Starting a Business in Spain

 Procedure 1. Obtain a certification of uniqueness of proposed company name (certificación negativa de la denominación social) from the Mercantile Register Time to complete: 3-4 days Cost to complete: EUR 7 to 14 Comment: The certification of uniqueness of the corporate name can be obtained directly from the Central Mercantile Registry by filing the corresponding form. Alternatively, it can be requested by mail or via the Internet. The Central Mercantile Registry must mail the certification C.O.D. to the address indicated in the request.
Once the Registry issues the certification, , the requested corporate name will be reserved for a maximum of 15 months from the certification’s date of issuance.
Each certification of uniqueness of the corporate name is valid for 2 months from its date of issuance. Should the company not be incorporated within this term, a certificate renewal must be requested. The certification must be attached to the public deed of incorporation. Procedure 2. Open a bank account for the company; deposit capital in the bank and obtain a deposit certificate Time to complete: 1 day Cost to complete: no charge Comment: Procedure 3. Grant a public deed of incorporation before a notary public Time to complete: 1 day Cost to complete: approximately €500, depends on the amount of the share capital and complexity of the operation. Comment: The public deed of incorporation must include (a) the identity of the company shareholders; (b) their will to incorporate the company; (c) the disbursement made by each of shareholder and the number of shares subscribed to by each; (d) the company bylaws; (e) the type of administrative body that will manage the company; and (f) the identity of its administrators or directors.

According to Law 36/2006 (November 29, 2006) and the corresponding interpretation of the General Board of Registries and Notaries, the public deed of incorporation must also include a fiscal identification number for each shareholder and for each shareholder representative and director.
The certificate of uniqueness of the corporate name and the bank-issued certification must be attached to the public deed of incorporation.

According to Law 24/2005 (November 18, 2005), a notary public can send the incorporation documents to the Commercial Registry electronically. However, the electronic systems to send the public deed of incorporation to the Commercial Registry have not yet been implemented. Procedure 4. Submit Declaración Censal de Inicio de Actividad and obtain the Tax Identification Code (Codigo de Identificacion Fiscal, CIF) from the Delegación Provincial de la Agencia Estatal de la Administración Tributaria Time to complete: 1 day Cost to complete: no charge Comment: As a general rule, the statement on commencement of business activities (Declaración Censal de Inicio de Actividad) must be filed and the tax identification number must be obtained before the company starts business activities. A copy of the public deed of incorporation must be filed with the Delegación Provincial de la Agencia Estatal de la Administración Tributaria with the corresponding form. Through the same procedure, the company must also register for VAT. The tax identification number is a prerequisite for registering the public deed of incorporation with the Mercantile Registry and for paying the Asset Transfer Tax and Legal Document Act Tax (Impuesto de Transmisiones Patrimoniales y Actos Jurídicos Documentados). Form 036 may be filed in person with the Delegación Provincial de la Agencia Estatal de la Administración Tributaria or by registered mail, along with the following documents: (a) the original and a copy of the public deed of incorporation; (b) original or copy of identity documents (such as DNI or NIE for a foreign individual or legal entity) of the shareholders; and (c) original of an identity document (such as DNI or NIE. for a foreign individual or legal entity) of the representative of the company. Procedure 5. Pay the Asset Transfer Tax and Legal Documented Act Tax (“Impuesto de Transmisiones Patrimoniales y Actos Jurídicos Documentados”) to the local tax authority Time to complete: 1 day Cost to complete: 1% capital Comment: The tax must be paid within 30 business days of the date on which the public deed of incorporation was granted. The company must fill in the corresponding form and file it with the local tax authorities, along with a copy of the public deed of incorporation and a copy of the tax identification number. Payment of the asset transfer and legal document act tax is a prerequisite for the registration of the public deed of incorporation of the company with the Mercantile Registry. Procedure 6. File the public deed of incorporation of the company for its registration with the Mercantile Registry. Time to complete: 15 days Cost to complete: EUR 164 Comment: The registration costs are based on variables such as the amount of the company share capital, the number of shareholders, and the type of administrative body. For example, for a company with share capital EUR 219,760 with five shareholders and five members of the board of directors, the registration fee would be about EUR 159.

Fee schedule for registration:
- If company share capital does not exceed EUR 3,005.06: fee is EUR6.01.
- EUR 3,005.06 to EUR 30,050.61: 0.10%.
- EUR 30,050.61 to EUR 90,151.82: 0.08%.
- EUR 90,151.82 to EUR 240,404.84: 0.06%.
- EUR 240,404.84 to EUR 601,012.10: 0.038%.
- EUR 601,012.10 to EUR 1,202,024.21: 0.02%.
- EUR 1,202,024.21 to EUR 6,010,121.04: 0.009%.
- Over EUR 6,010,121.04: 0.005%.
In any case, the regulated applicable global tariff will not exceed EUR 2,181.67.

The company public deed of incorporation must be filed with the Mercantile Registry of the place where the company has its corporate address within 2 months of the date it was granted. For the public deed to be registered, it is necessary that the Asset Transfer and the Legal Documented Acts Tax has been paid and the tax identification number obtained.

Once the public deed of incorporation has been registered, the company incorporation will be published in the Official Journal of the Mercantile Registry. Upon registration, the company acquires the status of a legal entity.

According to Law 24/2005 (November 18, 2005), registration must be completed within 15 days. The law states that all communication between notaries and the registry should be electronic (with electronic notarial signature). If registration does not take place within the stated time, the registration fees are reduced by 30%. Procedure 7. Legalize company books Time to complete: 15 days Cost to complete: EUR 90 Comment: A limited liability company must legalize (a) the corporate books, such as the book register of members and the minutes book; (b) the accounting books, such as the inventory and accounts book; and (c) the register books for VAT. Only corporate and accounting books must be legalized. Legalization is done by the Mercantile Registry. The request for legalization must be done at the Commercial Registry by filing the appropriate form in person or electronically. A certificate of electronic signature, required for online applications, may be obtained at www.registradores.org/scr/agenda, which takes about 2 days and costs EUR 69.60 plus VAT.

The cost for purchasing the books and legalizing them is about EUR 90. Procedure 8. Obtain a municipal license to open business premises (Licencia Municipal de Apertura) at the county/town council (Departamento de Urbanismo del Ayuntamiento) Time to complete: 15 days - 3 months, simultaneous with procedure 6 Cost to complete: EUR 350 Comment: The time and cost to obtain the municipal license to open a business premises (licencia municipal de aperture) depends on the type of license needed and on the company’s business activities. Each type of license has specific requirements. Different areas or districts of the city may have different requirements to obtain a license (certain activities may be permitted in one area but not in another). Proper company registration in the Mercantile Registry is not necessary to apply for the municipal license. The presentation of the company’s deed of incorporation is sufficient. However, the municipal license may be applied for but not granted if the registration step is not fulfilled.

Under the Order of the Municipality of Madrid of December 23, 2004, the process to obtain the license for the commencement of activities has been simplified. The municipality sets a statutory time limit of 15 days, counted from the application, to issue the license. However, in reality, pursuant to technical conditions set out in municipality order, this quick procedure may be extended by another month, depending on the exact conditions of the company office. Procedure 9. File for social security and affiliate all workers with the local general treasury of social security (Tesoreria General de la Seguridad Social) Time to complete: 1 day (simultaneous with previous procedure) Cost to complete: no charge Comment: Upon registration of the company with Social Security, a state supervisory number is issued and assigned to the company. The required documents are (a) the corresponding form; (b) a copy of the public deed of incorporation; (c) a photocopy of the applicant’s national identity document or power of attorney; and (d) the company tax identification number. Registration of the company and affiliation of all the workers must be made before starting any business activities.

In addition to the registration of the company, registration of each employee with the Spanish Social Security System is required by submitting the following documentation upon hire: (a) corresponding form (signed by both the company and the employee); (b) powers of attorney of the company representative; (c) a copy of the employee's national identity document (such as DNI, NIE, or passport); and (c) a copy of the company representative's national identity card. Procedure 10. Notify the Delegación Provincial de la Consejería de Trabajo e Industria Time to complete: 1 day Cost to complete: no charge Comment: The company must keep a visits book (libro de visitas) at all times. Information that must be noted includes the details of the company and the work place and a description of its business activity.

The corresponding autonomous community must be notified within the first 30 days of the start of activities and the opening of the workplace. Every autonomous community has its own form. Some require that work injury and safety documentation (corresponding to the specific business or workplace in question) be filed along with the forms. Other forms and documents might be needed depending on the workplace activities. The company must keep the visits books legalized by, and at the disposal of, the Labor and Social Security Inspectorate