Company Formation in Spain: Guide to Global Expansion for Americans

Expanding into Spain gives U.S. business owners a natural gateway to the EU market, with the added bonus of connections to Latin America and North Africa. However, Spain isn’t just well-located. It also offers political stability, strong trade links and a business-friendly environment that welcomes foreign investment.

If you’re an American entrepreneur interested in company formation in Spain, this guide covers the legal requirements, available business structures, registration steps and timelines you need to know. Whether you’re managing the business remotely or relocating a team, Spain’s legal framework makes it possible to start and run a fully foreign-owned business. We'll also discuss the Wise Business account. The global account that can help your company with all things cross-border.

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Business Structures in Spain

When setting up a business in Spain, most foreign-owned companies choose between two options:

1. Sociedad Limitada (S.L.): A private limited liability company that offers flexible management and protects personal assets. This is the most popular structure for small businesses and foreign investors. In 2017, S.L.s made up 99.51% of all companies incorporated in Spain.¹
2. Sociedad Anónima (S.A.): A public limited company for large firms or those planning to raise capital publicly.

Other options include setting up a branch office of a U.S. company or registering as a sole trader or autónomo, though these offer fewer protections and benefits for foreign investors.

Can Foreigners Start a Business in Spain?

Yes, Spain allows non-residents and non-EU citizens to fully own companies, with no requirement for local partners or shareholders.

U.S. citizens and other non-EU nationals will need a NIE (foreigner tax ID) for each director and shareholder, plus a corporate tax ID once the company is formed.

If you intend to live in Spain and run the business yourself, then you will need a residency permit, such as an entrepreneur or self-employed visa. Otherwise, you do not need to be in Spain to form your company.

By granting someone power of attorney, a legal representative can obtain your NIE, open your bank account, and attend the notary appointment for you. This means that it is not only possible to form your company from a distance, but it is also relatively simple for U.S. entrepreneurs.

Lastly, all businesses must have a registered address in Spain. This can be physical space or a virtual office, depending on your setup.

How to Start a Business in Spain: 7 Steps

Next, let’s move on to how to start a business in Spain as an American entrepreneur. Keep in mind, these seven steps are based on the S.L. structure and assume you’re forming a brand-new company, not a branch or subsidiary.

1. Get a NIE

Each shareholder and director needs an NIE. This number is used to identify foreigners in all official matters in Spain, including banking, taxes and corporate filings. You can apply for an NIE at a Spanish consulate or in Spain through a legal representative.

2. Reserve a Company Name

You will need to submit your proposed company names to the Central Mercantile Registry. The Central Mercantile Registry will issue a certificate showing that the name you have chosen is available, and this is a requirement prior to incorporation.

3. Open a Business Bank Account

Once you have the name certificate, open a corporate bank account in Spain and deposit the minimum share capital.

4. Draft the Articles of Association

These documents define the company’s structure, shareholder rights, business activities and administrative rules.

5. Sign the Deed of Incorporation

The next step is signing the public deed of incorporation with a Spanish notary. You’ll need your name certificate, capital deposit certificate, NIEs and articles. If you can’t travel, this step can be completed by a representative through a power of attorney.²

6. Register with the Spanish Company Register

The signed deed must be submitted to the local Mercantile Registry. Once accepted, your company becomes legally recognized. The registry will issue your company’s CIF (tax ID) and add it to the official Spanish company register.

The Spanish company register, Registro Mercantil, is where your company becomes officially recognized as a legal entity.

7. Final Tax Registration and Licenses

After registration, you’ll need to declare your business activity with the tax agency and register for VAT if applicable. If hiring employees, register with Spain’s social security system. Some industries require municipal permits or professional licenses.

Save Time and Hassle With Wise Business

Wise is not a bank, but a Money Services Business (MSB) provider and a smart alternative to banks. Wise makes it easy to send, hold, and manage business funds in currencies. You can get major currency account details for a one-off fee to receive overseas payments like a local. Simply add the local account details when billing international customers to receive international payments with no fees.

Account opening is 100% online, with no need to visit a branch or book appointments.

Once you’re set up, you can connect to software such as Wave, FreshBooks, and more. You can also withdraw funds from Stripe without currency conversion fees.

Open a Wise Business account online

Some key benefits of Wise Business include:

Major local account details to receive international payments with ease No monthly account fees just a simple one-off fee for account details Receive payments from e-commerce platforms such as Amazon or via Stripe. Free invoicing tool to generate and send invoices. Create invoices using the Wise invoice generator or invoice templates. Accounting integrations, including a QuickBooks Bill Pay connection. Bill payments will be synced, matched, and categorized in QuickBooks for simple reconciliation. Access to BatchTransfer. Fast payment of up to 1,000 people.

Spanish Business Formation: Timeline and Costs

You can typically expect it to take about three to six weeks when you set out to form an S.L. Some steps can overlap or be handled by a local agent for faster processing, but the timeline below gives you an idea of what to expect.³

Estimated Timelines:

• NIE: one to two weeks (can be longer outside Spain)⁴
• Company name reservation: one to three business days
• Bank deposit and notary: one to two weeks
• Registry and CIF: five to 10 business days

Typical Company Formation Costs in Spain:

• Notary fees: €500 to €1,000 for incorporation deed
• Mercantile Registry registration: €200 to €400
• Legal/professional services: €800 to €1,500 (optional but recommended)
• Official document translations: Variable (depends on language and number of documents)
• Share capital requirements:
  • €3,000 for a Sociedad Limitada (S.L.)
  • €60,000 for a Sociedad Anónima (S.A.) (25% payable at formation)⁵

There are also monthly accounting and compliance costs once your company is active. For example, you will need to file your annual financial statements with the mercantile registry. Outsourcing this task may cost €300 to €800 per year.

Taxes and Reporting Obligations

Spain applies a 25% corporate income tax on profits. Newly formed small companies may qualify for reduced rates in their first two years.⁶

Companies must file annual financial statements and tax returns. If you register for VAT (standard rate is 21%), quarterly filings are required.⁷

If you hire employees, you must also comply with payroll tax and social security contribution rules.

Foreign Investment Considerations

Spain actively welcomes foreign investors across most sectors, and there are currently few restrictions on ownership or operations. Typically, you can own 100% of a Spanish company, repatriate profits without issue and run your business independently.

Recent data from Invest in Spain points to just how strong the investment climate is. In 2024, Spain was ranked fourth in Europe for foreign direct investment, with 351 projects announced, a 15% increase from the previous year. While much of Europe experienced a decline in FDI, Spain went the other way.

Part of this momentum comes from the €163 billion Spain received through the EU’s NextGenerationEU funding package, the second largest allocation in the bloc. These funds have improved infrastructure and expanded incentives, making the country even more attractive to international investors.⁸

In most cases, investing in Spain is straightforward.

If your investment exceeds €1 million or touches on sensitive areas like defense, critical infrastructure or advanced technologies like AI, you’ll need to file a post-investment declaration with the Ministry of Industry. This is a simple formality and is usually handled by your legal advisor during company registration.⁹

Conclusion: Reap the Benefits of Starting a Business in Spain

Ultimately, U.S. business owners are drawn to Spain for many reasons, including access to the entire EU market, favorable conditions for remote management, high quality of life and modern infrastructure, government incentives for startups and tech companies, and lower labor and office costs than other EU countries.¹⁰, ¹¹

If you're thinking about long-term growth or want a solid foothold in Europe, Spain is a smart place to consider. With its access to the EU market, investor-friendly policies and strong infrastructure, it offers a practical and appealing base for international operations.

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Sources:

1. Spanish Incorporated Companies
2. Company Registration in Spain
3. S.L. Timeline
4. NIE Timeline
5. Company Formation Costs in Spain
6. S.A. Share Capital Requirements
7. Spain Corporate Tax Rate
8. Spain VAT
9. Invest in Spain
10. Post-Investment Declaration
11. EU Labor Costs