Setting up an S.L. in SpainThe right structure – before you invest.
I guide you through setting up a Spanish S.L. – for an investment or a business activity in Spain. And I tell you openly when an S.L. is not worth it.
When an S.L. makes sense – and when it doesn't
A Spanish S.L. (Sociedad Limitada) is a limited liability company – comparable to a private limited company (Ltd) or a German GmbH. It makes sense above all if you are doing business in Spain, letting property on a commercial basis, or if several investors are involved in a project.
For a holiday home that you mainly use yourself, however, it is often the more expensive solution: the company needs bookkeeping, annual accounts and ongoing tax returns – even in years without income. I tell you openly which model suits your case and, where necessary, coordinate with your tax adviser.
Setting up your S.L., step by step
- 01
Reserve the company name
The name of your S.L. is applied for at the Central Commercial Register in Madrid. An NIE is required for the application. I check in advance whether your preferred name is available and apply for the certificate.
- 02
Bank account and share capital
The company needs a Spanish bank account into which you pay the share capital. We present the bank certificate confirming this to the notary.
- 03
Articles of association and incorporation before a notary
I draft the articles of association to suit your plans. The incorporation is notarised before the notary – with me at your side or under a power of attorney.
- 04
Tax number and Commercial Register
After the notary appointment, the tax number is applied for and the company is entered in the Commercial Register. Your S.L. is then fully operational.
What I take care of – and what the notary does
Me, as your lawyer
- Advice on whether an S.L. makes sense for your plans at all
- Drafting the articles of association
- Reserving the company name and preparing all documents
- Coordination with the bank, the notary and your tax adviser
- Applications for the tax number and registration in the Commercial Register
The notary
- Verifying identity, powers of attorney and the bank certificate
- Notarising the incorporation and the articles of association
- The notary is bound to neutrality – and does not advise you on your structure
Sometimes yes, often no. An S.L. can make sense if the property is used for business purposes or several investors are involved. But it entails ongoing costs for bookkeeping and tax returns, and private use by the shareholders can have tax consequences. I tell you openly when an S.L. is worthwhile – and, where necessary, coordinate with your tax adviser.
In four steps: reserving the company name (which requires an NIE), bank account and share capital, incorporation before a notary, and the tax number and registration in the Commercial Register. How long it takes depends mainly on the NIE, the bank and the registries – usually a few weeks. I coordinate the steps so that nothing stalls.
Yes. An S.L. can have a single shareholder, and you can be its director yourself – you do not need to live in Spain, but you do need an NIE. Where the company is actually managed from can have tax consequences; where necessary, I coordinate this with your tax adviser.
Since 2022, the law requires just €1. As long as the capital is below €3,000, at least 20% of profits must go into the legal reserve, and if the assets are insufficient on liquidation, the shareholders are personally liable up to the difference to €3,000. I will discuss with you what level of capital makes sense for your plans.
First the structure, then the signature.
Tell me what you are planning in Spain. I will tell you whether an S.L. is the right form for it.
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