Formal registration of companies has many immediate benefits for the companies and for business owners and employees. Legal entities can outlive their founders. Resources are pooled as several shareholders join forces to start a company. Formally registered companies have access to services and institutions from courts to banks as well as to new markets. And their employees can benefit from protections provided by the law. An additional benefit comes with limited liability companies. These limit the financial liability of company owners to their investments, so personal assets of the owners are not put at risk. Where governments make registration easy, more entrepreneurs start businesses in the formal sector, creating more good jobs and generating more revenue for the government.
Below is a detailed summary of the bureaucratic and legal hurdles faced by entrepreneurs wishing to incorporate and register a new firm in Spain. It examines the procedures, time and cost involved in launching a commercial or industrial firm with up to 50 employees and start-up capital of 10 times the economy's per-capita gross national income.
This information was collected from World Bank: Doing Business
Time to Complete
Obtain a certification of uniqueness of proposed company name (certificación negativa de la denominación social) from the Mercantile Register
EUR 15.95 (certificate) + EUR 3 (stamps)
Open a bank account for the company; deposit capital in the bank and obtain a deposit certificate
Grant a public deed of incorporation before a public notary
approximately €500, depends on the amount of the share capital and complexity of the operation.
Submit Declaración Censal de Inicio de Actividad and obtain the Tax Identification Number (Numero de Identificación Fiscal, NIF) from the Delegación Provincial de la Agencia Estatal de la Administración Tributaria
Obtain a tax declaration of exemption from the Dirección General de Tributos - Consejería Hacienda Comunidad Madrid
File the public deed of incorporation of the company for its registration with the Mercantile Registry.
Legalize company books
approximately EUR 25 to purchase the books (2 books) + EUR 21.49 to legalize
Submit a notification of start of operations (declaración responsable) to the municipality.
7 days (simultaneous with procedure 6)
File for social security and affiliate all workers with the local general treasury of social security (Tesorería General de la Seguridad Social)
1 day (simultaneous with procedure 7)
Notify the Delegación Provincial de la Consejería de Trabajo e Industria
* Takes place simultaneously with another procedure.