Brexit. Incorporation of Spanish company. Some UK Ltd companies trading in Spain are considering incorporating a Spanish subsidiary or affiliate due to BREXIT.
The majority of UK companies who are relocating their headquarters or subsidiaries to Europe due to Brexit, are going to cities such as Frankfurt, Paris, Dublin and Amsterdam, however, a few of them have chosen Spain as their destination, mainly those with commercials interests in that country. British investment in the Spanish economy is growing significantly, according to Spanish government figures. According to the Institute of Export & International Trade, Spain is an important market and business partner for the UK. “It is the UK’s 8th largest export market (9th for goods).
How your company should proceed to incorporate a Spanish subsidiary or affiliate?
Let´s list some key points that might prove of help.
The similar figure in Spain to a UK Limited company would be a “Sociedad Limitada (S.L.)” i.e. Spanish company where the shareholders have limited liability as they do in a Ltd company in the UK.
In most of the cases we are dealing with, the UK company will be the only shareholder of the Spanish company.
To incorporate a Spanish SL by a single shareholder which is a UK Ltd, the main steps will be as follows:
- The board of Directors of the UK Ltd company should agree the incorporation of the Spanish company and appoint an attorney to deal with the whole process.
- The UK Ltd company should obtain a N.I.F. (Spanish Tax Number) to be able to operate in Spain.
- Also, the Directors of the Spanish company, will need to obtain a N.I.E. number (Spanish Tax Number for individuals).
- Name request: the Spanish Companies House will need to approve the intended name for the Spanish company and certify that the name is not in use by another company.
- The Spanish Ltd company shall obtain a provisional N.I.F. (Spanish Tax Number).
- Open a bank account in Spain.
- Depending on the type of company i.e. affiliate or subsidiary, the shareholder/s will have to transfer a minimum of 3,000 Euro as share capital.
- Address registration: all Spanish companies shall have an address in Spain. The address can be either at the premises of the company in Spain, if there is one, or register the company at an accountant´s office.
- In most of the cases it is not necessary to take on board a resident in Spain as tax representative of the UK company. This would be required if some circumstances apply e.g. if the Spanish company is going to have a permanent establishment in Spain.
- Sign a i) deed of incorporation, ii) directors role acceptance and iii) articles of association, before a Spanish Notary. The most cost-effective way to do so will be via Power of Attorney (POA) that can be signed in the UK. This will save the Directors from travelling to Spain for that purpose.
- The deed of incorporation will then be registered at the Spanish Companies House after the relevant taxes are paid.
To comply with the above requirements, a list of documents such as the POA, a certificate of good standing, minutes of the board of Directors, among some others shall be translated and Apostilled.
How long does it take to incorporate a Spanish company? A prudent estimate of the time to have a company fully incorporated in Spain in normal circumstances would be two to three months.
Can this be done from the UK? The above process can be done in the UK without the Directors traveling to Spain if they appoint a Spanish lawyer to act on their behalf. Exceptionally, some banks may require meeting the Directors in person for the opening of the bank account, but obviously appointing a legal representative qualified in both England and Spain should smooth the process.
You can also access to this information by watching this video.