Company Incorporation in Spain is often the first legal step for founders, investors, and international groups that need a clear operating or holding structure in Spain. The right setup affects liability, contracts, tax positioning, banking readiness, reporting duties, and future licensing work. Bergers Legal can help assess the structure before documents are filed.
What is Company Incorporation in Spain?
Company Incorporation in Spain is the process of forming a legal entity under the laws of Spain. The choice of entity, shareholders, directors, registered office, and governance documents affects how the business can contract, open accounts, hold assets, and meet reporting duties. Bergers Legal can guide the setup and document preparation process.
Who this service is for
- Foreign founders planning to start or expand a business in Spain.
- Holding, trading, consulting, technology, fintech, or investment businesses that need a legal entity.
- Groups comparing jurisdictions for tax, governance, substance, reporting, and banking readiness.
- Entrepreneurs who need company documents prepared consistently for banks, partners, or future licensing.
- Existing businesses restructuring ownership or adding an international entity.
What problem this service helps solve
A company can be incorporated quickly on paper, but problems usually appear later if the entity type, ownership file, registered address, articles, accounting duties, or bank-readiness pack do not match the business plan. A careful incorporation process reduces avoidable friction with banks, counterparties, tax advisers, and local authorities.
How Bergers Legal can assist
- Reviewing the proposed business model, ownership structure, and target markets before documents are prepared.
- Identifying the documents, compliance policies, and corporate records that are usually expected for the case.
- Coordinating local counsel, registered agent, or filing support where local execution is required.
- Preparing or reviewing corporate, compliance, and application materials so they are consistent and regulator-ready.
- Guiding follow-up questions, corrections, and post-setup compliance steps without promising a final approval outcome.
Step-by-step process
- Initial consultation and business model review.
- Selection of the most suitable company structure in Spain.
- Shareholder, director, UBO, and governance document preparation.
- Name, registered office, and registered agent or local filing coordination where required.
- Incorporation filing and review of issued corporate documents.
- Post-incorporation support for bank readiness, compliance records, and next legal steps.
Documents and information usually required
- Passport copies and proof of address for shareholders, directors, and beneficial owners.
- Proposed company name, activities, ownership percentages, and management structure.
- Source-of-funds or source-of-wealth information where banks or agents request it.
- Registered office, local agent, or local representative information where applicable.
- Corporate documents for any shareholder that is a legal entity.
- Business plan or short activity description for banking and compliance review.
Estimated timeline
The timeline for company Incorporation in Spain depends on name checks, document collection, local filing speed, notarization or apostille requirements, and whether the structure involves corporate shareholders. Bergers Legal can outline a realistic sequence after reviewing the ownership and activity profile.
Costs and pricing factors
Costs usually depend on the entity type, registered office or agent requirements, document legalization, number of shareholders and directors, local filing fees, tax or accounting support, urgency, and any post-incorporation banking or compliance assistance.
Risks and mistakes to avoid
- Choosing a jurisdiction before confirming the real operating model, client geography, and compliance burden.
- Submitting generic AML/KYC or corporate documents that do not match the actual activities of the business.
- Underestimating substance, governance, reporting, renewal, or ongoing compliance requirements.
- Starting bank, payment provider, or regulator discussions before the ownership and source-of-funds file is complete.
- Treating timelines and costs as fixed when they depend on third-party review, regulator questions, and document quality.
Detailed jurisdiction notes
Spain is one of the largest economies in the European Union and an attractive jurisdiction for international entrepreneurs seeking to establish a business within Europe. Company incorporation in Spain provides access to the EU single market, a developed financial system, and a stable legal framework for international operations.
Spain is particularly well known for its favorable holding company regime, which allows international groups to structure their investments efficiently through Spanish entities.
Many multinational companies choose to incorporate a company in Spain in order to benefit from the country’s extensive network of double taxation treaties and its special tax regime for holding companies.
Spanish Holding Company Regime (ETVE)
Spain introduced a special tax regime for holding companies in 1996. This regime is known as ETVE (Entidad de Tenencia de Valores Extranjeros), which translates as foreign securities holding company.
The purpose of the ETVE regime is to eliminate the negative effects of double taxation on international income and to make Spain an attractive jurisdiction for international holding structures.
Under this regime, a Spanish holding company may benefit from several tax advantages if specific requirements are satisfied.
Key benefits of the ETVE regime include:
- exemption from Spanish corporate tax on dividends received from foreign subsidiaries
- exemption from tax on capital gains from the sale of shares in foreign subsidiaries
- exemption from withholding tax on dividends paid to foreign shareholders
Because of these features, Spanish ETVE companies are widely used for international holding structures and global investment planning.
Requirements for the ETVE Regime
To qualify for the ETVE tax regime, certain conditions must be satisfied both by the Spanish holding company and by its subsidiaries.
Ownership Threshold
The Spanish holding company must own:
- at least 5% of the shares in the subsidiary, or
- an investment value of at least EUR 6 million
Minimum Holding Period
The participation in the subsidiary must be held for at least one year, either before or after the dividends are received.
Non-Resident Subsidiary
The subsidiary must be a non-resident company that does not conduct business activities in Spain.
Corporate Taxation of the Subsidiary
The subsidiary must be subject to corporate taxation in its country of residence, similar in nature to Spanish corporate income tax.
Non-Offshore Jurisdiction
The subsidiary must not be located in a jurisdiction classified as an offshore or tax haven according to the list maintained by Spanish tax authorities.
Active Business Activity
The income of the subsidiary must be generated from active commercial operations outside Spain. Passive income such as dividends or financial income may not qualify.
Substance Requirements
A Spanish holding company operating under the ETVE regime must demonstrate a certain level of economic presence in Spain.
This means the company should not exist solely as a formal entity but must have real business substance, which may include:
- local management
- administrative operations
- a registered office in Spain
The required level of substance may depend on the scale of investments and the structure of the holding company.
Taxation of Dividends Received
If the ETVE conditions are satisfied, dividends received from qualifying foreign subsidiaries are fully exempt from Spanish corporate income tax.
If any of the requirements are not met, the standard corporate tax rate may apply.
Capital Gains Tax
Capital gains arising from the sale of shares in foreign subsidiaries may also be fully exempt from Spanish corporate tax if the participation conditions and holding period requirements are fulfilled.
This feature makes Spanish holding companies particularly attractive for international investment structures.
Withholding Tax on Outgoing Dividends
Dividends distributed by a Spanish ETVE company to foreign shareholders may be exempt from Spanish withholding tax when those dividends originate from qualifying exempt income.
However, this exemption does not apply if the shareholder is located in a jurisdiction considered a tax haven by Spanish authorities.
In cases where the exemption does not apply, withholding tax may still be reduced under an applicable double taxation treaty.
Additionally, dividends paid to shareholders within the European Union may benefit from exemption under the EU Parent–Subsidiary Directive, provided certain ownership conditions are satisfied.
Withholding Tax on Incoming Dividends
Withholding tax on dividends received by the Spanish holding company from foreign subsidiaries depends on the tax legislation of the country where the subsidiary is located or on the applicable tax treaty with Spain.
For example, under certain double taxation treaties, withholding tax rates on dividends may be reduced depending on the shareholding level and other conditions.
Dividends received from companies within the European Union may also qualify for exemption under EU tax directives.
Why International Investors Choose Spain
Spain has become an important jurisdiction for international holding structures due to its combination of EU membership and favorable tax rules.
Entrepreneurs often choose Spain company incorporation because the jurisdiction offers:
- access to the European Union market
- a well-developed legal and financial system
- an extensive network of double taxation treaties
- the ETVE holding regime for international investments
- opportunities for tax-efficient global corporate structures
For international investors seeking to establish a holding company within the European Union, Spain remains one of the most competitive jurisdictions.
Next steps
If you are considering Company Incorporation in Spain, share the business model, ownership structure, target markets, and current documents with Bergers Legal. The team can review the case, identify missing information, and outline practical next steps by Telegram, WhatsApp, email, or consultation request.
