This guide walks you through Spain’s limited company, called an SL (short for Sociedad Limitada). Think of it as Spain’s version of an LLC. We cover name checks, tax forms, costs, and every strange acronym you will see on government sites.
Quick Q&A
- Can a non‑resident own an SL? Yes – just get a foreign ID number (NIE) or residency card (TIE).
- How much capital do I need? €3,000 (you only need to confirm you have it).
- What tax does an SL pay? 25 percent corporate tax; 15 percent for the first two profit years.
- Do I have to charge VAT? Usually yes. Register with form Modelo 036 before your first invoice.
What is a limited company (SL) in Spain?
An SL is a limited liability company. The company owes the business debts, not you personally. You need to put in €3,000 share capital and file annual accounts each year.
Highlights in plain terms
- Limited liability: If the business fails, creditors chase the company, not your house or car.
- Flat tax: The company pays 25 percent on profit. For the first two profitable years the rate is 15 percent.
- Social security: In most cases, the company’s admin (you) must register as an autónomo and pay social‑security contributions each month.
- Book‑keeping: You must keep official books and file them at the Mercantile Registry (a public office that stores every company’s accounts).
Mini number example
What is an LLC called in Spain?
The Spanish version of an LLC is the Sociedad Limitada (SL). You might also see SRL (same thing, different initials) or SLU if there is only one owner.
SL costs 2025
SL taxes 2025
- Corporate tax: 25 %. 15 % for the first two profitable years.
- Dividends tax: 19 % on the first €6,000, 21 % on €6,000–€50,000, 23 % above €50,000 (28 % above €300,000).
- Minimum tax for big multinationals: 15 percent if global turnover is above €750 million.
Example:
SL vs SLU: running solo
If you are the only owner, you can form an SLU (Sociedad Limitada Unipersonal). This is simply an SL with one shareholder. Same taxes, same liability. The only difference is that every public document must mention that you are the single owner.
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Who can register a limited company in Spain?
In Spain, not everyone can set up a company. Any adult can legally form an SL, but you generally need a reason: protecting from business risks, hiring staff, or renting office space. Without one of these, staying autónomo is often your best option.
Can a foreigner own a company in Spain?
Yes. Foreigners can own 100 percent of an SL. Just secure an NIE (foreign ID number) or TIE (residency card). No extra taxes apply for non‑residents.
How to register a company in Spain
- Reserve your company name (certificación negativa).
- Open a company bank account, deposit the €3,000 capital, and keep the bank certificate.
- Draft the articles of association (statutes).
- Sign the deed before a notary.
- File the deed at the Mercantile Registry - your company is born when it’s recorded.
- Get the CIF (company tax ID) and register for VAT with Modelo 036.
- Enrol for social security as the company admin.
Want help setting up? renn can help you set up your company.
Name check and VAT registration for SL
- Reserve your company name: order a certificación negativa (negative certificate) from the Central Mercantile Registry website. This proves no one else is using the name.
- Register for VAT and the company census: file Modelo 036 with the Tax Agency. Tick the box for EU VAT (VIES) if you will sell to other EU countries.
- File VAT returns: send Modelo 303 every quarter and the summary Modelo 390 each January.
Spain has no VAT turnover threshold. You must register before your first sale.
Limited company vs autónomo: which saves more?
Autónomo is the Spanish incorporation of a self‑employed freelancer. You pay personal income tax that rises in bands up to 47 percent, plus a monthly social‑security fee (currently €230‑€550). An SL pays the flat 25 percent company tax, while you pay personal tax only on the salary and dividends you take out.
Rule of thumb
- Below €70k income: autónomo is simpler and usually cheaper.
- Above €70k income: an SL is normally cheaper thanks to the lower tax rate and extra deductions.
Why an SL can save on taxes
- You can deduct more costs.
- You can split your income into a small salary (taxed under personal rates) and dividends (taxed at 19‑26 percent). That mix usually beats autónomo rates once your income reaches about €70k.
- Money left in the company is only taxed once at 25 percent, which is benefical if you want to reinvest in stocks, real-estate, etc.
Bottom line
Setting up a company in Spain is straightforward once you know the jargon. Open an SL when profit is heading past €50,000 or you just want limited liability.
Need the official rulebook? Spain’s public administration site has full details.
