In Spain, like in any other country, the impact of the pandemic has affected various sectors of the economy. To address this, the Spanish Government introduced the Recovery, Transformation, and Resilience Plan, funded by the European Union with 170,000 million euros. This plan aims to implement 212 significant investments and reforms to steer the Spanish economy towards a digital and environmentally friendly model. As the economy progresses slowly but steadily, forecasts predict a 6.5% GDP growth nationally this year, with Madrid specifically expecting an 8.1% growth. This economic landscape creates opportunities for entrepreneurs looking to set up a company in Spain.
As part of the recovery process, the Ministry of Economic Affairs and Digital Transformation has introduced a bill focused on fostering the establishment and expansion of companies in Spain. This bill aims to simplify the process of setting up a company and remove any hindrances that may impede its growth, whether they are regulatory, financial, or administrative. Noteworthy measures included in this bill are: a) adjustments to current regulations for establishing a limited liability company (“sociedad de responsabilidad limitada”); b) removal of barriers to market unity; and c) implementation of new regulations for crowdfunding. These initiatives create a conducive environment for entrepreneurs looking to set up a company in Spain.
The initial measure focuses on the establishment of a limited liability company in Spain. It proposes replacing the previous requirement of a minimum share capital of 3,000 euros with a nominal amount of just 1 euro. To protect the interests of potential creditors, the bill introduces two regulations: firstly, profits will be allocated to a legal reserve until the total of this reserve and the share capital reaches 3,000 euros; secondly, in case of company liquidation with insufficient assets, shareholders will be jointly and severally liable to cover the difference between 3,000 euros and the subscribed share capital. These adjustments aim to facilitate the process for entrepreneurs looking to set up a company in Spain.
In addition to reducing the capital requirement for limited liability companies to 1 euro, the bill streamlines the process of setting up such companies by electronically submitting the Single Electronic Document (DUE) to the Information Center and Business Network for the Creation of Companies (CIRCE), under the Ministry of Industry, Commerce, and Tourism. When establishing a business in Spain, both Spanish and foreign investors commonly opt for the widely used limited liability company structure. This reform holds significant importance as it enables entrepreneurs to not only access the Spanish market but also extend their reach to the broader market of the 27 European Union member states. This streamlined process benefits individuals looking to set up a company in Spain.
Antonio Viñal
Lawyer
AVCO Legal
madrid@avco.legal
