Forms of Business Organisation

The most common form for foreign investment in Spain is the sociedad anónima (SA). Spanish law also provides for the sociedad de responsabilidad limitada (SRL), or limited liability company. Small businesses prefer the SRL because of its lower capital requirements. More than 50% of Spanish-registered companies are SRLs.

The requirements of a corporation (SA) and a limited liability company (SRL)are:

Capital

SA: Minimum €60,101. Authorised capital must be fully subscribed and at least 25% of the face value of each share must be paid up at the time of inscription in the Mercantile Register, with the remaining 75% paid up within the period specified in company byelaws. Contributions to capital may be in cash or in kind. A contribution in kind must be verified by an independent expert appointed by the Commercial Register. The shares may be listed on the Stock Exchange.

SRL: Minimum €3,005, the capital is divided into “quotas”. Authorised capital must be fully subscribed and fully paid in at the time of incorporation. Contributions to capital may be made in cash or in kind.

Founders & Shareholders

SA: No minimum number of shareholders is required for an SA, although a special reporting and registration system applies to single shareholder companies. Shareholders can be individuals or companies of any nationality and residence. Shareholder liability to third parties is limited to the face value of their shares.

SRL: An SRL may be founded by only one partner. The other requirements for an SRL are the same as detailed above for an SA; unlimited number of shareholders; no restrictions on nationality or residence. The shareholders’ liability to third parties is limited to the face value of their quotas.

Board of Directors

SA: A minimum of three directors is required, but there is no maximum, nor are there any nationality requirements. Nevertheless, many foreign-controlled companies prefer to appoint a Spanish national to serve as secretary or non-director secretary of the board of directors. A director need not be a shareholder unless stipulated in the bylaws. The term of office may not exceed six years.

SRL: The maximum number of directors is 12, and the minimum is 3. The term for directors is unlimited unless provided in the bylaws.