Types of Companies in Spain - Legal Entities Compared

Our team of lawyers in Spain can provide legal assistance for theregistration of a company and can help businessmen in choosing a legal entitythat best suits their business objectives. In this article, our team presents the main types of companies in Spain.

Quick Facts
Main types of companies/structures in Spain	– limited liability company (SL), – joint-stock company (SA), – partnerships, – cooperatives, – sole proprietorship (EI), – jointly-owned company (CB) etc.
Foreign entities in Spain	– subsidiary, – branch office (sucursal), – representative office (oficina de representacion)
Minimum share capital	EUR 60,000 for SA; EUR 1 for SL (capital under EUR 3,000 requires a legal reserve – our attorneys can detail
Remote company formation (YES/NO)	YES
Bank account required for share capital (YES/NO)	YES
General steps to open a company	– choose a business structure, – select company’s name, – register local address, – prepare Articles of Association and other documents, – register with the Mercantile Registry, – obtain tax identification number (NIF)
General required documents	– Articles of Association, – ID documents, – proof of registered address, – proof of paid registration fee, etc.
Special licenses and permits	Depends on the business industry and specific activities (transportation, education, construction, finance, tourism, etc.)
Corporate income tax rate	25% (standard); 15% for newly created companies and startups, under certain conditions; in 2026, 19%/21% for micro-companies (turnover under EUR 1 million) and 23% for smaller companies (turnover under EUR 10 million)
Personal income tax for sole traders	Progressive rates, between 19% and 47% (combined state and regional scale; the top rate varies by region), depending on annual income
VAT registration	It is mandatory for all businesses selling taxable goods/services to register for VAT.
VAT rates	21% (standard); 10%, 4% (reduced)
Minimum numbare of shareholders required	1 for both SL and SA
Virtual office possibility (YES/NO)	YES
Assistance and additional services	Our lawyers can help you determine the appropriate structure for your business operations and handle the registration procedure. We also offer assistance in real assistance matters through our property lawyers.

What company types can I incorporate in Spain in 2026?

In Spain, investors can choose from the following legal structures:

sole trader;
partnership;
limited liability company;
public limited company;
co-partnership;
cooperative;
new enterprise limited company (abolished in October 2022, see below);
limited partnership.

Businessmen interested in starting a business in another EU country, such as Germany, should know that the main company types available for incorporation are: the limited liability company (GmbH), the joint stock company (AG), the limited partnership (KG), the general partnership (OHG), the civil law partnership (GBR), the sole proprietorship. Our partners from LawyersGermany.com can definitely give you more details about these types of companies.

What is the most common way to start a business in Spain in 2026?

Out of all the legal entities mentioned above, most of the investors prefer to register a limited liability company, as it represents an autonomous structure and its founders can’t be held responsible for the company’s debts. This type of Spanish company is suitable for the needs of small and medium-sized enterprises, which represent the majority of companies in Spain.

What is a limited liability company in Spain?

A limited liability company, known as Sociedad Limitada (SL), is a type of company in Spain that offers flexibility and asset protection. It’s created for small and medium-sized enterprises. Shareholders’ liability is limited to their capital contributions, separating personal and corporate liabilities.

What are the main requirements for setting up a limited liability company in Spain?

In order to open this type of company in Spain, namely the LLC, you will need to follow these steps:

obtain a certificate of company’s name from the Central Commercial Register;
ensure that shareholders and directors have a tax identification code in Spain for legal compliance;
draft the Articles of Association;
sign the deed of incorporation before a notary;
obtain a provisional tax identification number (NIF) for tax compliance purposes;
register the company with the Commercial Register to apply for a permanent NIF with the Spanish Tax Agency;
open a corporate bank account to manage the company’s finances.

In the infographic below, you can observe the main types of Spanish companies:

What is the new enterprise limited company in Spain?

The new enterprise limited company in Spain was a simplified form of the limited liability company, abolished by Law 18/2022 with effect from 19 October 2022 (existing SLNEs are now governed by the ordinary SL rules); it had special requirements. For example, the incorporation of this type of structure required a number of shareholders between one and five.

What is the public limited company in Spain?

A public limited company is known in Spain as Sociedad Anónima (SA). Our Spanish lawyers explain below the key characteristics of this type of structure:

the SA is commonly used for larger business ventures and various purposes, like holding companies or stock corporations;
it can be formed by single individuals or multiple shareholders;
SA allows for publicly traded shares, offering great flexibility in ownership.

What company types are suitable for foreign companies?

Foreign companies that want to expand on the Spanish market can incorporate one of the following:

the branch office (an entity that does not have legal personality and it is dependent on the parent-company that has set it up);
the subsidiary (a separate legal entity, incorporated as one of the Spanish company types that have separate legal personality);
the representative office (it is similar to the branch, with the mention that it can’t engage in commercial activities).

What should I take into consideration when choosing one of the types of companies in Spain?

There are many aspects you should consider when you choose to incorporate a legal entity in Spain. Theselection of a legal entity can be influenced by many factors, such as the obligations and rights deriving from the respective business forms and also on the business plans investors have in Spain. In the list below, our Spanish lawyers present some of the most important aspects regarding this issue:

the liability of the owners (the owners can have full or partial liability, as it can be the case of the limited liability company, where the shareholders are responsible only to the extent of their capital contribution);
the taxation system (some Spanish company types, as it is the case of partnerships and sole traders, are taxed following the personal income tax system, while others follow the corporate taxation rules);
the capital (many of the Spanish company types can be set up without any capital requirements, while others, such as the joint stock company, can be incorporated only by subscribing the minimum share capital established by law);
independence (some company types in Spain, such as the branch office or the sole trader, are not independent entities, others are seen as separate structures from their owners);
accounting obligations (they vary greatly based on the company type – for instance, companies (SA or SL) exceeding certain size thresholds must be audited, while smaller companies are exempt).

Our lawyers also invite you to watch a short video onthe main types of companies available in Spain:

What are the main taxes Spanish companies need to pay in 2026?

In Spain, companies are subject to a corporate income tax (CIT) rate of 25% on their worldwide income. Additionally, there are special tax rates for some types of companies in Spain. Newly created companies are taxed at a reduced rate of 15% for their first two tax periods, under certain conditions. The ordinary VAT rate in Spain stands at 21% and the reduced rates are 10% and 4%.

Businessmen are invited to contact our law firm in Spain for more details related to the types of companies that are available in this country.