A limited company in Spain, known as a sociedad limitada (SL), is the most common company form for freelancers who outgrow the autónomo model. It gives limited liability and a separate legal entity, but it also brings formal accounting, annual filings and extra costs.
The short answer: to set up an SL you choose a name, open a bank account for the capital, sign the articles before a notary, register the company, obtain a tax ID and register for tax and social security. You then keep formal accounts, file annual accounts and a corporate tax return, and pay yourself through salary or dividends. Costs and rules change, so ask a gestor for a quote.
Capital requirements, fees and corporate tax rates change and some company types have special rules. This guide is general information, not tax or legal advice. Ask a gestor or lawyer for current costs and a plan for your case.
Key takeaways: limited company in Spain
- A limited company in Spain (SL) is a separate legal entity with limited liability.
- Set-up involves a notary, the Commercial Registry, tax registration and a bank account.
- Annual obligations include accounting, annual accounts, corporate tax return and often more.
- The director who also owns and manages the company normally pays autónomo contributions.
- Compare the total cost with staying as an autónomo before you incorporate.
In this guide
- Key takeaways: limited company in Spain
- What is a limited company in Spain?
- Limited company in Spain: costs and minimum capital
- How to set up a limited company in Spain
- Taxes of an SL
- Paying yourself from a limited company in Spain
- Foreign clients and your SL
- Annual obligations of an SL
- Common mistakes to avoid
- Frequently asked questions about limited company in Spain
- Final thoughts on limited company in Spain
- Sources and further reading
- Related guides
What is a limited company in Spain?
An SL is a company whose capital is divided into shares, and whose owners are liable only up to the capital they contributed, with exceptions in cases such as guarantees or negligent management. It is the standard choice for small businesses. A freelancer can be the only shareholder and the sole director of a single-member SL.
Limited company in Spain: costs and minimum capital
| Item | What to expect |
|---|---|
| Share capital | The traditional minimum is €3,000. Under current rules a company can be formed with less, down to €1, but then must follow additional rules, such as allocating profit to reserves until the standard capital is reached. |
| Notary and registry fees | Several hundred euros, varying with the capital and the type of articles |
| Gestor or lawyer | An extra fee if you do not use the online procedure yourself |
| Ongoing accounting | A monthly or annual fee that is often higher than for an autónomo |
| Annual filings | Registry deposit of annual accounts and tax returns |
Fees change, so ask your gestor for a current quote.
How to set up a limited company in Spain
- Reserve the company name with the Central Commercial Registry.
- Open a bank account and deposit the share capital, if required.
- Draw up the articles and sign the incorporation before a notary. A simplified online procedure exists for some standard cases.
- Obtain the tax ID (NIF) for the company.
- Register in the Commercial Registry.
- Register for tax and, if needed, for VAT and the ROI.
- Register the director for social security as appropriate, and any employees.
Taxes of an SL
- Corporate tax: the general rate is 25%, with reduced rates in some cases, such as new companies in their first profitable years and certain small companies. Check the current rates.
- VAT: works like for autónomos. Invoices to EU and non-EU business clients follow the usual rules.
- Personal tax on pay-out: the director pays personal tax on salary or on dividends.
- Prepayments: companies pay corporate tax in advance during the year.
The comparison with autónomo tax is in freelancer or company: when to incorporate in Spain and how much tax freelancers pay in Spain.
Paying yourself from a limited company in Spain
| Method | Effect |
|---|---|
| Salary as director | Deductible for the company and taxed in your personal income tax; social security rules apply |
| Dividends | Paid from profit after corporate tax, then taxed in your savings income |
| Loans and expenses | Personal use of company money can cause tax problems. Keep personal and company money separate. |
Directors who own and manage the company usually register as autónomos. See self-employed company director vs freelancer in Spain.
Foreign clients and your SL
Your SL invoices in its own name, with its own tax ID and invoicing numbering. The VAT treatment for EU and non-EU business clients is the same as for an autónomo. See how to invoice a foreign company. Open a business account that handles foreign currencies; see multi-currency accounts for freelancers.
Annual obligations of an SL
- Formal bookkeeping according to the General Accounting Plan.
- Annual accounts approved by the shareholders and deposited at the Commercial Registry.
- Corporate tax return and quarterly prepayments, VAT returns and other filings.
- Legal books, such as the shareholder register.
- Reporting of the company’s beneficial owner.
Common mistakes to avoid
- Treating company money as personal money.
- Missing the annual accounts deposit.
- Ignoring the director’s social security obligations.
- Choosing a company without comparing the total costs.
- Not keeping minutes and records.
- Using a cheap online service without understanding what is included.
Frequently asked questions about limited company in Spain
What is the minimum capital for an SL?
The traditional minimum is €3,000, but companies can be formed with less, down to €1, subject to additional rules on reserves. Check the current requirements.
How long does it take to set up a limited company in Spain?
It can take from a few days to a few weeks, depending on the procedure, the notary and the registry.
Do I still pay autónomo contributions?
Directors who own and manage the company normally do. Check your situation with a gestor.
What taxes does an SL pay?
Corporate tax on profit, VAT in the usual way and, for the owner, personal tax on salary or dividends.
Can an SL invoice foreign clients?
Yes. The VAT treatment for EU and non-EU business clients is the same as for an autónomo.
Is an SL better than being an autónomo?
It depends on profit, risk and costs. Compare both with a gestor.
Final thoughts on limited company in Spain
A limited company in Spain can protect your assets and offer tax flexibility, but only if the numbers and the risk justify the extra cost and admin. Plan the set-up with a notary and a gestor, keep personal and company money separate and budget for annual obligations. Compare the SL with the autónomo option every year as your profit changes.
Sources and further reading
- Registradores de España
- Agencia Tributaria: Impuesto sobre Sociedades
- Seguridad Social: régimen de autónomos
- Boletín Oficial del Estado (BOE)
Related guides
- Freelancer or Company: When to Incorporate in Spain
- Self-Employed Company Director vs Freelancer in Spain: The Real Differences
- LLC for Freelancers in Spain: Pros, Cons and Costs
- Estonia e-Residency for Freelancers: Is It Worth It?
Disclaimer: This article is for general information only and is not tax, legal or financial advice. Rules, fees and thresholds change often and differ by country; always confirm current details with the tax authority and a qualified adviser. Some links may be affiliate links, which means we may earn a commission at no extra cost to you.