In our last article we looked at the difficulties of forming a limited company in Spain and suggested an alternative to individual business owners who are just starting off in business in Spain.
Non-resident companies who are considering opening a Spanish office face similar administrative and bureaucratic hurdles. If you would like to form a Spanish subsidiary of your company, the requirements are even more stringent. You will need to obtain a Spanish tax number (NIF) for the parent company in order to complete the company incorporation. A company director will need to be physically present in Spain for some days to visit a bank to open and activate the company bank account and attend the Notary signing. After all is completed, your local accountant (gestor) will deliver the paperwork to the Tax Office and Mercantile Registry. After around a month, the company incorporation will be complete.
As well as filing company tax returns (Modelo 200), Spanish companies are required to file annual statutory accounts. Thankfully these can now be filed online with the D2 software, but the Mercantile Registries (each region of Spain has it’s own Registry) can be very picky and reject accounts for technical reasons which should really be controlled in the initial filing. It’s classic Spanish bureaucracy and leads to a lot of extra work and some stress for your accountant who has to deal with it and having to explain to you who are rightly asking “why” ?!
We no longer offer a full Spanish company formation service for non-resident companies but would like to suggest an alternative which achieves exactly the same aims. This is the registration of your company for tax and VAT in Spain. You can find further details on our website. The procedure is much more simple and does not require you to physically come to Spain. A Spanish bank account is recommended so that you can pay your tax due directly, however we do offer a tax payment service for those clients that require it.
If your company opens an office, shop or warehouse in Spain it will have what is known as a Permanent Establishment and will then be required to file annual Spanish company tax returns (Modelo 200). There is no further tax registration required for this and you will file these returns under the same tax number (NIF) that you were originally registered for.
As always, feel free to contact us if you have any queries and we will get back to you as soon as possible.