Advice for starting a business
Spanish income tax return
It doesn’t matter whether you are starting a brand new venture in Spain or are planning to extend your existing business into the Spanish market. There are some important issues that need to be considered. If these are not given the right degree of forethought, then they could cause a whole host of complications for you and your business later down the line.
- Who owns the business and where they live can have significant tax implications;
- Whether the business is financed by money from the European Union or Spain can generate a huge headache;
- How the business is set up can make the difference between heartache and success.
Setting up an S.A. or an S.L.Are you considering setting up a business as an S.A. or an S.L.?
Prior to starting any formalities, the articles of association must be drafted. These rules will be the ones that govern the internal legal relationships of the company and although the content is defined by the regulatory standards corresponding to the type of the company, agreements not contrary to the law or special conditions may be included at the discretion of the founding partners.
At this point, the person concerned must choose between two possible ways of setting up the companies: online or the traditional way.
Which are the steps to take prior to setting up the Company? Let us tell you.
Certificate of availability of company nameAfter completing the application form and listing up to five possible names, in order of preference, the Central Companies Register issues a certificate to prove that no other company is acting under the same name. This certificate is issued in the name of the founding partner(s).
It should be noted that the certificate is valid for 3 months (art. 414 of the RRM). Therefore, the subsequent procedures should not be delayed for too long, otherwise, you will have to start again. Once the certificate expires, you can apply for a new one with the same name, attaching the expired certificate to the application.
Application for a provisional NIF (tax identification number)
The application is made by submitting the 036 model (tax register declaration) to the AEAT administration office of the fiscal residence. In addition, the following documents are required:
An agreement of wills in which the grantors express their willingness to set up the company or if applicable the deed of the constitution.Copy of the ID card or NIE of the person signing the tax declaration.
Original and copy of the document which accredits the capacity to represent the person signing the tax declaration (this will not be required if the signatory appears as a representative in the deed of the constitution or in the statutes).
The number you will be issued is valid for six months or until the permanent tax identification card is obtained.
Bank certificate of the deposit of share capitalThe person concerned, together with the provisional NIF, the certificate issued by the Central Companies Register confirming the name and the deed of the constitution, must open a bank account in the Company’s name, to deposit the share capital.
If the company is to be set up as SA, the share capital amounts to 60.000 euros, but 25% will be sufficient at this stage. If we are looking at a future SL, it could be set up with a minimum capital of 3.000 euros, being subject to the special regime of limited companies in a successive formation scheme – in this case, if the company is dissolved and assets were insufficient, administrators and partners will be liable with their personal assets up to the legal minimum limit (3.000 euros).
The certificate isn’t required if, in the granting of the deed of the constitution, the partners state that all of them are responsible for the contribution made.
Execution of the public deed of constitutionPrior to starting business activities, the interested parties must go to the Notary to sign the constitution of the company and approve its articles of association. The following documents are required on the day:
- The articles of association
- Provisional NIF
- Certificate of the company name
- Bank certificate with proof of the minimum start-up capital
- ID Card/N.I.E/ Passport of the partners
- Once this has been completed, the company has been formed and will be able to start operating.
- Once the deed of the constitution has been signed, what do I do?
Self-assessment of the transfer tax and stamp duty.Within 30 working days of the granting of the public deed of the constitution, the person concerned will go to the competent tax office in order to settle the 600 model.
That said, it must be remembered that since December 2010, the constitution ceremony is exempt from payment of the ITPAJD. Despite this, in certain autonomous communities, it is necessary to file a tax return in order to prove the exemption.
Registration in the commercial registerThe company must register in the RM of the province where the office is located, within two months from the granting of the deed, providing the following documents:
- Photocopy of provisional NIF.
- The original deed of the constitution.
- Paid 600 model.
- Provision of funds
Application of the permanent NIF
The application of the permanent NIF has to be submitted at the AEAT administration office of the fiscal residence, providing the following documents:
- 036 model (declaration of amendment).
- Copy of ID Card of the person signing the 036 model.
- Original and copy of the document which accredits the capacity to represent the person signing the declaration.
- Original and copy of the deed of the constitution.
Once the above procedures have been completed, the founding partners will then proceed to register the Company in the IAE (the documents required depend on whether or not it is exempt from tax), to legalise the compulsory bookkeeping (online presentation to the RM of the registered office) and after this, to register the company in the social security and the affiliation of its workers. Lastly, there is the communication of the opening of the work centre to the TGSS and the corresponding unit of the autonomous community which should not be forgotten.
If you need assistance on setting up a company and dealing with your accounts, please do not hesitate to contact us today.
If you are thinking about opening a business in Spain or are about to sign on the dotted line, please contact the team at Pellicer& Heredia and see what options are available to you. For more information and free advice please call us.
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