Establishing a subsidiary in Spain is an exciting time for growing companies. However, the entire setup process can take between 6 to 8 weeks, potentially delaying operations and prompting prospective hires to seek employment opportunities elsewhere.
However, G-P offers an alternative. Instead of taking the conventional subsidiary route in Spain, we can expedite your entry — no new entities required — enabling you to begin operations in minutes instead of months.
How to establish a Spain subsidiary
Setting up a subsidiary in Spain starts with considering what type of entity you would like to incorporate. Spain has 4 main types of businesses. You will need to examine your business activities, registration requirements, minimum capital requirements, and your level of commitment to the country to decide which is the best option for your company.
The 4 business options include:
- Joint venture
- Branch office
- Representative office
- Corporation
The most common subsidiary structure is a Sociedad de responsabilidad limitada (S.L.), which is a form of corporation and similar to a private limited liability company. The second company type is called a Sociedad Anónima (S.A.), which is equivalent to a public limited liability company. An S.L. has greater organizational flexibility and lower capital requirements than an S.A.
Depending on the option you choose, Spain has 3 separate incorporation processes:
- Ordinary regime: Applicable for both types of entities.
- Simplified regime: Only applicable to limited liability companies that meet certain requirements relating to shareholders, share capital, and managing body.
- Super simplified regime: Applicable only to limited liability companies that meet certain requirements for shareholders, share capital, and bylaws.
The steps for each regime are similar, which include:
- Obtaining a certification of your proposed company name from the Mercantile Register
- Applying for a Provisional Tax Identification Number (N.I.F.)
- Opening a bank account in Spain
- Administering an anti-money laundering and terrorist financing declaration
- Executing a public deed before the Notary Public
- Registering your office at the Commercial Registry
- Obtaining a definitive N.I.F. once your company is registered
- Completing any other notification procedures
Spain’s subsidiary laws
If you decide to set up a Spain subsidiary as an S.L., you’ll need to keep several requirements in mind. Spain subsidiary laws require a minimum of EUR 3,000 as investment capital that you’ll need to pay in full at the time of incorporation. An S.L.’s shares are not freely transferable, and the company cannot issue bonds.
As far as management, an S.L. needs a minimum of 3 — but no more than 12 — directors. Spain subsidiary law does not have any nationality or residency restrictions. However, the country does have strict accounting and auditing demands. All companies must file their annual financial statements with the Mercantile Register, but some can file abbreviated financial statements if they fall within certain limits.
Benefits of establishing a Spain subsidiary
By setting up a subsidiary in Spain, you can officially conduct business in the country. If you incorporate as an S.L., you’ll receive additional benefits from operating as a limited liability company. This setup will protect the parent company from any losses, and it will allow your subsidiary to run with a degree of independence.
Other important considerations
Companies may need to spend time and money traveling back and forth to Spain to set up the subsidiary. Several other steps of the process can cost a significant amount of money in addition to investment capital requirements and other expenses, which could cause delays and budget constraints. Finally, you will need a strong understanding of Spain’s subsidiary laws to stay compliant.
Enter new markets with G-P — no new entities required.
Beat the competition and enter new markets in minutes, not months, with G-P. We’ve paired our industry-leading team of in-region HR and legal experts with our #1 Global Growth Platform™ to help you hire compliantly in 180+ countries, eliminating the need to set up local entities or subsidiaries.
Get in touch today to learn more about how we can streamline the global growth process.