A Spanish SL is actually a limited liability company or sociedad limitada. This represents the most popular type of business in Spain, for both local and foreign investors. The limited liability company is characterized by a high degree of flexibility, considering that the shareholders are allowed to establish their own rules inside the company. A Spanish SL usually is used for small and medium-sized companies and our team of specialists in company formation in Spain can advise on the registration of this business form.
| Quick Facts | |
|---|---|
| Minimum share capital | EUR 3,000 |
|
Minimum number of shareholders |
1 |
|
Number of directors |
1 |
| Mandatory residency requirements for setting up a Spanish SL company | Not applicable |
| Local director required (Yes/No) |
No |
| Time frame for setting up an SL in Spain |
Approximately 2 weeks |
| Corporate tax rate in Spain |
Generally 25% |
| Dividend tax rate |
19% withholding tax on dividend payments – Exceptions can apply. |
| VAT rate in Spain |
21% standard rate, with reduced rates of 10%, 5%, and 4% |
| Number of double taxation treaties (approx. ) | More than 100 |
| Annual meeting required |
A general shareholder’s meeting once a year |
| Accounting and filing requirements |
Companies prepare and file annual financial statements. |
| Foreign-ownership allowed |
Yes |
| Tax exemptions or incentives for setting up an SL in Spain |
Research and development incentives, a technological innovation tax credit, a patent box regime, etc. Conditions apply. |
| Additional licenses | Industry-specific ones |
Table of Contents
What is the minimum share capital for an SL in Spain in 2025?
At least EUR 3,000 has to be provided in order for the limited liability company to be established in Spain. In other countries, such as Italy, the minimum share capital for opening an LLC is much lower – EUR1, which may attract more foreign investors. Contributions can be made in a wide category of assets, such as cash, credit rights, real estate property, or any others. No expert’s evaluation is required. The capital is divided into shares, which are not free for transfer and investors can receive further information on the share capital from our team of representatives in company registration in Spain.
The presentation below provides information on the steps necessary for opening a Spanish SL:
How many shareholders are necessary for an SL in Spain?
The limited liability company in Spain can be registered with only one shareholder, having no limit with regard to the maximum number of shareholders. The shareholders of the Spanish SL are liable for the company’s debts only to the extent of their contribution to the company’s capital. It is also important to know that this business form allows registration with 100% foreign ownership.
What is the management structure for a Spanish SL?
A board of directors has to be appointed when starting an SL in Spain, which has to be comprised of a minimum of three and a maximum of twelve members. It is important to know that a director can be elected for an unlimited period during the general meeting of the shareholders. Another feature of the Spanish SL is given by the fact that the directors of the company can’t have the quality of shareholders and they are elected by the general meeting, which represents the highest managing body in the rank of a Spanish company.
More details on the Spanish SL (limited liability company) are available in the presentation below:
How can an SL in Spain be verified?
It is not necessary to keep accounting documentation according to Spanish law, but all records must be available on request if the Spanish authorities want to evaluate them. Financial statements must be completed annually and any changes regarding the organization of the company or its statutory documents have to be approved by the general meeting of the shareholders. Here, we recommend the services of our accountants in Spain who can tell you more about bookkeeping, payroll, audits, and annual financial statements, among other things.
An SL can be established quite fast in Spain, meanwhile, the VAT tax number is prepared and issued for the business. Some of the formalities of opening a company in Spain can be done online, through official platforms.
Are there other special requirements for a Spanish SL?
The limited liability company in Spain must have a name that mentions its structure, therefore the words “sociedad limitada” are mandatory for company registration in Spain. All companies must be registered with the Trade Register in Spain. At the same time, the company’s trading name can also contain the abbreviation “S.L.” or “S.R.L”.
During the incorporation procedure, the investors will need to draw the company’s articles of association, which will have to be notarized by a public notary in Spain; such documents will then have to be filed with the Commercial Registry in Spain. The registration procedure will also include the following:
- a trading name that has to be unique on the country’s territory;
- opening of a corporate bank account at a local bank in Spain, in which the company’s capital will be deposited;
- apply for a tax identification number, issued by the Tributary Agency;
- once the company will hire employees, it will be necessary to register them with the Social Security authorities;
- it is also compulsory to notify the local authorities once the company starts its operations (no later than 30 days from the first day of business activity).
How long does it take to register a Spanish SL?
The registration procedure for a Spanish SL can last depending on whether the investors are in the country or not. In the situation in which the investors are present in Spain during the incorporation of the company, the procedure can last approximately five days. If the investors are outside the Spanish territory, they may request legal representation from our team of specialists in company registration, who can represent them through the power of attorney. In this case, the registration can last up to two weeks.
Taxation of LLCs in Spain
If you want to incorporate a limited liability company in Spain, you should familiarize yourself with the taxes associated with this business structure:
- 25% is the standard corporate income tax for LLCs in Spain. This tax is calculated on net income, minus allowable deductions, as the case may be.
- There is also a 3% tax for LLCs that offer online advertising, and data transmission services or online intermediary services in Spain.
- The standard VAT rate in Spain is 21%. Companies that offer services and products that include VAT must file VAT returns on a quarterly basis.
- The withholding tax in Spain is 1.24% for dividends, royalties, and interests of SLs in Spain.
Our team of agents in company incorporation in Spain can help you register any kind of company, including an SL. Investors are invited to contact our specialists for in-depth assistance on the registration of a limited liability company in Spain, who may also offer tailored information on the business permits that are necessary when opening a company in this country. If you want to open a company in another country, such as Austria, we can put you in touch with our local partners.