Home Choose a Structure

Choose a Structure


 
Once you decide to establish a business or set your operation in Spain, a primary consideration is the type of business entity to form. Tax and liability issues, director and ownership concerns pertaining to the type of entity should be considered when making your determination. Personal needs and the needs of your particular type of business should also be considered.

The following is a brief overview of various business structures. The information is intended to provide a basic understanding of the different business structures and is not intended to provide legal advice. It is strongly recommended you consult with a Spanish abogado before making a determination as to the type of business entity to form.
 
A sole proprietorship is set up to allow an individual to own and operate a business by him/herself. A sole proprietor has total control, receives all profits from and is responsible for taxes and liabilities of the business.
 
Representative office. 
This dependent entity has a sole purpose: allow a foreign company to test the waters in Spain. It is not very popular in the market. Representative offices have a lot of things in common with branches and no substantial advantages. 
 
Creating a branch has simple requirements. A foreign investor may find it suitable to its interests to start their operation in Spain establishing a fully dependent entity, called branch ("sucursal") instead of incorporating a subsidiary in Spain. In most cases, it is preferable either to create an SL. If you plan to have a business address in Spain, creating an SL usually offers more tax advantages than a branch.
 
An SL is a simplified corporate structure, similar to the British "Ltd" or the American "LLC".Nowadays, most of the companies in Spain are SL, including the Spanish operations of  well known corporate giants.  It it also the suit of choice for individuals looking for a solution for selfemployment,. By forming a company, they shield their personal assets, only putting the assets of the company at stake.
 
Sociedad Anonima (Corporation).
An SA is similar to a corporation. In the past, SA was the most popular corporate structure. Today, only big corporations and other shareholders with special needs had retained a SA structure.
 

HIGHLIGHTS