Spain has become a strategic destination for international companies seeking to expand into Europe from a stable legal environment with access to key markets.
For this process to be truly effective, proper planning from the outset is essential.
In this guide, we clearly and systematically review the main stages involved in setting up a subsidiary in Spain, avoiding common pitfalls and optimizing implementation timelines.
Key First Steps: name certificate
The process begins with choosing the company name. The Spanish Commercial Registry allows up to five alternative names to be submitted, from which it validates a single option.
Once availability has been confirmed, the Commercial Registry issues the corresponding company name certificate, confirming that the selected name is valid and duly reserved.
Tax Identification in Spain: NIE and NIF
Correct tax identification of shareholders and directors is one of the most critical aspects of the process.
In the case of foreign individuals, obtaining a NIE (Foreigner Identification Number) is mandatory in order to act as a shareholder or director. Non-resident individuals must also register with the Spanish Tax Agency to obtain a NIF (Tax Identification Number), which is required for any tax or administrative procedure. In practice, appointment availability is limited, which can lead to delays.
When the shareholder is a foreign company, it must apply for a NIF as a non-resident entity with the Spanish Tax Agency. This is a technical procedure that requires proper documentation and a precise understanding of the applicable regulations.
Choosing the Legal Form of the Subsidiary, Powers of Attorney, and Registered Office
The most commonly used corporate forms by foreign investors to incorporate a subsidiary with its own legal personality are the Private Limited Company (S.L.) and the Public Limited Company (S.A.).
The S.L. is the most common structure for subsidiaries due to its flexibility, lower minimum share capital requirement, and simplified management, making it particularly suitable for SMEs or projects with lower operational complexity. By contrast, the S.A. may be preferable for larger companies with significant growth plans or those seeking to attract investment through the freer issuance and transfer of shares.
When shareholders or directors are unable to travel to Spain, it is common to grant a notarial power of attorney to a third party to act on behalf of the company. In addition, the registered office must be defined, as it will be the subsidiary’s legal and administrative headquarters.
Share Capital Contribution
Before formal incorporation, the share capital contribution must be arranged. The minimum share capital required to incorporate a company in Spain is €3,000.
To this end, a provisional bank account is opened in the name of the company in formation, into which the required capital is deposited. The bank issues a capital contribution certificate, which is an essential document for executing the notarial deed of incorporation. Once the company has been incorporated and the definitive bank account has been opened, the capital is transferred to the subsidiary’s operating account.
Incorporation Before a Notary and Registration with the Commercial Registry
With all documentation prepared (articles of association, company name certificate, and capital contribution certificate), the subsidiary is incorporated by means of a public deed executed before a notary.
Following execution, a provisional NIF is assigned and registration with the provincial Commercial Registry is initiated. This process typically takes approximately 15 days. Upon registration, the company acquires full legal personality.
Digital Certificates and Definitive Bank Account
Once the company has been registered, the directors must obtain their personal digital certificates, which allow them to carry out electronic procedures with public authorities. Subsequently, the company’s digital certificate is obtained, which is essential for filing tax returns, receiving official notifications, and operating with the Spanish Tax Agency and the Social Security authorities.
At this stage, the definitive bank account is also opened.
Tax Registration, Definitive NIF, and Foreign Investment Declaration
For the subsidiary to operate fully, it must complete tax registration (census registration with the Spanish Tax Agency) by filing Form 036, as well as apply for the company’s definitive NIF.
Where the incorporation of the subsidiary involves foreign investment, this must be mandatorily declared through Form D1-A, in accordance with Spanish foreign investment control regulations.
Additional Formalities and Human Resources
Depending on the subsidiary’s activity, additional procedures may be required. To operate with companies in other EU countries without charging VAT, registration in the Register of Intra-Community Operators (ROI) is required, a process that involves demonstrating a genuine operational presence in Spain.
When the company decides to hire employees, it must register the workplace and enroll as an employer with the Spanish Social Security system. These procedures are typically carried out when the company actually needs to do so.
Conclusion
Setting up a subsidiary in Spain is a process that requires planning, coordination, and a thorough understanding of the local regulatory framework. Although many of the procedures are regulated, their proper execution makes the difference between a smooth market entry and a process plagued by delays and unnecessary risks.
Having the support of Biznelp enables foreign companies to approach each stage of the onboarding process with confidence and efficiency, ensuring regulatory compliance from day one and laying the foundations for solid and sustainable growth in the Spanish and European markets.