This guide covers the Spanish limited company, called an SL (short for Sociedad Limitada). Think of it as Spain's version of an LLC. It walks through what an SL is, what it costs to set up and run, the 2026 tax rates that apply, when an SL beats autónomo, and the steps to register. Last verified: May 2026.
The two big things to know upfront: minimum share capital is €1 since the 2022 Crea y Crece law (no longer €3,000), and corporate tax rates were cut for small companies in 2026 by Ley 7/2024.
Quick answer
Can a non-resident own an SL? Yes. Get a foreign ID number (NIE) or residency card (TIE).
How much capital do I need? €1 minimum since October 2022 (Ley 18/2022 "Crea y Crece"). Below €3,000, special legal-reserve rules apply.
What tax does an SL pay? Depends on size: 19% / 21% for micro-enterprises (turnover under €1M), 23% for reduced-dimension SMEs (€1M to €10M), 25% general rate, 15% for newly created companies in their first profitable year and the next.
Do I have to charge VAT? Usually yes. Register with Modelo 036 before your first invoice. Spain has no VAT turnover threshold.
Do I need Verifactu? Yes, mandatory from 1 January 2027 for all SLs (postponed from 2026 by RDL 15/2025).
What is a Sociedad Limitada (SL)?
An SL is a limited liability company. The company owes the business debts, not you personally. You contribute share capital (€1 minimum, more recommended), file annual accounts with the Mercantile Registry, and pay corporate tax on profits.
The headlines:
Limited liability. If the business fails, creditors chase the company, not your personal assets. The shield isn't absolute (mismanagement, personal guarantees, payroll debts can pierce it), but it's the main reason founders incorporate.
Tiered corporate tax. 19% / 21% / 23% / 25% depending on turnover. 15% rate available for newly created companies in their first two profitable years.
Social security via the administrator. The director who works in the company typically registers as autónomo societario with a higher minimum cuota than a regular autónomo (around €310 to €370/month plus MEI in 2026).
Annual accounts. Mandatory deposit at the Mercantile Registry every year.
What an LLC is called
The Spanish equivalent is the Sociedad Limitada (SL). You'll also see:
SRL - same thing, different initials (Sociedad de Responsabilidad Limitada).
Empresa emergente - startup classification under the 2022 Startup Law, with extra tax breaks if ENISA-certified.
2026 corporate tax rates
Ley 7/2024 introduced a phased reduction for small entities. The 2026 numbers:
Micro-enterprises (turnover < €1M): 19% on the first €50,000 of taxable base, 21% on the rest.
Reduced-dimension SMEs (turnover €1M to €10M): 23% in 2026. Drops 1 point per year to 22% in 2027, 21% in 2028, 20% from 2029.
General rate (turnover > €10M): 25%.
Newly created entities and ENISA-certified startups: 15% in the first profitable year and the next.
Capitalisation reserve: raised from 15% to 20% of profit retained, up to 30% if the workforce grows by more than 10%. Reduces the effective rate.
Minimum tax for big multinationals: 15% if global turnover exceeds €750 million (Pillar 2 implementation).
If you withdraw profits as dividends, the savings-income tax applies on the personal side: 19% on the first €6,000, 21% €6,000 to €50,000, 23% €50,000 to €200,000, 27% €200,000 to €300,000, 30% above €300,000.
SL costs in 2026
Setup costs:
Negative name certificate (certificación negativa): €22.
Notary deed: €500 to €600.
Mercantile Registry fee: €100 to €400 depending on capital and region.
Legal or advisory fee: €800 to €1,200 (optional but common).
Share capital: €1 minimum, €3,000 recommended to avoid the legal-reserve constraint.
Annual running costs:
Accounting and IS filings: €600 to €2,400/year depending on volume and provider.
Annual accounts deposit: included in most accountants' fees.
Administrator cuota (autónomo societario): €310 to €370/month plus MEI in 2026 if you work in the company.
Payroll (if you have employees): roughly €20/month per employee with a payroll service, plus their gross salary and social security.
Verifactu-compliant invoicing software: required from 1 January 2027.
Total first-year all-in cost for a sole-director SL: around €5,000 to €8,000 depending on whether you outsource accounting and how complex the activity is.
The €1 minimum capital and the legal reserve
Since 28 September 2022, Real Decreto Legislativo 1/2010 (the Capital Companies Law) was modified by Ley 18/2022 ("Crea y Crece"). Minimum SL capital is now €1.
But two protections kick in when capital is below €3,000:
Reinforced legal reserve. At least 20% of annual profit must go to the legal reserve until reserve + capital reach €3,000. Until that point, the company can't fully distribute profit.
Joint and several liability. If the company is liquidated and assets aren't enough to cover creditors, the shareholders are jointly liable for the difference between the actual capital and €3,000.
Practical reading: incorporating with €1 is legal and fast, but for any company expected to have outside creditors or to retain profits, contributing €3,000 from day one is cleaner.
Who can register an SL
Any adult can incorporate an SL. Foreigners can own 100% of one. The practical filters:
NIE or TIE for any individual shareholder or administrator.
Director eligibility. The administrator must be at least 18 (legal majority). No exceptions for emancipated minors.
Activity match. Pick the right CNAE code at incorporation. Switching later is possible but generates extra paperwork.
No legal incompatibilities (judges, public officials in some roles, undischarged bankrupts).
Can a foreigner own an SL?
Yes, fully. Foreigners can own 100% of an SL with no nationality cap. The mechanics:
Get an NIE (foreign tax ID) before signing the deed.
Open a Spanish business bank account in the company's name. Most banks now accept NIE-based applications for new SLs.
Sign the deed at a Spanish notary, in person or through a power of attorney.
File at the Mercantile Registry of the province where the registered office sits.
No special tax applies to non-resident shareholders. Dividends paid abroad are subject to standard withholding (19% for EU residents, varying for treaty countries). For US founders, the Spain to US tax treaty handles double taxation.
How to register an SL: step by step
Reserve the company name (certificación negativa) at the Central Mercantile Registry. Up to five name proposals; valid for 6 months.
Open a company bank account, deposit the share capital, and keep the bank certificate.
Draft the articles of association (estatutos) and shareholder agreements.
Sign the public deed before a notary. Bring NIE, bank certificate, name certificate, and the articles.
File the deed at the Mercantile Registry of the province. The company exists legally once registered.
Get the CIF (company tax ID) and file Modelo 036 with AEAT to register for VAT and corporate tax.
Enrol the administrator for social security (autónomo societario regime, if working).
Set up Verifactu-compliant invoicing for use by 1 January 2027.
Reserve your company name. Order the certificación negativa from the Central Mercantile Registry. Confirms the name isn't taken.
Register for VAT and the company census. File Modelo 036. Tick the EU VAT box (VIES) if you'll sell to other EU countries.
File VAT returns. Modelo 303 every quarter, Modelo 390 annual summary in January.
Spain has no VAT turnover threshold. You must register before issuing your first invoice.
SL vs SLU: running solo
If you're the only owner, you can form an SLU (Sociedad Limitada Unipersonal). Same taxes, same liability, same minimum €1 capital. The only difference is that every public document must mention the single-shareholder status, and the sole shareholder's contracts with the company need to be formalised in a special book to be enforceable.
Autónomo is the self-employed-individual regime. You pay personal income tax (IRPF, progressive 19% to 47%) plus the monthly RETA cuota (€207 to €605 depending on income bracket, full breakdown here).
SL pays the tiered corporate tax (19% to 25%) on profits. You then pay personal tax only on the salary and dividends you draw.
Rough rule of thumb (test with real numbers before deciding):
Below €40,000 net profit: autónomo is simpler and usually cheaper. SL fixed costs eat the tax saving.
€40,000 to €60,000: depends on retention. If you withdraw everything for living expenses, autónomo wins. If you can leave 30%+ in the company, SL pulls ahead.
Above €60,000 with retention: SL is almost always cheaper. The tiered IS rates plus capitalisation reserve give you a meaningful effective-rate cut.
Liability concerns at any income level: SL gives the personal asset shield that autónomo cannot.
Lower headline rate for small companies (19% vs IRPF up to 47%).
Salary + dividend mix. Pay yourself a moderate salary (at IRPF rates) and draw the rest as dividends (savings income, 19% to 30%).
Retain and reinvest. Money left inside the SL is taxed once at the corporate rate. Useful for buying property, securities, or ploughing back into growth.
Capitalisation reserve. Up to 20% of retained profit (30% with workforce growth) is deductible.
More categories of deductible expenses than IRPF allows for autónomos.
Verifactu and B2B e-invoicing for SLs
The 2027 Verifactu rollout applies to all SLs from 1 January 2027 (postponed from 2026 by Real Decreto-ley 15/2025). Each invoice must carry a QR code, a chained-hash digital signature, and either real-time submission to AEAT (Verifactu mode) or a tamper-evident local audit trail.
Penalty for using non-certified software once the deadline lands: €50,000 per fiscal year under article 201 bis of the Ley General Tributaria.
The Crea y Crece B2B e-invoicing rollout is separate and phased. Pick invoicing tools that support both flows. For the full mechanics see the Verifactu guide.
FAQ
What's the difference between SL, SLNE, and SA? SL is the standard limited company (€1 minimum capital). SLNE (Sociedad Limitada Nueva Empresa) is a streamlined SL with notary speedups, but it's rarely used now that Crea y Crece sped up regular SLs. SA (Sociedad Anónima) is the Spanish PLC, with €60,000 minimum capital and used for larger or listed companies.
Can I run an SL from abroad? Yes. The registered office must sit on Spanish territory, but day-to-day management can happen anywhere. The company's tax residency stays Spanish as long as it's incorporated locally.
Do I need a Spanish accountant? Effectively yes. SL accounts must be in Spanish format and filed at the Mercantile Registry in Spanish. Non-resident accountants almost always struggle with the local forms.
How long does it take to incorporate? 2 to 6 weeks, depending on the bank account opening, the notary slot, and the Mercantile Registry queue in your province. Faster through CIRCE / DUE digital flows for sole-shareholder SLs.
Can I convert an autónomo activity into an SL? Yes. You incorporate the SL, then either close the autónomo (baja en RETA + Modelo 036, see the deregistration guide) or keep both running for different activities.
Do I need to deposit the €1 in a bank? Yes, the share capital (whatever amount) must be deposited and certified by a bank. The certificate goes to the notary at signing.
Bottom line
Setting up an SL is straightforward once the jargon clicks. You can incorporate with €1 of capital, but most founders contribute €3,000 to skip the legal-reserve constraint. The 2026 corporate tax rates are friendlier than they used to be for small companies (19% / 21% for micro), and the rate keeps dropping for SMEs through 2029.
Open an SL when net profit heads past €40,000 with retention, or when you simply want the limited-liability shield. For setup help, see renn's SL service, or book a tax chat to model SL vs autónomo for your specific numbers.
