International Corporations: Spain


Spain, a country located in extreme southwestern Europe. It occupies about 85 percent of the Iberian Peninsula, which it shares with its smaller neighbour Portugal.
Spain is a storied country of stone castles, snow-capped mountains, vast monuments, and sophisticated cities, all of which have made it a favoured travel destination. The country is geographically and culturally diverse. Its heartland is the Meseta, a broad central plateau half a mile above sea level. Much of the region is traditionally given over to cattle ranching and grain production; it was in this rural setting that Miguel de Cervantes’s Don Quixote tilted at the tall windmills that still dot the landscape in several places. In the country’s northeast are the broad valley of the Ebro River, the mountainous region of Catalonia, and the hilly coastal plain of Valencia. To the northwest is the Cantabrian Mountains, a rugged range in which heavily forested, rain-swept valleys are interspersed with tall peaks. To the south is the citrus-orchard-rich and irrigated lands of the valley of the Guadalquivir River, celebrated in the renowned lyrics of Spanish poets Federico García Lorca and Antonio Machado; over this valley rises the snowcapped Sierra Nevada. The southern portion of the country is desert, an extension of the Sahara made familiar to Americans through the “spaghetti western” films of the 1960s and early ’70s. Lined with palm trees, rosemary bushes, and other tropical vegetation, the southeastern Mediterranean coast and the Balearic Islands enjoy a gentle climate, drawing millions of visitors and retirees, especially from northern Europe.
The official language of Spain is Castilian. It is the country’s most widely spoken language, and outside Spain it is generally known as Spanish.

Company Incorporation
Main Characteristics of the international bussiness (IBO

Spain is a major business destination in Europe, being one of the most developed economies in the European Union (EU); in the last years, the business environment continuously expanded and those interested in opening a company in Spain can find relevant business opportunities there. The local authorities provide a wide range of incentives for specific economic sectors, which are also available for foreign businessmen.

Spain Corporations Overview

Company type
Corporation (Sociedad Anónima, S.A.)
Governing corporate legislation
Commercial Code, the Corporations Law, and the Mercantile Register Regulations
A S.A. may be incorporated by one or more shareholders, who can be resident or non-resident, natural or juristic persons.
The board of directors shall have no less than 3 members. Directors may be individuals or legal entities, resident or non-resident.
Information published relating to company officers
Details of the shareholders are available publicly.
The liability of the shareholders is limited to the unpaid amount of their shareholdings.
Accounting requirement/ compliance
Companies must annually file a company income tax return with Agencia Tributaria. All companies are required to make three interim payments on their corporate tax accounts in April, October, and December.

Other periodic returns such as V.A.T., payroll and withholding tax may be of mandatory filing. Companies with annual revenue higher than EUR 6m must file their VAT returns monthly. All other companies must file quarterly returns

Companies must submit Financial statements and management reports annually, which must be reviewed by an auditor qualified to practice in Spain unless the company may issue an abridged balance sheet. The books do not need to be kept locally.

Companies can be exempt from annual audit if their total assets are less than €2.85m or their annual revenue is less than €5.7m; or less than 50 people are employed for two consecutive years.
Corporate income tax
The general corporate income tax rate is 25%. Other tax rates may apply for certain industries (e.g. banks are taxed at 30%).

Newly created companies are taxed at a reduced rate of 15% in the first period that they obtain profits and the following.

There is a local tax that may not exceed 15% of the presume average profits.
A company is tax resident in Spain if it is incorporated under Spanish law, it has its registered office in Spain or its effective management is in Spain.
Tax resident entities are taxed on their worldwide income.
Standard currencyEUR
Shared capital/paid up
A S.A. must be established with a minimum share capital of EUR 60,000.

It is required that during the incorporation procedures, the company’s capital to be fully subscribed. Moreover, it must be paid up to at least a quarter from the value established for a share.
Basis of the Legal SystemCivil law
A S.A. must appoint a secretary, who must be an individual and can be resident or non-resident.
They are marketable securities. Debentures and other securities that recognize or create a debt, even bonds convertible into shares, can be issued.
Registered address
A company must have a registered office in Spain.
General meeting
Required to hold an annual meeting of shareholders within the first six months of the financial year to vote on certain items, such as approval of the annual accounts and allocation of results/distribution of earnings.
Electronic SignaturePermitted
Time to form5-7 days
Renewal date
Anniversary date of the company / Each Year
Time ZoneGMT
ConfidentialityHigh Levels


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