Why Choosing the Right Company Type in Spain Matters
Before setting up a business in Spain, it’s essential to understand the available legal structures. Each type has its own:
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✅ Legal requirements
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💰 Tax obligations
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📈 Business potential
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📃 Liability implications
Whether you’re a solo entrepreneur or part of an international corporation, choosing the right legal form will influence your success in the Spanish market.
🔎 Overview: Main Types of Companies in Spain
Here are the most common legal entities available for local and foreign entrepreneurs:
1. Sole Trader (Autónomo) 👤
Ideal for freelancers or small entrepreneurs.
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✅ No need for initial share capital
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👥 The owner is personally liable for all debts
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🧾 Simple accounting and registration
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🔁 Can convert to an SL later
2. Limited Liability Company (Sociedad Limitada – SL) 📦
The most popular form for small and medium-sized businesses.
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💰 Minimum share capital: €1
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🔐 Liability is limited to capital contribution
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👥 Minimum 1 shareholder
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📋 Requires registration with the Commercial Registry
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🧾 Must maintain accounting and file annual accounts
3. Public Limited Company (Sociedad Anónima – SA) 🏛️
Best suited for large corporations or companies planning to list on the stock exchange.
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💶 Minimum capital: €60,000
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🧍 Minimum 1 shareholder
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📈 Shares can be traded publicly
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🧾 Subject to strict governance and reporting
4. New Enterprise Limited Company (Sociedad Limitada Nueva Empresa – SLNE) 🆕
A simplified version of the SL, focused on fast-track setup for startups.
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👤 Between 1 and 5 shareholders
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💼 Capital between €3,012 and €120,202
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📥 Quick online incorporation process
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📃 Business name includes the founder’s name
5. General Partnership (Sociedad Colectiva) 🤝
Formed by two or more partners who share liability and profits.
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👬 Unlimited liability for partners
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📝 Suitable for small family-run businesses or professional firms
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🧾 All partners are involved in management
6. Limited Partnership (Sociedad Comanditaria) 🔄
A mix of general partners (with liability) and limited partners (investors).
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🧍♂️ General partners manage the company
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💼 Limited partners only contribute capital
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🧾 Profits shared based on agreement
7. Branch of a Foreign Company (Sucursal) 🌍
Allows international businesses to operate in Spain without forming a separate legal entity.
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📑 Must be registered with the Spanish Commercial Registry
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🧾 The parent company is fully liable
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📬 Requires a legal representative in Spain
8. Representative Office (Oficina de Representación) 🏢
Used for non-trading purposes (e.g., market research, liaison).
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❌ Cannot issue invoices or engage in commercial activity
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👤 Appoint a legal representative
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📉 No separate legal entity
📊 Comparison Table: SL vs SA vs Autónomo
| Feature | SL (Sociedad Limitada) | SA (Sociedad Anónima) | Autónomo (Sole Trader) |
|---|---|---|---|
| Capital Requirement | €1 (recommended: €3,000) | €60,000 | None |
| Limited Liability | ✅ Yes | ✅ Yes | ❌ No |
| Public Share Trading | ❌ No | ✅ Yes | ❌ No |
| Ideal For | SMEs | Large companies | Freelancers |
| Tax Regime | Corporate Tax (25%) | Corporate Tax (25%) | Personal Income Tax |
📋 Requirements for Forming a Company in Spain
Regardless of the type of company, you’ll generally need to:
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✅ Obtain a NIF (Tax ID) for founders
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🏛️ Draft company bylaws
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🧾 Get a certificate of company name reservation
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🖋️ Sign the deed of incorporation before a Notary
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📬 Register with the Mercantile Registry
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💼 Register for social security if hiring employees
🧑⚖️ How Borderless Lawyers Can Help
Our firm offers full legal support for forming any type of company in Spain. We provide:
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🧾 Entity selection guidance
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📄 Drafting of incorporation documents
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✅ Company registration and tax setup
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👥 Shareholder agreements and board structuring
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🧮 Ongoing tax and accounting compliance
🚀 Start Your Business in Spain with Confidence
Choosing the right type of company is crucial to the long-term success of your business in Spain.