|
Forming a Spanish company
If you intend to carry out any large-scale activity, you may wish to form a Spanish company, or a branch of a foreign company, in order to do business in Spain. You are permitted to do this as either a resident or a non-resident. If you have €60,000 to put up in capital, you can form a Spanish Sociedad AnOni,na, which is the equivalent of a British limited company (a plc), or an American corporation (an Inc.), where liability is limited to the amount of capital each investor has subscribed. These companies have “S.A.” after their names.
S.A. companies must now have their books audited yearly and register these audited accounts with the Mercantile Registry as public documents, available for inspection by any citizen. This means that you may consult the Mercantile Registry for information about any Spanish company with which you intend to do business. You can find out the names and addresses of the principal officers of the company and see its profits and losses for the previous year. Failure to file such an audited statement or to falsify any information it contains is an offence, punishable by fines.
Under the old system, which required very little capital for the formation of a company, hundreds of thousands of companies were constituted, under no obligation to publish their accounts. It was easy for an unscrupulous businessman to form a company, conceal its profits, and later disappear, owing money to his creditors, which they had no way of recovering. The present system is designed to correct these abuses.
You can also form in Spain a Sociedud Limitada, a simpler form of incorporation with a reduced number of shareholders and capital, or you can undertake a legal partnership or make a Spanish branch company, a sucursal, of a parent company already existing in your home country.
If you form a company, its Articles of Association must be signed and registered with a Spanish Notary and of course the Mercantile Registry. Formerly, one needed three shareholders and three directors to form a company, hut under ~he new legislation, a single person can incorporate himself.
If you form a company, you may be employed by it as a director, even if you own the company completely The company will be liable for Spain’s corporate tax of 35 per cent on its profits.
You will need the best legal advice you can get, both in your home country before you start your Spanish company and in Spain before you form the company, to make sure that you are getting the best tax and business breaks available to you when you transfer funds. There are many tax complications and opportunities when you set up a company, so study it carefully before you begin.
Such questions as whether you set up your company while you are still a non-resident of Spain and whether you liquidate your foreign holdings before or after you become a resident of Spain will become important considerations.
There is a maze of regulations and opportunities around foreign investment, and you will need a lawyer skilled in these matters. The foreign investment will be vetted by the Dirección General de Transacciones Exteriores, the general directorate of foreign transactions, better known as the DGTE, the authority which continues to keep a controlling eye on foreign exchange, even though it has fewer powers to deny money transfers.
You want to be sure that your Spanish company will be able to take its legal profits out of Spain, and also that it will have access to bank credit just like any Spanish company
Spain’s Ministerio de Econornta y Hacienda publishes several booklets in English that are “must” reading for anyone thinking of starting a business here. The series is called “A Guide to Business in Spain”. Among the titles are Foreign Investments, Forms of Business Organisations, and Labour Legislation. The Spanish consulate in your home country may be able to supply you with copies, or you can write directly to the Dirección General de Transacciones Exteriores, Calle Almagro 34, 28010 Madrid.
|
