Commercial Law

As a self-employed person you are liable with all your personal assets and pay personal income tax. A limited company (SL) limits liability to the capital contributed and pays corporate tax; it is the usual form for SMEs. A public limited company (SA) is for larger projects or many shareholders. The choice depends on expected income, partners and growth plans.

Yes, without having to live in Spain. Individual partners and directors need an NIE, and foreign companies a Spanish NIF. The investment must then be declared to the Foreign Investment Register (form D-1A). In certain strategic sectors, investments by non-Europeans reaching 10% or more of the capital may require prior authorisation.

Since Law 18/2022 (“Crea y Crece”), an SL can be set up with €1 of capital. Until capital reaches €3,000, the company must allocate at least 20% of its profits to the legal reserve, and partners may be liable if the company is wound up without sufficient assets. A public limited company (SA) requires €60,000, at least a quarter of which must be paid up.

With the documents ready, an SL can be incorporated and registered in a few days; with online processing (CIRCE) and standard articles, even faster. With foreign partners, allow time to obtain their NIEs and legalise powers of attorney and foreign documents.

Keeping accounts and statutory books, approving the annual accounts at a general meeting within six months of the year end and filing them with the Commercial Registry, filing corporate tax and periodic VAT and withholding returns, and keeping beneficial ownership information up to date. The general corporate tax rate is 25%, and newly created companies pay 15% in their first two profitable years.

Registration gives the exclusive right to use the mark and to stop others from using it. It can be registered with the Spanish Patent and Trademark Office (OEPM), valid in Spain, or with the EU Intellectual Property Office (EUIPO), valid in all member states. Either way it lasts ten years and can be renewed indefinitely. Before filing, it is worth checking for similar earlier marks.

It is a private agreement between partners covering what the articles of association do not, or what should not be made public: how key decisions are made, what happens if a partner wants to leave, drag-along and tag-along rights, non-compete and how deadlocks are resolved. It prevents most of the conflicts that paralyse companies.

If losses reduce net equity below half of the share capital, directors must call a general meeting within two months to dissolve the company or restore the balance; otherwise they can become personally liable for later debts. And if the company cannot pay its debts, insolvency must be filed within two months of becoming aware of it. There are earlier tools, such as negotiation with creditors and restructuring plans, that are best used in time.