Limited Liability Company (SL)
Sociedad Limitada
Company formation in Spain
The SL is best suited for: Freelancers and consultants wanting a formal Spanish entity, Digital nomads using the Beckham Law tax regime, Small and medium enterprises targeting the Spanish or Latin American market, Tech startups leveraging Barcelona and Madrid ecosystems, Foreign founders establishing an EU operating base. The SL pays Impuesto sobre Sociedades (IS) at a standard rate of 25%. Newly created companies benefit from a reduced rate of 15% for the first tax period in which they generate a positive tax base and the following period. Micro-enterprises with turnover under โฌ1 million may benefit from additional incentives. Spain applies a participation exemption on dividends and capital gains from qualifying subsidiaries (95% exemption, subject to conditions including a minimum 5% holding for at least one year). VAT (IVA) is charged at the standard rate of 21%, with reduced rates of 10% and 4% for certain goods and services. Municipal taxes such as the IAE (Impuesto sobre Actividades Economicas) may apply for companies with turnover exceeding โฌ1 million.
- Freelancers and consultants wanting a formal Spanish entity
- Digital nomads using the Beckham Law tax regime
- Small and medium enterprises targeting the Spanish or Latin American market
- Tech startups leveraging Barcelona and Madrid ecosystems
- Foreign founders establishing an EU operating base
Key Facts
Step-by-Step Formation Process
Obtain an NIE (foreigner identification number)
Every non-Spanish founder and director needs an NIE (Numero de Identidad de Extranjero). This can be obtained at a Spanish consulate abroad or at a police station in Spain. EU citizens can apply directly; non-EU citizens may need a visa appointment.
Reserve the company name (Certificacion Negativa de Denominacion)
Apply to the Registro Mercantil Central for a negative name certificate confirming the proposed company name is not already in use. Submit up to five name options ranked by preference.
Open a bank account and deposit share capital
Open a provisional bank account at a Spanish bank and deposit the minimum โฌ3,000 share capital. The bank will issue a certificate of deposit (certificado de ingreso) required for the notarial deed.
Draft articles of association and execute the public deed
Prepare the articles of association (estatutos sociales) and sign the public deed of incorporation (escritura publica de constitucion) before a Spanish notary. All founders must appear in person or appoint a representative via power of attorney.
Obtain a provisional CIF (tax identification number)
Apply to the Agencia Tributaria (AEAT) for a provisional CIF (Codigo de Identificacion Fiscal) using form 036 or 037. The provisional CIF is valid for six months while the company completes registration.
Register with the Commercial Registry (Registro Mercantil)
File the public deed with the provincial Registro Mercantil where the company has its registered office. Once registered, the company has full legal personality and the CIF becomes definitive.
Required Documents
- NIE (foreigner identification number) for all founders and directors
- Passport or national ID of all founders and directors
- Negative name certificate (Certificacion Negativa de Denominacion)
- Bank certificate confirming capital deposit of โฌ3,000
- Public deed of incorporation (escritura publica)
- Articles of association (estatutos sociales)
- Proof of registered office address in Spain
- Form 036/037 for tax registration
Cost Overview
Tax Treatment
The SL pays Impuesto sobre Sociedades (IS) at a standard rate of 25%. Newly created companies benefit from a reduced rate of 15% for the first tax period in which they generate a positive tax base and the following period. Micro-enterprises with turnover under โฌ1 million may benefit from additional incentives. Spain applies a participation exemption on dividends and capital gains from qualifying subsidiaries (95% exemption, subject to conditions including a minimum 5% holding for at least one year). VAT (IVA) is charged at the standard rate of 21%, with reduced rates of 10% and 4% for certain goods and services. Municipal taxes such as the IAE (Impuesto sobre Actividades Economicas) may apply for companies with turnover exceeding โฌ1 million.
Pros & Cons
- Full EU market access with Eurozone membership and large domestic market
- Beckham Law allows qualifying expats to pay a flat 24% personal income tax for up to six years
- Digital nomad visa introduced in 2023 provides a clear residency path for remote workers
- Strong gateway to Latin American markets due to language, cultural, and trade ties
- Growing tech hubs in Barcelona and Madrid with deep startup ecosystems
- Relatively low minimum capital of โฌ3,000 compared to many EU peers
- Extensive double tax treaty network (96+ treaties)
- Lower cost of living than France, Germany, or the UK in most cities
- The NIE process for non-EU founders can take several weeks and requires patience
- Notarial deed is mandatory โ no fully online incorporation option
- Social security contributions for self-employed directors (autonomo) are mandatory and significant
- Spanish bureaucracy is notoriously slow โ government offices operate on limited hours
- Standard corporate tax rate of 25% is above the EU average
- Annual accounts must be filed with the Registro Mercantil (public disclosure)
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Get StartedThis content is educational and does not constitute legal or tax advice. Always consult a qualified professional for your specific situation. Data last verified March 2026.