Non-profit/For-profit Company Registry Requirements

Non-Profits

Spain has three common types of non-profit entities: associations, foundations, and cooperatives. Please note that Catalonia, Basque County, Valencia, and other autonomous zones may have different and/or additional requirements.

Associations

Associations are the simplest and most flexible entity type. Any three people (or legal persons) can create an association.

To declare a new association, founders must submit:

• Association formation minutes (“Minutes”) (notarized)
  • Names, nationalities of the founders of the association (whether natural or legal persons)
  • Name of the association (as well as any official abbreviation/acronym)
  • Address of association
  • Nationality of association
  • Expression of willingness of founders to form the association
  • Specific agreements made between founders
  • Reference to and Incorporation of the Articles of Association
  • Date and place of the signing of the Minutes
  • Designations of members for provisional governing bodies or counsels within the association framework
  • If establishment is done by a legal person(s), the adoption of the formation agreement must be accompanied by certification from relevant authorities.
  • If establishment is done by natural persons, or individual representatives, their personal identities must be certified.
• Articles of Association (notarized)
  • Purpose and activities of the association
  • Address of the association (already established in the Articles of Association; foreign associations must establish a branch in Spain)
• Requirements (and accompanying forms) for admission, withdrawal, and termination
  • Criteria to guarantee the democratic administration of the association
  • Admission form
  • Must state any members or associates that receive compensation for their services

Once forms are complete, the founders must register with the Registry of Associations. Foreign associations as well as associations that carry out activities in more than one “Autonomous Community” must register with the National Registry of Associations. Other information may be requested as well. If profit-making (read: commercial) activities are involved, it may also be necessary to register with the Mercantile Registry, which handles registrations of all entities and persons engaging in commercial activities in Spain.

Foundations

Foundations are formed when some amount of capital, property, or other assets is irrevocably committed toward serving the general interest. In Spain, the “general interest” may include, but is not limited to:

• Social causes
• Education
• Culture
• Sports
• Healthcare
• Development
• Environmental causes
• Scientific research
• Other public benefit purposes

Individuals and and legal entities may establish a foundation. A least 70% of annual income must be used for the public benefit purposes of the foundation. Foundations also may not pursue a private purpose, such as providing benefits to founders’ immediate family.

To establish a foundation, founders must have:

• Starting capital of at least 30,000 euros (typically)
• Founding document
• Either an inter vivos (notary deed) or causa mortis (will)
• Name and address of founder
• Founder purpose
• Foundation purpose
• Description of foundation assets
• Statutes
• Composition of foundation board

To register, first go to the Protectorate for approval of the foundation’s purpose, its activities, and the sufficiency of the endowment (at least 30,000 euros). If approved, you may then proceed to the notary to establish the foundation. The notary will establish the foundation and register it with the Foundations Registry under the Ministry of Justice.

Cooperatives

Cooperatives are worker-owned entities identified by their democratic governance and joint ownership. There are many types of cooperative (over a dozen), including worker cooperatives, farming cooperatives, housing cooperatives, etc. Cooperatives may be set up for both nonprofit and for-profit causes.

Cooperatives may offer certain types of benefits to members, including tax deductions, reductions on contributions to social security, etc.

For-Profits

There are at least nine different kinds of business entities in Spain. Each incorporation type has its benefits, liability exposure, and starting requirements. Some common and helpful types may be:

• Sole Trader
• Limited Liability Company (“LLC”)
• Sociedad Limitada Nueva Empresa (“SLNE”)
• Sociedad Anonima (“SA”)
• Partnership

The process for registering a business is extensive, and the steps and requirements may differ depending your incorporation type. A registered agent or lawyer may be helpful during this process.

To register, you must first check with the Mercantile Registry to find a unique name (one not already trademarked by someone else). The Mercantile Registry will issue a no-name certificate guaranteeing that you have a name not already taken by another party.

Afterwards, apply for a provisional company tax ID code (“CIF”), and register for VAT. If you are a foreigner setting up a limited company, you may also need to inquire about an NIE tax ID as well.

With no-name certificate and tax ID in hand, you may then open a bank account in your company’s name. There is likely a minimum required capital deposit for your incorporation type. You will receive from the bank another document proving that you’ve paid the minimum deposit into your account. This amount may not be withdrawn until the company has been formally incorporated. This certificate will also allow you to obtain your permanent CIF later.

Next, find a notary to certify your company constitution/deed of incorporation and bylaws. At this point, your company will become legal. The company bylaws must include details such as:

• Corporate name
• Business purpose
• Business address
• Starting capital amount
• Number of shareholders
• Whether administrators or directors are being compensated
• Corporate fiscal year

After signing and notarizing the company deed, you may then activate your corporate bank account and the authorized signatories. You will also have 30 days to register your deed of incorporation with the local tax office.

Next, register with the Mercantile Registry. You will need your deed of incorporation and no-name certificate.

Lastly, go back to the tax office to complete the incorporation process. You will need to register for the tax on corporate activities (Impuesto sobre Actividades Economicas) and and obtain your permanent CIF. Please bring your provisional CIF certificate, deed of incorporation, and a copy of your Mercantile Registry registration.

Companies will also need to register for the corporation tax (Impuesto sobre Sociedades). After your company has been incorporated, go to the tax office and register your company on the Census of Taxpayers.

Please note that Catalonia, Basque County, Valencia, and other autonomous zones may have different and/or additional requirements.

Sources

• Velasco Lawyers

  How to create a nonprofit organization in Spain and its taxation

• TSI International

  National report on third sector barriers in Spain

• Lex Universal

  New Right of Association Law in Spain

• TBA Associates

  Incorporating a Foundation in Spain

• Foundation Act 50/22

• Expatica

  Starting a business in Spain

• Justlanded.com

  Spain guide: how to legally incorporate your company

• Welex

  What is the Mercantile Registry?

• Mercantile Registry Website (in Spanish)