Any company that wants to engage in commercial activity in Spain must be registered with the Registro Mercantil Central, which is the national Spanish Company Register. But, as with most legal formalities, the process isn’t as simple as just filing an application with the local Spanish Company Register office. In fact, there are quite a few steps that must be completed before you will be able to register your business. This post will help explain the procedures for setting up a company and getting it on the Spanish Company Register.
What is the Spanish Company Register?
The purpose of the Spanish Company Register (Registro Mercantil) is to maintain a publicly accessible database with information about all companies operating in Spain. Anyone can search the registry for information about a company for a small per-search fee or a monthly fee for less restricted access (the Registro Mercantil does not receive funds from the government, which is why the fees must be charged).
A company appearing in the Spanish Company Register will have certain essential information about its business and offices listed, such as the type of business activity it performs, office location, names of the company’s directors, etc.
How to register a company in Spain
As we said, the process goes far beyond submitting an application. Because of number of steps and amount of paperwork involved, many foreign business owners choose to work through a legal representative by granting them power of attorney. In this way, they can focus on running their business while their lawyers take care of setting up the business and filing the necessary documentation for the Spanish Company Register.
The exact procedures for setting up a company will depend on the type of business you have and what legal form your company will take (the most common forms are S.L. and S.A., roughly equivalent to a Limited Liability Company and a Corporation). But, in general, the steps to create a company in Spain are those listed below.
Steps to create a company in Spain
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Arranging the necessary documents to grant power of attorney to your legal representative, if applicable. This is highly recommended because it helps expedite the process and prevents you from having to re-file certain documents due to errors made the first time.
- Applying for a NIE or NIF identification number. The “Número de Identidad de Extranjero” is a tax identification and federal ID number for foreign natural persons residing in Spain or doing business in Spain. On the other hand, the “Número de Identificación Fiscal” is a tax ID number for legal persons.
- Filing an application to reserve your company name and ensure that it is not already in use by someone else, which is done through the Company Name Clearance Certificate.
- Opening a Spanish bank account in order to deposit the required business capital (which will vary depending on the legal form of the company). You will need a certificate from the bank verifying that you have this capital available in your account.
- Getting notary certification on the company by-laws, articles of incorporation, etc.
- Applying for a new provisional tax ID number for your company if it does not already have one.
- Paying any applicable asset transfer taxes. Again, a lawyer is indispensable here to ensure you are tax compliant without paying more than is necessary.
- Only after these steps are completed can you present the necessary documents and file your application with the Spanish Company Register.
After your application is approved by the Registro Mercantil, there are still a few more steps that need to be completed to get your company up and running. The easiest and fastest (and usually the cheapest) way to get through all the procedures for setting up a company is to go through a legal representative.