee in agreement with you so you only need to worry about the taxes and imports that your business might need to satisfy to the Spanish statutory bodies. These will be calculated and forecasted to you in advance by our team of experts.
Yes, we can provide you with wide range of test, as part of the process we deliver to you five aspects of candidate’s personality and very comprehensive and extensive report of candidate’s abilities. A more customized service can be provided, if it is required.
Yes indeed, we do provide Payroll Solutions, please for more information refer to Payroll Services
There are many key elements to build value for your business. Here are some of the most important value builders:
- SIZE: The bigger the better, larger companies with multiple offices are in greater demand as there are fewer of them.
- HIGH GROWTH RATES: This will show buyers that they can potentially recoup their investment faster, so they can pay you more.
- SPECIALIZED SERVICES: Niches usually command a premium, as buyer needs your expertise to grow this sector. And they often have higher margins.
- HIGH GROSS MARGINS: This gives the buyer more flexibility to operate the business and maximize results, hereto more investment that potentially could go to you.
- DIVERSE CUSTOMER BASE: Minimizing business risk by ensuring your business is not captive of a few clients.
- GOOD MANAGEMENT: Good investment from you side will save money to the buyer, investing on management will also help you maximize your value, as reduces buyer’s required investment.
- SOLID INFRASTRUCTURE: This can lower investment costs for buyer.
- EMPLOYEES: This is always preferable to independent contractors.
We at Henry Towers have a strong commitment to data security. All client data is processed by our teams and all invoices and records are returned to you upon completion of the claim.
Despite most of the officials are speaking English, bureaucracy fills very corner of every action that one wishes to take, it is highly recommended that very contract and action shall be revised by Spanish lawyer. Almost every significant action one takes will require a form.
Private equity adds value to a company in a variety of ways. Thorough due diligence sheds light on a company’s strengths and weaknesses alike, and with it comes a sound initial investment rationale. By targeting growth sectors and new markets, private equity investors can focus on creating better revenue generation and implementing programs that yield operational efficiencies. In addition to cost reduction, organic growth is now increasing in importance as growth by acquisition is becoming relatively harder to undertake.
It is also critical to establish a structure in which both investors and business managers share a common ownership vision, and are motivated to maximize value. Active ownership, effective organizational change and powerful incentive schemes are all part and parcel to the hands-on governance model that includes constant and keen oversight, defined goals and timing, disciplined decision-making and deep resources to match. Ultimately, this approach leads companies owned by private equity to outperform similar publicly-owned companies with relative benchmarks.
A power of attorney grants the authorized officer to act as your legal representative with full efficacy within the area of powers granted. The efficacy is such that, even though the power of attorney has been revoked, unless the deed granting power of attorney is not withdrawn, the authorized officer can continue to act. For this reason it is important to define specifically the powers granted and find out about their respective effects.
You need to deal with each country you are filing a claim. A claim has to be filed with the local tax authorities, one per country, usually in the local language. For non-EU entities, the original invoices must be submitted with the claim, including signed refund forms.
Accounting is the basis of the economic information of the company. After proper accounting processing, it is possible to determine if the company has profits or losses and its evolution, the correct balance of assets that guarantees liquidity and the continuity of the same and its evolution. In addition, it is the basis for the realization of periodic tax returns and for the documentation requested by the banks for any kind of financing request.
In normal circumstances Spanish courts are overloaded. Normally getting a judgment in the first instance may take about a year. If there is an appeal, the matter can be delayed much longer.
Industrial Property rights remain in force as long as the maintenance and renewal fees are paid within the following timeframes:
- Patents. Maximum of 20 years from the application date. Only in the case of patents for pharmaceutical and phytosanitary products is it possible to apply for what is known as a Supplementary Protection Certificate (SPC), which extends the protection of a patent for a maximum period of five years after expiry.
- Designs. Maximum of 25 years.
- Distinctive signs. Can be maintained indefinitely by timely renewal.
Once the above periods have expired, the inventions are in the public domain and can be freely used by anyone. It is important to point out that Patents and Industrial Designs cannot be “renewed” indefinitely as in the case of trademarks.
It will take us about 2 weeks once we have collected all information to start the marketing process. We produce several documents al approved by you as a client, along with potential buyers list. Once we start to publish your offer, it might take from two weeks to several months before a potential buyer might show interest. Once the seller has provided us with the material to market the company, it takes about 10 days to start the marketing process. We first produce a Blind Overview, Potential Buyers List, Confidential Offering Memorandum and Trailing Twelve Month financials which are all approved by the client. The next period of the process is called the due diligence period where the buyer thoroughly examines all aspects of the company being purchased. Depending on the size of the selling company this process could take anywhere from two weeks to two months.
The last part of the transaction involves the production and negotiation of the agreements and its terms. This process could take two to four weeks depending on the experience levels of the lawyers involved on both sides.
In summary, the sale can take anywhere from three to nine months and sometimes longer to complete.
The approximate timeframe to incorporate a company or a branch in Spain ranges from a few days to a month. This may be extended by the formalities involved in obtaining a Tax Identification Number and Foreigners Identity Number, grant of powers of attorney, administering the documentation required and internal decisions of the promoters.
As setting up a representative office in Spain is not regulated from a legal perspective (apart from exceptional cases such as the representative offices of financial institutions), and incorporation is not subject to compliance with any formalities, setting up a representative office in Spain is almost automatic, but may be extended by the formalities for obtaining a Tax Identification Number or Foreigners Identity Number, grant of powers of attorney, administering the documentation required and internal decisions of the promoters.
Generally speaking, from 30 to 45 days after the business appraiser receives the requested information from the client. Requests for expedited service are considered on a case by case basis.
VAT refund projects' vary significantly. However the average time-scale to complete our internal processes would be one to two weeks. The timing of the tax authorities vary from country to country with a range from 2 to 4 months, at Henry Towers we take care of the follow-up and keep you updated.
The following are some guidelines that companies should follow to establish time limits in the preservation of business documentation, taking into account the existing regulations on commercial, fiscal and general prescriptions.
- Commercial norms – 6 years
The Commercial Code provides that business owners must keep their books, correspondence, documentation and supporting documents concerning their business, duly ordered, for six years from the last entry made in the books.
In addition, in many cases, it is necessary to consult accounting or mercantile issues of a long time ago, for example, when selling shares acquired many years ago, it is probable that the deeds of purchase of the same and the Review of the accounting notes made at the time.
Therefore, not only must companies keep all their commercial documentation for six years, but it is highly recommended to keep the following documentation indefinitely:
- Official Accounting Books
- Accounts signed
- Long-term contracts
- Computerized backups of accounting records
- Labour documents – 4 years
The Spanish legislation, by means of norms included in the Civil Code, the Statute of the Workers or in the General Tax Law, to cite some examples, establishes different periods of preservation of documents, which forces companies to retain documentation during periods Time variables. Sometimes, the same document can be useful for different types of actions, subject to different periods of prescription. Here are some of the minimum deadlines that must be respected in document preservation according to social legislation:
- Contract of work : must be kept a minimum of 4 years from the end of the employment relationship
- Monthly summaries of the day records for a minimum period of 4 years.
- Salary receipts issued will be archived and kept by the companies, together with the Social Security Contribution Bulletins, for a minimum period of 4 years, in order to allow the appropriate checks by the labor authorities.
- Copy of identity documents of foreign citizens: a minimum of 4 years.
- Career development and talent management programs: a minimum of 4 years.
- Data of candidates not selected: a minimum of 3 years.
- Data related to temporary workers: a minimum of 4 years
- Exhausted Visitor Books will be kept at the disposal of the Labor Inspection and Social Security for a period of 5 years, counted from the date of the last diligence.
- Tax regulations – 4 years
The General Tax Law establishes the well-known general limitation period of four years, counting from the end of the term of presentation of the declarations, so that Taxation determines the tax debt by means of the timely liquidation and / or demand the payment of the same.
This term also affects the possibility of the taxpayer to request and obtain the refund of their taxes.
However, this term may be interrupted by any duly notified tax action or by the filing of claims or appeals by any taxpayer. Therefore, before doing the classic exercise of counting back four years to decide what documentation to destroy, it is necessary to check whether, in some tax, the term of four years has been interrupted.
- Tax deductions and losses – 10 years
In addition, with fiscal developments introduced in 2015, the limitation period for the verification of negative tax bases and deductions is 10 years from the end of the deadline for the presentation of the statement in which they were generated. Therefore, for the years in which these incentives were generated, the limitation period is not four but ten years, unless the last year in which they have been applied has already been prescribed. Once the period of 10 years has elapsed, the Treasury may still demand, provided that the last year in which they have been applied has not been prescribed, the contribution of the corporate tax return and the annual accounts of the year in which they were generated.
Information requirements of Hacienda (Tax Agency) – 6 years
The activity subject to a limitation period is limited to the actions indicated above but not to the activity of verification, which, for example, may affect third parties and entail obligations to supply information to the inspection.
Therefore, for this purpose, companies should keep all documentation with tax implications during the six-year trade prescription period.
Failure to comply with an information requirement by being obliged to do so may result in a penalty of 2% of the offender's turnover, with a minimum of 10,000 euros, so caution should be exercised.
Other specific documentation
There is some documentation that needs to be kept beyond the four, six and even ten years indicated above.
For example, if a company has the right to write off certain expenses or assets and charge the corresponding expenses to the income statement for future years, the inspection also has the right to verify the origin of such charges, even if they come from prescribed exercises. Therefore, for invoices and other proof of fixed assets, the limitation period must begin to be calculated from the last amortization exercise.
The same applies to certain financial instruments, concessions, capital subsidies and, in general, all those expenses and revenues that are charged to the income statement over several years.
- Other special terms
The Civil Code also regulates the statute of limitations and indicates the different terms of the same, that is to say, the maximum term that the norm establishes to exercise a certain right.
It indicates that personal actions that do not have a special term of prescription, will prescribe at 15 years, counted from the moment in which the exercise of the action was possible. These types of actions are usually related to the business activities of companies.
This means that companies assume all the responsibilities derived from their activities, which may be required in the future by third parties within the limitation periods. Therefore, they will have interest in preserving, during that term, the documents that support their actions, in case someone interposes a claim demanding responsibilities.
The hiring process timing might be very variable depending of the profile of the candidate we are looking for, at an average we aim to fulfill the position in 25 days. In case you are in a rush, we have alternative solution to ensure we keep your business up and running.
Opening an account itself is free of charge.
A branch is a permanent establishment without a separate legal personality to the business entity that creates it. It is in a relationship of dependency and subordination to the governing bodies thereof, and can carry out any activity covered by the corporate purpose of its parent company.
Branches, unlike companies, do not have capital stock, so do not require a minimum capital contribution. Administrative, notary and registry costs average approximately 600 euros, to which any discretionary provision you wish to provide should be added.
The cost of incorporation depends, among other factors, on the start-up capital of the new company.
Broadly speaking, the average cost of incorporating a Sociedad Limitada (Limited Liability Company) in Spain is approximately 550 Euros (with capital of 3,000 euros) plus the capital contributions, while the cost of incorporating a Sociedad Anónima (Public Limited Company) is approximately 750 euros (with capital stock of 60,000 euros) plus the capital contributions.
Representative offices are structures that are not specifically regulated in Spain (except in the case of representative offices of credit institutions). Representative offices have no independent legal personality from their parent company. Representative offices have no formal administrative bodies, so the actions performed by the office must be carried out by the representative under the powers granted to him or her.
The activities of the representative office should be limited to performing secondary coordination, collaboration or promotion activities for the parent company's activity.
No capital allocation is required for representative offices. Administrative expenses (optional) amount to approximately 450 Euros.
VAT rates and refunds eligibility vary from country to country. For example, VAT rates for transportation (taxi service) range from 6% to 25%. Estimates of the VAT refund potential can be done.
How to make a step by step invoice correctly? We explain everything you need to know, from the requirements you must meet to make your invoice legally valid, data and taxes to include or situations in which it is necessary to make an invoice or it is possible to use a ticket as a substitute document of the invoice.
The company-worker relations are regulated by the Collective Agreements which constitute the specific rule to be taken into account to determine the minimum conditions relating to salary, categories, day, holidays, etc... We will manage the application of the collective agreement to your Company.
- Transactions between related persons or entities shall be valued at their normal market value, which would have been agreed by independent persons or entities under conditions of free competition.
- For the determination of a market transfer price between related parties, several methods can be used. We will focus on the direct ones that are:
- Uncontrolled Comparable Price Method (CUP). It compares the price of the transaction classified as an operation linked to other comparable, uncontrolled or external similar transactions between the parties. This method compares prices, not margins and for it can be used the prices of customers or suppliers, comparing the physical characteristics of the product, its quality, geographic market of the sale, etc.
- Price Resale Method. It uses the margin that an independent seller would obtain in the resale of a product similar to the one that has been object of transaction in the related operation. It is usually used in distribution activities. The calculation uses: purchases of similar products from unrelated persons, sales of similar products by the supplier to unrelated parties in similar markets and similar transactions between independent parties.
- Increased Cost Method (C +). It compares the related transactions according to the gross margins obtained, adding an appropriate margin that would be used in an independent transaction.
- There are also indirect valuation methods such as the profit split method and the Transactional Net Margin Metho (TNMM)
It is not required to deposit any amount when opening a bank account, we recommend to deposit a few Euros to ensure you don’t enter into debt right away. Banking fees are not very expensive, a few hundred Euros will be sufficient. Note that non-resident in Spain must declare all sums in excess of 6,010 Euros in cash.
The company must take care of disseminating the Company Policies contained in the Compliance and the Code of Conduct, so as to ensure that they are known by all its employees. A good practice is, in addition to making them known, to record in writing that they are known by their recipients, as well as being accepted by all by signing the document containing them.
The advantage of having the signature is twofold: a) no one can plead ignorance and b) the signed document will constitute evidence before a court.
Is it advisable for the supervision, monitoring and control reports to be in writing?
The written report facilitates the proof that the supervisory function has been carried out, if necessary. In addition, the written report made according to a predetermined protocol contributes greatly to the execution of the action plans in the face of irregularities or incidents observed.
How often should the Compliance review be carried out?
There is nothing established as standard. However, 3 key moments of Compliance review can be established:
- A minimum periodic biannual or annual review.
- When changes occur in the company or in the environment.
- Where there has been a breach of regulations.
Yes and this may be due to the fact that the remuneration is daily, or a regularization of the applicable withholding rate. It must be taken into account that the company must check the retention of its workers so that it is at all times the one that corresponds according to the personal circumstances of each worker.
Yes, you simply have to submit the quotation bulletins and request a regular deferral. In this way, the obligation to present the quotation bulletins in time, the company does not lose the condition of being current of payment and obtains the possibility of paying the amount, with the corresponding surcharges.
Yes, it is not only possible, it is the first thing that must be done to know the cost that will be for the company and to be able to even evaluate the opportunity among the different contract types to maximize subsides and aids from government.
Industrial property rights are not mandatory but highly recommended, the exclusivity rights will require the proper registration within the agency.
Yes, since the general rule is that all the amounts received by the worker are salaried and, therefore, are quoted to the Social Security. Generally speaking most of the concepts are, there are some exceptions such: transportation allowance, distance, subsistence expenses, travel expenses, severance or removal expenses, etc ... Our job is to advise you on all these aspects, so you maximize your employee salary without incurring into additional social charges.
Indeed the Spanish legislation allows for a six month period for any permanent contract. We can also monitor this on your behalf with our payroll services.
Yes. Our company uses a system which allows us to connect directly with the computers of the Social Security and to communicate the highs, lows, request certificates of being up to date with the payment, etc ... with the maximum speed and through a simple phone call from the customer.
All minutes of meetings of corporate bodies (including decisions taken by the sole member of single-member companies) must be submitted electronically for legalization (within four months of the end of the fiscal year).
The keeping of this Book of Minutes may be unique, that is, a single book of Minutes for all the collegiate bodies of the company (General Meeting of Members or Shareholders, Board of Directors, etc.) or keep a Book of Minutes for each One of the collegiate bodies.
In any case, it will be necessary to state the opening date and closing date of the exercise presented for legalization.
We have already mentioned it in a previous section, but we do not consider it redundant to re-emphasize this fact, at any time during the fiscal year, books of details of minutes and minutes of the current year can be legalized for evidentiary purposes or of any other nature and Without prejudice to the fact that in the minutes book of the whole exercise, these minutes already submitted are again and compulsorily included again.
This is a Book that should have been legalized once the company is registered in the Mercantile Register (it will be the first of order), in which the initial ownership of the founders is recorded.
Thus, if this book has already been legalized, it will only be mandatory to legalize a new book in the four months following the end of the year in which there was any change in the initial or successive ownership of the shares or shares Charges levied on them; That is, if there have been no changes, you MUST NOT present this book.
If this book was not legalized, it can be legalized by including it in the first books submitted telematically. This book must contain the minimum required information.
The primary reason to have a corporation is to protect your personal assets, our lawyers will ensure you keep your business compliance and yourself save from any dispute that might occur over time so you don’t get sued.
It has long been clear that the electronic invoice is the prevailing invoice model, definitely displacing the paper invoice. In fact, the billing regulation gives the same treatment to the electronic invoice as to the paper invoice. In addition, since 2015 it is mandatory for public administration providers and large companies to use them.
We recommend our specific article on the electronic invoice, where we analyze its characteristics and operation.
There are three types of bank accounts: current, savings and company account. Moving money across any account is very simple.
One of the most popular issues among the workers sector is the different types of employment contracts that exist. Many times, due to lack of knowledge about employment contracts, an employee is kept for a long time in a contractual situation that is not at all advantageous to his economy. That is why it is important that you inform yourself about the types of contracts and the possibilities of employment that you have (even in your first job).
- Indefinite contract
The main feature of the indefinite contract or fixed contract is that it does not have an end date set. Let's say that the indefinite contract has effects until the company or the worker ends the employment relationship.
It is the most usual (or at least should be) labor contract , because it ensures a certain peace of mind for workers, who are not subject to an end date and do not work with the continued uncertainty of dismissal.
For this reason, many of the employees who have this type of contract are popularly called "fixed".
- Temporal agreement
Temporary contracts as their name indicates have an end date, since they are for a very precise time and have a seasonal character.
At the moment in Spain, around 25% of existing contracts are temporary (precarious contracts). Many of these contracts are associated with certain months of the year in which certain sectors experience a boom of clients, as it happens with the hotel trade during the summer months or in the big commercial surfaces during Christmas.
- Contract for training and learning
Another type of contract increasingly widespread and popular, is the contract for training and learning.
We are dealing with a type of contract intended for workers to obtain extra training and that is paid by the company to increase their knowledge. It is very common to expand the knowledge of younger workers.
It presents different requirements for its implementation, and is that the employee should be in the age range between 16 and 25 years (except for people with disabilities and in social exclusion groups) and not have sufficient qualification for a trainee contract.
Likewise, the salary received may not be less than the Minimum Inter-professional Salary and the contract must have a duration between 1 and 3 months.
- Training contract
The Universities know it well: the contract of work in practices. We are looking for a type of contract that aims to get the newly graduated to acquire experience on the studies carried out thanks to an internship in company. This is often necessary especially for starters, so there are internships for many newly graduates to get "their first job".
The main requirement is that the professional has a university degree to develop his new work activity. However, there are some requirements and advantages that you can know firsthand through the Public Employment Service.
Opening a bank account in Spain it is simple and fast for anyone over 18 years old. You will be required for a passport, proof of occupation or status, confirmation of address and your NIE (Número de Identifiación Extrajeros). We strongly recommend you to get assistant or ask to your potential new bank for the process to transfer funds from a foreign account. The Tax Authorities are very sever with the prevention of money laundry.
Related transactions are those carried out between natural or juridical persons between which there is a certain degree of connection between them, either because they belong to the same business group , share managers, have common shareholders, or because there is a family relationship of the first Or second degree among the people who perform the operation.
Article 18 of the Corporate Tax Law specifies that "transactions between related persons or entities shall be valued at their market value. A market value shall be understood as having been agreed by independent persons or entities under conditions which respect the principle of free competition ".
Linked operations affect companies in a number of ways:
- Accountants, in accordance with accounting regulations and international standards on transfer pricing. In addition, there are information and accounting documentation obligations in the area of annual accounts, specifically in the report of the PGC and the PGC-PYME.
- Prosecutors, to comply with the requirements of the Tax Agency.
- The analysis of the accounting , fiscal and documentary aspects in each case of application requires a detailed study, a study that can be approached in three phases:
- Analysis of related operations: tax valuation, linkage concept, analysis of valuation methods, documentation of operations, sanctions and analysis of the main operations.
- Accounting for linked transactions: concept of related transaction in the accounting field, accounting of transactions and types of transactions between related parties. The main transactions between related parties affecting accounting are:
- Loans society-partner and socio-society.
- Rentals company-partner and partner-society.
- Non-monetary contribution.
- Sales of fixed assets.
- Sales of stocks.
- Provision of services.
- Business combinations.
- Accounting for investments in equity of group companies, multigroups and associates.
- Transfer prices between operations between group companies.
An SME enjoys a great advantage over the large company: its dimension allows its managing body a closer supervision of the operations carried out by the company. So it is that the Compliance Officer of the SME does not find it difficult to know what is happening within the company and can detect the irregularities and correct the risks quickly and effectively. The small company is more accessible to the awareness of the employees. The disadvantage of the SME is that the resources available to make them available to a compliance program are limited compared to those available to the large company
A contract is structured in several ways; however, there are arrangements that cannot fail to be configured, as without them the agreement would lose value. These are:
- Capacity: It is subdivided into capacity to enjoy, which is the legal capacity to have subjective rights (also called legal capacity); and capacity to exercise, the legal capacity to exercise rights and assume obligations without representation from third parties, (also known as capacity to act).
- Consent: It is manifested by the concurrence of the proposal and the acceptance of the thing and the cause that must compose the contract. However, the consent given by error, intimidation, violence or fraud will be annulled.
- Purpose: The benefit that the parties agree to assign under the agreement.
- Cause: In certain contracts, such as sales contracts, the cause is the promise, by each contracting party, of one thing over the other.
- Form: This is when a certain form of contract is required (written, signed before a notary, before witnesses, etc.), although not in all cases.
- Natural elements: These are the elements that are inferred and incorporated in the contract, although the parties involved can do without them without invalidating the contract.
- Accidental elements: These are established by special provisions and must not be contrary to law, morality, solidarity, etc.
When drawing up any contract, you must take this list into account and check several times that all the elements are present. You can even use tools like memorizar.com to make sure you don't forget any of the points.
Good records can help you make decisions that affect the future of your business. The more organized your records are, the more easily accessible information is to help you make good business decisions. So good records help with, amongst other things, the following:
- Tracking and comparing past and present financial positions
- Planning and forecasting future financial positions
- Satisfying reporting obligations
- Saving time and energy if your business gets audited
In Spain, industrial property protects all creations related to industry: patents and utility models, distinctive signs and designs.
In contrast, intellectual property is reserved for protecting creations of the mind in which the author's personality is captured, and that are unique creations, not industrially manufactured or mass-produced.
These creations can be literary and artistic works such as novels, poems and theatre plays, films, musical works, artworks, drawings, paintings, photographs and sculptures or architectural designs, as well as rules for games and computer programs.
For each one there are different laws and the authorities responsible for their management are also different: the Spanish Patent and Trademark Office deals with the recognition of industrial property rights and the Intellectual Property Registry deals with intellectual property rights.
In the first place, it is necessary to communicate, prior to the provision of the services by the worker, his discharge in Social Security and prepare the employment contract.
In order to carry out the contract and the contract it is necessary to know, besides the personal data: the work to be carried out, the training or studies, the schedule and the day, the duration of the contract and the salary. In some cases it is imperative that the worker is registered as unemployed in the INEM (Unemployment office) and if it is a foreign worker, it must first be verified that he has the appropriate work permit.
Unfortunately there are many and they might vary depending of your business activity, some common ones are:
- Declaraciones de IVA - VAT quarterly declaration – Form 303 (quarterly) and Form 390 annually.
- Impuesto de sociedades - Company taxes – Form 190
- Declaración anual de operaciones con terceros – 3rd party business declaration – Form 347
- Impuesto de actividades económicas – Business activity tax – Form 840
The power of attorney must be granted by a person with sufficient standing: either the actual principal if it is a natural person, or an authorized representative or manager with sufficient powers if the principal is a legal entity.
- In the case of a Spanish legal entity, the power of attorney is usually granted in Spain. The principal must appear before a Notary Public. Neither the presence nor the acceptance of the authorized representative is required.
- In the case of a foreign legal entity, the power of attorney is usually granted in their country of origin. In that case, the principal must appear before a Notary Public in the country in which the power of attorney is granted. The power of attorney must be legalized with the Apostille of the Hague Convention of 1961, if the country in which it is granted is a member. If the country in which it is granted is not a member, the procedures for legalizing documents in that country should be followed. A sworn translation is required if the power of attorney is not in Spanish.
In both cases, the principal must bring with them the document certifying their capacity and entitlement to grant the power of attorney.
It is important to formalize the shareholders’ agreement, those minutes are required to be formatted and presented to the Registro Mercantil, even sometime might require to be notarized. The minutes and its book (actas y libro de actas) needs to be updated, as it is required.
Setting up a company in Spain basically requires it to be incorporated before a Notary Public and filed in the Companies Registry. To this end, and broadly speaking, the following steps must be completed:
- If done through a representative, the founder(s) must grant a power of attorney to the person incorporating the company.
- Application for a Tax Identification Number ("NIF"), in the case of a legal entity, or Foreigners Identity Number("NIE"), if a natural person, for the foreign partners and directors of the company being set up.
- Application for a company name clearance certificate.
- Open a current account to deposit capital allocations and obtain bank certification.
- Incorporation of the company before a Notary Public through issuing the articles of incorporation.
- Application for a provisional NIF (tax identification number) for the company.
- Payment of Asset Transfer Tax.
- Filing with the Companies Registry.
- Obtaining the company's definitive NIF (tax identification number).
- Legalization of the business' official books and ledgers.
- Tax formalities.
- Employment formalities.
(1) In Spain, a "notario", a state official with the powers of a Notary Public.
Tax classifications are diverse, but the best known and most widely used is the one that distinguishes between direct taxes and indirect taxes. Direct taxes are those that are applied on a direct or immediate manifestation of the economic capacity: the possession of a patrimony and the obtaining of an income. On the other hand, indirect taxes are those applied on an indirect or indirect manifestation of economic capacity: the circulation of wealth, either by acts of consumption or by acts of transmission.
- Direct Taxes
- Personal Income Tax – This tax falls on the income, as an immediate manifestation of the economic capacity of the citizens, since it is considered that the income of each person is indicative of their degree of well-being and, therefore, it allows determining the contribution of everyone to the maintenance of public expenditures.
- Non Resident Income Tax – This tax is applied to the income obtained in Spain by people who do not live in Spain.
- Corporate Income – This tax is applied to the profits that companies earns from their activity. Specifically, it is applied on the net profit.
- Tax on Inheritance and Donations – The tax on Inheritance and Donations is paid by people when they receive money or other goods for free.
- Tax on Patrimony – It is a tax that applies to the possession of a patrimony, understanding by this the set of the goods and rights that owns a person, to whom it is necessary to subtract the charges, debts and obligations that that person must do front.
- Indirect Taxes
- Value Added Tax – It relies on sales, so that its object is consumption considered as an indirect manifestation of the economic capacity of the people, to the extent that it constitutes an act of disposition of income that reveals its purchasing power.
- Tax on Patrimonial Transmissions and Documented Legal – This tax has a wide scope of application and is subdivided into several modalities. Very briefly, it can be said that it applies to the transmission (sale and purchase) of all types of goods and rights, certain operations carried out by companies and acts that have to be officially documented (deed of a house and other notarial documents). The person who has to pay the tax is the acquirer (buyer), not the one who transmits the good or right (seller).
- Rent of Customs – It is a set of rights whose common note is that they are liquidated by the Spanish customs authorities. As regards the customs debt payable on import operations, it is made up of customs duties and other levies established under the common agricultural policy.
- Special Taxes – These taxes are only paid by people who buy or consume certain goods: Alcohol and alcoholic beverages, Hydrocarbons, Tobacco, Registration of means of transport.
We are a boutique law firm that pretend to adjust to our client needs. Although our main focus is on few law practices we know what our priority is, our clients. Henry Towers legal services:
- Litigation – Dispute resolution and litigations of commercial and civil law.
- Bankruptcy/Insolvency law – Preventing advice from a legal, fiscal and labour perspective. Feasibility plans.
- Commercial law – Help our clients to develop a resolve commercial solutions and disputes.
- Labour & Employment law – Full coverage in all key labour and employment areas.
- Financial – Beyond tax consideration and compliance we defend your interest if required at the court.
- Public law – We support you on dealing with public law entities, advisory and litigation support.
The bank documents are composed of extracts sent by the entities and the supporting documents associated with them.
In some cases the banks do not offer certain supporting documents, so it is necessary for the company to keep them for the correct control (ie. in the case of entry of customer checks is necessary or make photocopies or save the letter of payment sent by the client or keep the document of entry into bank with annotation of the invoice to which belongs)
Its accounting is the basis for knowing the status of debts and credits of the company. Apart from the use of supplementary controls, the accounting offers, on a given date, the status of each customer or supplier account.
All books that must be borne by entrepreneurs. Thus begins the wording of article 18 of Law 14/2013 mentioned above, so if we stick to the minimum stipulated by the different legal provisions, we are talking about the following books:
- Inventories and Annual Accounts (including the report).
- Register of Partners or Registered Shares, depending on the type of company.
- Contracts of the Sole Partner, in the case of sole proprietorships.
However, depending on the activity and detail of the content of each book, they must be presented:
- Inventory and Annual Accounts.
- Check balances (sums and balances).
- Book of Profit and Loss.
- Issued invoices.
- Invoices Received.
- Detail of the Journal.
- Registration of Registered Shares.
- Registration of Members.
- Minute book.
- Book Detail of Proceedings.
- Book of Minutes of the Council.
- Book of Minutes of the Council.
- Book-Register of Contracts of the Unique Partner with the Sole-Shareholder Company.
In addition, employers may legalize in any exercise (if they wish) any other book that is not mandatory, usually because it is interested to register it for "evidential" effects.
It is customary to assess the budget allocation of a compliance on the basis of turnover, the number of employees or their international dimension. Such a way of allocating budget to the compliance function is a recurrent error, paradoxically, there are small companies that, due to the nature of their operations or the markets in which they operate, require complex compliance models.
An appropriate response would be that the more complex the function of compliance, the more financial resources will have to be devoted to its function.
Preparing a business for sale and improving Business valuation is one of the areas in which a competent Mergers & Acquisitions advisor can make a huge difference. Businesses typically spend an inordinate amount of time setting up and using accounting practices that reduce the owner’s tax liabilities. CPAs use various business ownership structures and techniques to defer/reduce the revenues or accelerate/inflate the expenses to help business reduce its tax burden. The unforeseen side effect of this exercise is that, to a potential acquirer, the profitability of the business may appear much smaller than what it really is. Here is where our advisor will help you maximize the reality of your business value.
It is important to remember that we need to keep a proper perspective and embrace the challenges that lay ahead. More than likely, there will also be stressful times. We can’t decide sometime on what is happening but we do have control on how we are going through it. Mergers can be difficult for some people. It is important to be realistic, to remain calm and focused and to prepare all involved for some bumps in the road. In time, most of us adjust. It is easier if integration is done thoughtfully and with effective communications with both the buyer’s and seller’s staff.
The level of exposure to compliance risks is significantly reduced in the SME to the extent that compliance management is under the control and supervision of the property and it is in excellent conditions to influence the management of the company, providing the ethical and compliance culture to its employees.
In any case, in order to reduce the levels of exposure to criminal risks, there is no other way than to implement an effective compliance manual (never a standard booklet), designate a compliance officer, and maintain adequate controls for the monitoring and supervision of Risk behaviors.
Henry Towers raising services include:
- Senior Debt
- Private Equity
- Expansion Capital
- Acquisition Capital
- Management Buyouts
The catalog of criminal types that can be committed by the employees of a business organization is very broad. A good part of these crimes can be committed by an employee without having a true conscience of incurring in a criminal offense. More than 25 crimes. The most common, would be:
- Crimes against privacy and computer raids. Art. 197.
- Punishable insolvencies. Art. 261 bis.
- Upgrades of goods. Art. 261 bis.
- Own and improper scams. Art. 251 bis.
- Computer damage. Art. 264
- Discovery and disclosure of secrets. Art. 278 to 280.
- Crimes against consumers. Art. 288.
- Misleading advertising. Art. 282.
- Fraudulent billing. Art. 283.
- Insider trading. Art. 284.3 and 285.
- Crimes against the Public Treasury. Art. 310. Bis
- Crimes against Social Security. Art. 310 bis.
- Crimes on land use. Art. 319.
- Crimes against natural resources and the environment. Art. 327 and 328.
- Crimes against health. Art. 361.
To apply for a NIE, the following is required:
- Completion of Form 790 for payment of the fee.
- Standard form/application (Form EX15).
- Full passport or travel document or, where applicable, valid registration certificate.
- A statement of the reasons for the application. Requests submitted in Spain by the representative appointed by the applicant are accepted. This person must provide:
A completed Form 790 for payment of the fee.
A standard form/application (Form EX15).
An up-to-date copy of all passport pages, certified by a Notary Public and apostilled or legalized, depending on the case.
Accreditation of the valid powers of attorney of the appointed representative.
- A statement of the reasons for the application. To apply for a NIF, the following is required:
A standard form/application (Form 036).
A photocopy of the applicant's identity card, passport and NIE.
A document proving the existence of the foreign legal entity, or an apostilled or authenticated "certificate of good standing", with a sworn translation into Spanish. This document may be the articles of incorporation in their country and the corporate by-laws registered in any official register in their country or certification by a Notary Public or a tax authority proving the existence of the company.
Applications filed in Spain by a representative designated by the company, must also provide, in addition to supporting documentation of the powers of the person, i.e., the power of attorney granted by the authorized representative of the non-resident entity, duly executed before a Notary Public with the apostille or corresponding legalization and sworn translation if applicable, which empower a person for the purpose of obtaining the NIF.
The only document needed to grant a power of attorney is the one stating the authority of the principal to grant the power of attorney. Specifically:
- If the principal is a natural person, a document proving their identity.
- If the principal is an administrator of a legal entity, the public deed stating his or her position.
- If the principal is an authorized representative of a legal entity, the public deed stating his or her powers.
The documents needed to incorporate a company in Spain are:
- Power of attorney.
The founders must give sufficient powers of attorney to the person who will set up the new company on their behalf in Spain.
- NIE or NIF for the foreign partners and administrators.
In those cases where a non-resident is to be appointed as an administrator, that person may grant powers of attorney to request their NIF or NIE (depending on whether the new administrator is a natural person or legal entity).
- Company name clearance certificate.
An application should be made to the Central Registry for a certificate confirming the desired name is available and can be used by the new company, and has been reserved.
The application for the company name clearance certificate may be performed electronically by a Notary Public.
Although the certificate is valid for three (3) months and must be renewed if the new company is not constituted within that period, no other person may reserve that name during an additional period of three (3) months, meaning the name is effectively reserved for a total of six (6) months.
- Bank certificate stating that a capital allocation has been made.
The amount payable in cash at the time the new company is incorporated is usually deposited or transferred to a bank account opened in Spain in the name of the new company, with the words “sociedad en formación” ("company in process of incorporation") added. To open this account, the bank will request a document certifying that the procedures to incorporate the company are underway: this normally involves a copy of the clearance certificate for the name of the new company.
The receipt issued by the bank for the capital allocation deposited is included in the articles of incorporation.
- Documents to be submitted to the Spanish Notary Public.
In addition to the documents listed above, the following documents are required:
- The bylaws of the new company, with the minimum content required by Spanish law.
- The original legitimating identification documents of the persons setting up the company.
- A duly-completed foreign-investment declaration. Although merely informative, this document is mandatory and must be submitted to the Directorate General for Trade and Investment of the Ministry of Commerce within one month of the new company being incorporated. The Notary Public can take care of this if so requested.
- Beneficial ownership statement.
Notaries public must identify the natural persons (name, nationality and identification number) ultimately owning or controlling, directly or indirectly, more than 25% of the capital or voting rights of the legal persons involved, or that direct or indirectly exercise control over the management of such legal persons by other means. Companies listed on a regulated market in the European Union or other similar countries are accepted.
- NIF (Provisional Tax Identification Number) before the Spanish Tax Agency. Notaries public may request this NIF electronically.
- Settlement of Asset Transfer Tax and Stamp Duty. As documented by the settlement offices corresponding to the company's registered offices.
- Documentation to submit to the Companies Registry. The public deed of incorporation must be submitted. It may be submitted electronically by the Public Notary.
- The definitive NIF from the Spanish Tax Agency.
- Official books and ledgers legalized with the Companies Registry.
- Official declaration of start of activity before the Spanish Tax Agency, if applicable.
- Company Social Security registration, if applicable.
The ultimate aim of private equity investors is to create value. As such, they look for high quality management teams with a credible plan to grow their business. Private equity investors are long-term investors and work with the company’s management to improve the company’s performance and strategic direction by aligning incentives, improving business plans, making operational improvements and strengthening corporate governance. With this mentality to buy and help build, coupled with a disciplined approach to organizational governance, private equity investors display a nimbleness and adaptability that raises the value of their investment and ensures that value can be realized in the future.
A set of beliefs, values, norms and actions that demand a remarkable degree of harmony between respect for the law, moral convictions and cultural traditions.
Even if refund rules vary from country to country. The main types of recoverable expenses fall within the following categories:
- Hotel and Meals
- Car Rental & Fuel
- Taxis & Public Transportation
- Conferences and Tradeshows
- Professional Fees & Marketing
- Inter-Company (travel delegations, services, seminars)
- Import VAT, Logistics and Warranty Products
- Drop-shipping, Installations and Maintenance contracts
- Telecom and Network Services
- Research and Development
- TV and Motion Picture Production
Certainly this won’t happen to you with our service, but in case this might occur to you. You will be required to pay a sanction, plus fulfill the obligations with interests. At Henry Towers we can help you if you are in this situation to mediate with the statutory body and try to reduce, if not eliminate the sanction and the interest of your obligation.
We can be flexible to tailor our business valuation services to match your particular needs.
In principle, you can only issue one original of each invoice or substitute document. But it is allowed to make duplicates, which must include the expression “duplicate " that will have the same effectiveness as the original invoice or substitute document, in two cases:
When several recipients come together in the same delivery of goods or services. In this case, the portion of the taxable amount and of the amount passed on to each of them must be entered in the original and in each of the duplicates.
In the event of loss of the original for any reason.
We hope that with all this information you are clearer how to make an invoice.
For reach claim you will need to provide expense documentation in the form of original invoices and receipts together with the back-up expense reports if available or the credit card statements, and the filed form in local language.
Every project is different and will require different information, but we are going to ask for items such as financial statements, tax returns, operating agreements, articles of incorporation, information related to prior sales of interests in the business, etc.
Applicable laws require that in certain cases foreign natural persons or legal entities (who are not resident in Spain) doing business or entering into economic relationships with natural persons or legal entities who are resident in Spain must obtain a tax identification number. In the case of natural persons, a foreigner's identification number (NIE) and in the case of legal entities, a tax identification number (NIF).
There are a number of ways to value a business. We use the “Market” approach to estimate the “enterprise value”. As this approach is more art than science, it involves looking at several factors, both quantitative and qualitative, that will impact the value of your firm. The main factors affecting the value of your firm include:
- Length of time in business
- Type of service offerings
- Quality of infrastructure
- Corporate structure
- Client diversity and concentration
- Compliance and legal history
- Revenue run rate
- Revenue growth rate
- Rate of gross & net profits
- Sector appropriate billing rates
- MARKETS SERVED
- Type and size of market
- Client retention and references
- Growth industries
- HUMAN RESOURCES
- Strong management
- Well-trained sales and service staff
- Solid recruiting process
- High retention and low staff turnover
Private equity is finance provided in return for an equity stake in potentially high growth companies. However, instead of going to the stock market and selling shares to raise capital, private equity firms raise funds from institutional investors such as pension funds, insurance companies, endowments, and high net worth individuals. Private equity firms use these funds, along with borrowed money and their own commercial acumen, to help build and invest in companies that have the potential for high growth.
Invoices or substitute documents must be issued at the time of the operation. However, when the addressee of the transaction is an entrepreneur or professional acting as such, they must be issued within a period of one month counted from that moment. In any case, invoices or substitute documents must be issued before the 16th of the month following the tax settlement period in which the transactions were carried out.
The primary task of accountants, is to prepare and examine financial records. They make sure that records are accurate and that taxes are paid properly and on time. Accountants and auditors also perform overviews of the financial operations of a business in order to help it run efficiently. There are many intricate laws and systems to understand in order to be able to perform the job to a high standard. The role of a bookkeeper can vary tremendously. It is generally a bookkeeper’s job to maintain accurate financial records. In many cases the bookkeeper will take responsibility for day-to-day tasks for their company or for a client, such as handling accounts payable and accounts receivable – paying bills and generating invoices.
Venture capital refers to funds used to invest in companies in the seed (concept), start-up (within three years of the company’s establishment) and early stages of development. In turn, private equity denotes management buyouts and buy-ins.
In general venture capital funds invest in companies at an early stage in their development when they often have little track record of profitability and are cash-hungry. In contrast, private equity funds invest in more mature companies with the aim of reducing inefficiencies and driving business growth through often increased margins and/or new sources of revenue growth.
The Hague Apostille allows a public document from one country to be recognized as a valid document in another country, among countries that have signed The Hague Agreement.
The difference between the two accounts is that for non-residents the account is not taxable.
No company type is more appropriate than any another in theory. The choice of the most suitable company form for each business will depend, among other factors, on the strategy of the business and the activities in which it will be involved.
In general, company are usually set up by creating an S.A. or S.L. A branch may be advisable as there are fewer legal obligations on their operations. Representative offices are only used where the activity to be undertaken in Spain is merely secondary to, or coordination, collaboration or promotion of, the activity of the parent company.
You or your administrative staff just have to provide us:
- The invoices issued by your company (in case you don’t do accounting with us)
- Invoices received from suppliers and creditors.
- The bank statements and cash forms, with their corresponding receipts to identify collections and payments.
This documentation can be sent by messenger, in person, digitally via email or in a space created for this purpose in the cloud.
It is necessary to know the days worked and absences, as well as possible incidences such as periods of sickness. It is also necessary to know if there has been overtime or if it will receive some bonus or supplement, as well as if the worker has received some advance of the salary.
value-added tax (VAT) is a type of consumption tax that is placed on a product whenever value is added at a stage of production and at final sale. VAT is most often used in the European Union. The amount of VAT that the user pays is the cost of the product, less any of the costs of materials used in the product that have already been taxed. The VAT value can be different from one country to another. In other countries this is similar to the sales tax.
Invoices received must comply with:
- Invoice must appear, be numbered and put the data of the issuer (Name, address and CIF) and the data of who receives it (Company name, address and CIF) and appear disaggregated VAT. There are many providers that if you do not say anything they give you an invoice or a note that has no invoice effect.
- In order to be deductible in societies, it would be sufficient, in principle, for the complete data of the issuer to come. (Fras. Gasoline, restaurant), but being as correct as they appear detailed as I have put in the previous paragraph.
As for invoices issued must meet the same requirements as those received.
We ask you for a power of attorney so you don’t need to invest time on the process. Once we collect the information we don’t require any additional investment from your side.
The external lawyer of an SME tends to focus on the corporate form and its corporate structure, being habitual that its intervention has a reactive and punctual character.
It is on the occasion of the reform of the Criminal Code in the matter of criminal liability of commercial companies that the role of the lawyer becomes proactive and takes on a corporate dimension of great relevance. It is the specialist lawyer that you must trust to perform an analysis of the functional areas of the company and its various business units. It will be from this analysis that can help you effectively develop a regulatory body of compliance, through appropriate interaction with employees of your company.
It will be the lawyer who will value that each area of your company constitutes a small universe of legal responsibilities.
We can provide you service around:
- Valuation of companies and businesses
- Valuation of equity portfolios and private equity funds
- Intangible assets
- Complex financial instruments
- Purchase price allocation (PPA) and impairment testing
- “Fairness opinions” and independent expert reports on acquisitions, mergers, spin-offs, non-cash contributions, etc.
- Valuation reports as an independent expert in corporate disputes
- Valuations for tax and accounting purposes
- Valuation of IPOs and stock exchange exclusions
- Advisory on value creation
- Assistance in the preparation of merger and spin-off projects
- Preparation and review of business plans
- Preparation and revision of financial models
- Advisory on financial investment projects
- Assistance and preparation of IPOs and information memorándums.
There are many criteria to consider. Education and specific training in business valuation are critical, but given the complexity of many business valuation assignments, credentials in business valuation represent only threshold requirements. The business valuation firm should provide examples of their ability to analyze unique fact situations. The ability to produce well documented reports is critical to build up trust. Finally, clients should also determine whether the valuation firm is responsive to client needs.
Each invoice must include each and every one of the data listed below:
- Number and, if applicable, series. The numbering of the invoices within each series will be correlative. There may be separate series in the following cases: several establishments, operations of different nature or amending invoices. A new series is usually started for each year.
- The date of its issue.
- Name and surname, reason or full name of both the obligor to issue invoice and the recipient of the transactions.
- Tax identification number attributed by the Spanish Administration or, where applicable, by the other Member State of the European Community, with which the transaction was carried out by the party obliged to issue the invoice.
- Address, both of the provider to issue invoice and the recipient of the operations.
- Description of operations, with all the information necessary to determine the taxable amount of the tax, that is, the total amount of the consideration corresponding to them and their amount, including the unit price without tax of said operations, as well as any Discount or rebate that is not included in said unit price.
- The tax rate of VAT and the equivalence surcharge if applicable, as well as the percentage of withholding income tax also if it proceeds, as it happens with the professionals.
- The tax rate which, if applicable, needs to be recorded separately.
- The total amount to be paid.
- The date on which the transactions are documented or where, if appropriate, the advance payment has been received, provided that it is a different date than the date of issue of the invoice.
The Compliance officer should be knowledgeable about the content and scope of their duties. Failure to do so is to assume the risk of criminal liability for crimes committed within the company. The absence of this knowledge should be supplemented with the assistance and guidance of a compliance lawyer.
These are some of the most common types of contracts we find today in Spain, and as you can see, each of them includes different requirements and obligations. The best? Always the contract indefinite. To fill vacancies, the temporary contract, and the other types of contracts mentioned, are for "the first opportunity" or to acquire more knowledge.
Each company usually chooses one or the other based on its business policy and the profitability it derives from profits. Therefore, it is important that in the job interview expose all your doubts about the model of contract that will be assigned to you and the job possibilities offered by the company.
As you see, there is no single model and finding the system that best fits your projection as an employee, will allow you to find yourself satisfied in your new job.
When you run a business, or engage in any commercial activity – even as a sole proprietor – you need to keep records of various business transactions. The information your records must contain depends upon various factors. At a minimum, the financial records should be permanent, accurate and a complete record of your daily income and expenses. Your records have to give enough details to determine your entitlements and tax obligations. They also have to be supported by documents. These records include:
- Paper or electronic receipts
- Details of expenses and sales
- Payroll details
- Taxes collected and paid
Generally speaking, the most common types of company in the Spanish legal system are:
- Sociedad de Responsabilidad Limitada (Limited Liability Company);
- Sociedad Anónima (Public Limited Company);
- Sociedad Anónima Europea (European Public Limited Company);
- Sociedad Civil (Private Partnership);
- Sociedad Colectiva (General Partnership);
- Sociedad Comanditaria (Limited Partnership);
- Sociedad Comanditaria por acciones (Joint stock company);
- Cooperative company (Cooperative company).
However, from a practical standpoint, the most common types of companies in Spain are the Sociedad Anónima (S.A. - Public Limited Company) and Sociedad Limitada (S.L. - Limited Liability Company), because they limit the liability of the partners to the amount they have invested. Approximately 98% of Spanish companies are limited liability companies, while the remaining 2% are public limited companies, according to statistics from the Central Registry. All other company types are less frequent.
A compliance program is an instrument that avoids transferring the criminal responsibility of the crimes committed by the administrator or by the employees. But it is much more than a firewall. It is an instrument that provides the following advantages:
- The exemption or attenuation of criminal liability.
- Internal economies. That is, to avoid fines and penalties for the company.
- Crime prevention.
- Crime detection.
- Culture of legality to the organization.
The obligation to submit periodic self-assessments according to the tax and the tax obligor, can be:
- Quarterly, for individual entrepreneurs in objective or direct estimation, professionals, companies and entities without legal personality.
- Monthly, for individual entrepreneurs, professionals, companies and entities without legal personality with a volume of operations in excess of € 6,010,121.04 in 2016 (large companies) and for taxable persons registered in the monthly return register, which are taxed under the special regime of the group of entities and public administrations, including Social Security.
The main models and general deadlines for the presentation of self-assessments with bank direct payment are:
- Models 100, 151 and 714: until June 26.
- Model 102: until June 30.
- Models 111, 115, 117, 123, 124, 126, 128 and 216 (quarterly obligation): 1 to 15 April, July, October and January.
- Models 111, 115, 117, 123, 124, 126, 128, 216, 230 and 430 (monthly obligation): 1 to 15 of each month. The month of July of the model 430 until the 15 of September.
- Models 130, 131 and 303: 1 to 15 April, July and October and 1 to 25 January.
- Model 136: 1 to 15 April, July, October and January.
- Models 200 and 220: 1 to July 20 (tax periods that coincide with the calendar year).
- Models 202 and 222: 1 to April 15, October and December.
- Model 210: 1 to 15 April, July, October and January (except gains derived from real estate transfers). For imputed rents of urban properties from January 1 to December 23.
- Model 213: 1 to 25 January.
- Models 303 and 353 (monthly obligation): 1 to 15 of each month and January to 25.
- Models 410 and 411: 1 to 26 July.
- Model 560: 1 to 15 of the month following the end of the quarter (quarterly obligation) or the month (monthly obligation). 1 to 15 April of the following year (annual obligation).
- Models 561, 562 and 563: 1 to 15 of the second month following the end of the quarter (quarterly obligation) and 1 to 15 of the third month following the end of the month (monthly obligation).
- Models 564, 566 and 581: 1 to 15 of the month following the end of the month.
- Model 583: 1 to 15 May, September, November and February (quarterly obligation) 1 to 25 November (annual obligation).
- Model 587: May 1 to 15, September and January.
- Model 588: 1 to 25 November.
- Model 589: October 1 to 15 (installment payment) and April 1 to 15 (annual self-assessment).
- Models 595 and 582: 1 to 15 of the month following the end of the quarter.
As a client of Henry Towers you will not need to prepare and manage the paperwork neither the presentation, we provide this service and present taxes on behalf of our customers.
A NIE can be applied for before arrival at the consulate in the country of origin, or on arrival in Spain at the corresponding Immigration Office. When setting up a company, it is advisable to apply for a NIE at the start of the procedure, to prevent its processing holding up the process. A NIE can be applied for in person or through a representative. The representation must be granted sufficient powers of attorney, stating explicitly that the representative is authorized to apply for a NIE.
A NIF must be requested before: setting up a company in Spain; any delivery, provision or acquisition of goods or services; receiving money or making payments; and undertaking any business or professional activity.
There are very strict deadlines defined by each tax authority. We have made an extract for you:
- Businesses based in EU - The deadline for submission of claims is 30th September of the following year.
- Non-EU based businesses - The deadline for submission of claims is 30th June of the following year
- UK (non - EU claimants) - The filing deadline for VAT refund claims on expenses incurred in the United Kingdom between July 1 of each year and June 30 of the following year is December 31 of this year (this deadline is only applicable for companies located outside European Union countries).
As an entrepreneur or self-employed professional you are obliged to issue and deliver invoice, or other supporting documents, for the operations you carry out during your activity. Do not forget that you always have to keep a copy of the document you have delivered. That is, you must be registered in Hacienda (Tax Agency) to issue invoices.
You are also required to keep all invoices you receive from other business owners or professionals.
It is obligatory that in the delivery of goods and the provision of services emit and keep the invoices in which the operations of the VAT that entails your activity are collected (the obligation also extends to those that are not subject to the tax and subject but Exempt) and also if you take advantage of a special VAT regime.
However, in some special VAT regimes , in principle it is not necessary to issue invoices, giving rise to the following exceptions which essentially affect transactions with individuals:
Operations exempt from VAT.
Those made by employers or professionals in the special regime of the equivalence surcharge.
Those made by businessmen or professionals under a simplified VAT system, unless the determination of the accrued fees is made in response to the volume of income.
Those made by entrepreneurs or professionals in the special regime of agriculture, livestock and fishing.
You are always obliged to issue an invoice when the recipient is an entrepreneur or professional acting as such and when your client requires it for the exercise of any tax right.
Even so, in these regimes, transactions related to the transfer of real estate and fixed assets are usually subject to the obligation to issue an invoice. In these occasions it is recommended to verify the concrete case with an adviser.
- The period for the legalization of books is four months after the close of the fiscal year, ie if the year coincides with the calendar year, closed on December 31, 2016, the last day to legalize the books for the 2016 fiscal year will be On April 30, 2017 , being the annual periodicity of said legalization in electronic and electronic media.
- If the company had an economic period not coinciding with the calendar year, having closed its exercise, for example, on September 30, 2016, January 31, 2017 was the deadline to legalize the books electronically.
- Note: Regardless of the deadlines referred to in this section, indicate that at any time during the fiscal year, books of details of minutes with minutes of the current fiscal year may be legalized.
You can get a NIE:
- In Spain: in Delegations and Sub Delegations of the Government through its services and immigration offices where the procedure was started (i.e. where the services are provided, the company resides or is domiciled, etc.)
- Abroad: in the diplomatic mission or consular office in the country of residence abroad, where the reason for the request must be justified.
- However, a NIF can only be obtained through application to the tax authorities in Spain, although this request may be made electronically.
The bylaws are rules that govern the internal management of your corporation. To register or file a corporation you must prepare and file a document called the Articles of Incorporation and conform to any other registration requirements applicable. You might refer to Company and Branch formation for additional information on what is it required to setup a Company.
Spain has a large quantity of banking institutions, here is a list of the most reputable ones: La Caixa, Santander, BBVA, Bankinter.
The Tax Administration may verify that the transactions carried out between related persons or entities have been valued at their normal market value and will, if applicable, make any valuation adjustments that may be made in respect of transactions subject to this tax, the IRPF or the income tax. The income of non-residents that had not been valued at their normal market value, with the documentation provided by the taxpayer and the data and information available to him.
The related persons or entities must keep at the disposal of the Tax Administration the documentation that is established by regulation, except for the companies in which it is complied with:
The net amount of turnover in the tax period is less than 10 million euros.
The total amount of related transactions carried out by them during the year (including specific transactions) does not exceed € 100,000 of market value.
However, the exemption of the documentation obligation does not apply, in any case, to transactions with related persons or entities residing in a tax haven, except where they are resident in a Member State of the European Union and the taxpayer believes That the transactions are for valid economic reasons and that those persons or entities are engaged in economic activities.
Broadly and roughly speaking, limited liability companies are used:
- Because they require lower capital disbursements.
- There are fewer administrative formalities for their operations.
- They offer greater flexibility in agreements between partners.
Public limited companies are usually formed:
- If an activity is going to be undertaken that is reserved for public limited companies by law (banking, pharmaceuticals, pension fund management, insurance companies, etc.).
- If significant capital movements are anticipated.
- If a partner not involved in managing the company wants a particularly formal structure for carrying out corporate actions that can have a significant impact on their investment (e.g. mergers, transformations, dissolution, calling annual general meetings, capital reductions, non-monetary contributions, etc.)
It is strongly recommended that a legal adviser should be consulted before making any decision, whatever the case.
You can open the bank account as a resident or a non-resident. Residents are those who at least fulfill on of the following:
- Live in Spain more than 183 days a year.
- Own a business in Spain.
- Have a spouse or minor living in Spain.
We focus on giving legal advice to companies who need to defend their business and interest using the law.
We don't give legal advice about personal issues unless are related to the business.
Anyone can open a bank account in Spain, there are different types and status.
The vast majority of registered businesses, subject to VAT (or equivalent tax), are entitled to VAT refunds. However, the VAT refund rules vary significantly from country to country in terms of the rates/expense items eligible for refund etc. It is a complex legislation to deal with, although when managed by professional the process can seem very simple. If your business is based in the EU and VAT registered in your home country, you can qualify for a refund. Non-EU based organizations must be registered for business in their own country, to qualify for a refund. Some restrictions apply for specific sectors (public institutions, financial services) or for countries where there is no reciprocity agreement in place with the country of expenditure.
Natural persons and legal entities who are non-residents in Spain and are going to be involved in transactions with tax implications are required to hold a tax identification number (NIE/NIF) to be included in all self-assessments, tax returns, communications or documents they submit to the Spanish tax authorities. This is a unique and exclusive, sequential personal identification number. This personal number will act as their ID and must appear on all documents issued or processed.
What transactions have tax implications? The common business situations in which natural persons or legal entities who are foreigners in Spain are obliged to hold a Spanish NIF or NIE include: being partners or directors of Spanish companies; granting deeds of sale for property and related real estate interests; conducting any kind of economic transaction in Spanish territory (for example, opening a bank account); and filling in official forms required by the immigration office or Spanish Tax agency.
Any national that is outside the countries from the European Union you will be required to have a visa to visit the country, and a work permit if you want to work in Spain. For the nationals that are members of the EU they don’t need a visa neither a work permit, with a few exception such: Croatia (need a work permit until June 30, 2020).
The legalization of books will be mandatory for all entrepreneurs, whether natural or legal persons, obliged to keep accounts adjusted to the requirements of the Commercial Code. However, it will not apply to temporary unions of companies, communities of goods, associations and foundations (although in the latter case they must apply Order JUS / 221/2017, dated March 9, on legalization in electronic format of books Of foundations of state competence). It is recommended to contract a service to do your bookkeeping and presentation on your behalf.
In the Expat Explorer (https://www.expatexplorer.hsbc.com/), a study conducted by HSBC periodically, Spain is the best place in Europe for expats who wants to enjoy life. 81% learns Spanish and 72% enjoy being immerse in the Spanish culture. Spain is a country who is attracting talent from all over the world and companies are developing value added services such design and development in its wonderful climate and culture. The preferred cities for expats are Barcelona and Madrid, which also are the most concentrated business centers of the country.
The attraction of private equity investment to a company and to the management is the opportunity for managers to own a significant portion of their business. Aligned interests between the managers and the investors fosters the sense of ownership that is central to the concept of private equity investment. Besides the infusion of capital, companies also benefit from the experience and insight that fund managers bring to the board room.
A well prepared business valuation is a central element in many transactions, as well as reporting, compliance and litigation matters. The costs involved with the preparation of a well-documented business valuation provide benefits that exceed the outlay of funds. A qualified business appraiser should be able to explain the benefits of a business valuation based on the specific intended use of the valuation.
The periodicity depends on the documentation generated by the company and the need for accounting information to be necessary for the control of the company, as there are no complementary methods available. This periodicity can be fortnightly, monthly, bimonthly or quarterly.
The deadlines are approximately the first twelve days of the months of April, July and October and the first 24 days of the month of January. These deadlines are marked by the deadlines for filing tax returns. Depending on the specific needs of each company, that date is flexible in days.
Absolutely, we will develop such calendar at the beginning of our service, and keep it updated all year round including your business moves. We grant access to this critical information to you, although you are not requested to fulfill any of the scheduled duties.