At Welex, leading law and accountant firm in Marbella, we would like to explain briefly and simply the steps to be taken if you have decided to set up a limited company in Spain: The constitution of a limited company in Spain. It is compulsory for the company to be incorporated by signing a public deed and it must be registered in the Spanish Commercial Register.



First, you need to choose a name for the company and apply to the Central Commercial Register for a certificate to confirm that the name you have chosen has not already been registered in Spain.  An entity whose name is identical to an existing name cannot be entered in the Mercantile Register.


The application for the name to be registered must be made by the interested party or beneficiary of the certificate. Once the certificate has been obtained, it will be valid for a period of six months from the date on which it was issued in Spain.


In second place, you need to decide who will be the shareholders of the entity, the total share capital and the participation of each partner in this capital. The share capital in Spain cannot be less than one euro, and whenever it is less than three thousand euros, a figure at least equal to 20 percent of the profit must be allocated to the legal reserve until this reserve together with the share capital reaches the amount of three thousand euros. Furthermore, in the event of liquidation in Spain, if the company’s assets are insufficient to meet the company’s obligations, the shareholders are jointly and severally liable for the difference between the amount of three thousand euros and the amount of the subscribed capital. The company may also have a sole shareholder, whether a natural person or a company in Spain.


In third place, you need choose a domicile in Spain, at the place where the effective centre of administration and management is located, or where your principal place of business or operation is located in Spain.


In fourth place, you must appoint a sole director or several directors, or a board of directors, to manage and represent the company in Spain. The director may be a natural or legal person and, unless the articles of association do not allow it, does not need be a shareholder.


In fifth place, it will be necessary to draw up the articles of association that will govern the operation of your company in Spain, which will include, among other things, the name of the company, the corporate purpose, the registered office and its share capital, the number of shares into which this capital is divided and the nominal value and numbering of the shares.


Please note that the duration of the company shall be indefinite, unless the articles of association provide otherwise.


Once the deed of incorporation has been signed before a notary by the founding partners and the director of the company in Spain, within two months the deed must be presented to the Companies Register for registration, after settlement and payment of the corresponding taxes and expenses.


If you wish to have assistance with the incorporation and registration of your company in the Spanish Commercial Register, please do not hesitate to contact our offices of Welex, lawyers in La Costa del Sol. We will carry out all the necessary formalities for the incorporation of your company in Spain.


Do you have doubts about the actual changes in the urban lease law in Spain?

In Welex, your spanish law firm, we have prepared an easy vision about the actual situation of this juridical issue.


change urban law spain


For a more detailed information about that issue, we invite you reading our publication.

Our lawyers in Marbella can solve any accountancy in Spain related matter.

In addition, in Welex we work without rest to provide you the best legal advice in Costa del Sol, so don’t hesitate in contact us about any legal spanish issue.

Are you interested about knowing how the taxation of Christmas lottery prizes works in Spain? Welex, your tax advisor in Marbella is pleased to write a few lines on this subject.

The well-known «Lotería de Navidad” (Christmas lottery), one of the most popular lotteries held in Spain, is actually called «El sorteo extraordinario de Navidad” (The Special Christmas Draw).


Read more……..

Have you ever received or been asked for a Spanish bill with Reverse charge (Inversión de Sujeto Pasivo, ISP) and not known what to do with it?


Have you received or have you ever been asked for a bill with Reverse charge (ISP) and you have not known what to do with it?


At Welex, your law and economics firm under one roof in Marbella, we would like to make you aware of this exception to the general VAT rule known as Reverse charge.

As a general rule, the taxable person is the natural or legal person in charge of passing on the VAT, working as a professional and/or businessman, to his clients through the issue of invoices. This taxpayer is also obliged to collect the VAT generated for subsequent presentation to the Tax Agency (AEAT).

In other words, as a businessman, we have the obligation to transmit the value added tax to our clients and declare it in the quarterly VAT forms.

Example VAT in Spain Reverse charge

To explain the common cycle of VAT in Spain, we will give the following example:

We have a business that is dedicated to the retail trade of shoes. Our business consists of buying shoes wholesale from company «X» at an affordable price and then trading them to a third party with a 30% profit margin.

Well, in the following example the supplier X is the taxable person as soon as he issues us the invoice with the corresponding VAT while we will be the taxpayer (final consumer who bears the VAT). Later, when we sell the shoes to our customer we will issue another invoice with its VAT to our customer and thus we become the taxable person and our customer the taxpayer.

However, there are several exceptions to the general rule. In this blog we are going to talk precisely about art. 84. One 2nd article of the VAT law (Law 37/1992) commonly known as the Reverse charge.

Reverse charge is a change in the general rule of VAT that makes the recipient of the invoice responsible for declaring the tax to the Treasury.

This implies that if we are under the exception of the article we will not be the ones in charge of charging the VAT but it will be the taxpayer’s obligation.

In this case, the taxpayer will have to reflect in the quarterly taxes the tax on that invoice for the information of the tax office.


What are the assumptions that condition the Reverse charge in Spain?

The Art. 84. One 2º of the VAT law (Law 37/1992) establishes the following assumptions:

a)      When they are made by persons or entities not established in the territory of application of the tax.

b)      When involves supply of unprocessed gold or semi-manufactured gold products, of a fineness of 325 thousandths or more.

c)       When involves supplies of new industrial waste, foundry waste and scrap, residues and other recyclable materials (supplies of waste or scrap of paper, paperboard or glass).

d)      In the case of the supply of services relating to emission allowances, certified emission reductions and greenhouse gas emission reduction units.

e)      In the case of the following supplies of immovable property following insolvency proceedings, the exempt supplies referred to in Article 20. One paragraphs 20 and 22, where the taxable person has renounced the exemption and supplies made in execution of the security lodged in respect of the immovable property.

f)       When the execution of works is involved, with or without the provision of materials, as well as the assignment of personnel to carry them out.

g)      In the case of the supply of the following products:

·         Silver, platinum and palladium, unwrought, powdered or semi-wrought.

·         Mobile phones.

·          Video game consoles, portable computers and digital tablets.


For any tax or legal question, do not hesitate to contact one

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