Spain’s liberal economy, importance of foreign investments and its strong industrial sector has built a solid business environment and contributed to constant its growth past recent years. Spain has a reputation of low-cost territory of opportunity for foreign investors but administrative obligations remain quite sever in the country. The Corporate Tax Rate in Spain stands at 25 percent.
What are the main types of Company Formation Spain?
The two most popular forms of corporate structure in Spain are as follows:
- Public limited company (S.A.)
- Private limited company (S.L.)
Main features of a Sociedad Limitada (S.L.)
- usual format for small and medium businesses
- minimum share capital is €3,000, all paid up
- minimum number of shareholders is one
- annual audit is not usually required
Spain's growth has put pressure on the labour market but unemployment is still relatively high. However recruitment is rarely a problem for foreign companies seeking local staff. The workforce is well educated and flexible and labour costs are low. The labour market, however, is subject to tighter regulation. The maximum working week is 40 hours and companies have to provide six weeks annual leave to all workers.
Spanish companies are required to register and to submit annual accounts to the regulatory authorities. Annual audits are mandatory for larger companies. There are very few controls on foreign investment apart from restrictions on non-EU residents in certain strategic sectors, such as telecommunications.
Spain offers several incentives programs, mainly focused on regional schemes for investment in less developed areas, measures to encourage investment in specific sectors and tax breaks aimed at reducing unemployment among young people.
Companies are required to file annual financial statements and an annual return. If the company is considered ‘small’ both these may be simplified and there is no requirement to appoint a statutory auditor.
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