5 September 2012
Once the appropriate business structure is selected, it is important to be aware of the practical requirements of setting up a business in Spain.
Registration of the Company Name
An application must be made for a Certificate of Uniqueness (Certificación Negativa de la Denominación Social), to prove that the name of the company is not already registered. This can be obtained from the Central Commerical Registry (Registro Mercantil Central) for a small fee.
Each certification of uniqueness of the corporate name is valid for 3 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.
Open a Bank Account
A bank account must be opened and the capital deposited. The amount that will need to be deposited will depend on the type of business that is to be set up
Obtain a Public Deed of Incorporation
This will need to be done before a notary. The public deed of incorporation will include the names of the company shareholders, the amount of shares held by each shareholder, the type of administrative body managing the company and the identity of the administrators or directors. The public deed of incorporation must also include the tax identification number of each shareholder as well as the bank deposit certificate and the Certificate of Uniqueness.
Apply for a CIF
An application must be made for a company tax identification code (Codigo de Identificacion Fiscal/CIF). This can be done at the Tax Office. A provisional number will be given straight away, and a permanent CIF number must be obtained within six months.
Pay Transfer Tax and Stamp Duty
The next step is to pay transfer tax and stamp duty (Impuesto de Transmisiones Patrimoniales y Actos Jurídicos Documentados) at the local Tax Office of the province in which the company is incorporated. The deed of incorporation and the CIF will need to be presented. The payment must be made within 30 days following the public deed of incorporation.
Submit a Formal Declaration to Start Activity
A formal declaration to start company activities (Declaración Censal de Inicio de Actividad) needs to be filed at the local Tax Office.
Register for Tax
The company will then need to be registered for tax at the local Tax Office. The Tax Office will need a description of the business activity, business starting date and a description of the business premises. Once the Tax Office has the relevant paperwork the company will be allocated an official activity code in order for the company to pay taxes.
Legalise Company Books
Under Spanish law, companies must keep accounts books, a minutes book and VAT (IVA) register books. These statutory books must be submitted to the Central Commercial Registry to be certified and stamped before they are used.
Obtain an Opening Licence
A licence to open business premises (Licencia Municipal de Apertura) must be obtained from the Town Hall. The cost of the licence depends on the intended business activities and there may be different requirements for the licence depending on the area or district in which the business is located. The only document necessary to present to the Town Hall is the public deed of incorporation.
There are many opportunities in Spain, but to make the most of them, you will almost certainly need specialist legal and accountancy advice. A general article of this nature cannot attempt to cover all the legal and financial aspects involved and you are therefore recommended always to seek professional advice.
We hope these articles will give you some guidance in the formation of a company or establishing a business on the Costa Blanca in which we wish you every success.
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