If you’re making investment in Malaga or planning to start a business in the city, setting up a company may be your best option. Running an enterprise through a company adds credibility to your business and offers tax advantages. You also put the onus for responsibility in case of trouble (e.g. bankruptcy) on the company rather than yourself. In this article, we look at the steps involved to set up a company in Malaga.
Bring in the professionals
Having done it ourselves, we won’t pretend that it’s easy to set up a company in Malaga. The paperwork involved can be complex so it’s best to take professional advice to ensure you take the smoothest route. Getting help from the experts will also save you money and time, two very valuable commodities in any business.
Top tip – make it your absolute priority to gain a working knowledge of Spanish, preferably before you arrive in Malaga.
Get your NIE
If you intend to own any type of business in Malaga, you need to obtain your Spanish tax number. Known as número de identificación de extranjeros (NIE for short), it identifies you as the business owner in all transactions, for example, with your bank and with the tax authorities. All partners and directors in the company need a NIE, which is used to apply for the company’s tax number (número de identificación fiscal/NIF).
Did you know? You also need a NIE when you buy a property or car in Spain.
If you’re an EU citizen, you don’t need a work permit to set up a company in Malaga. If you’re from outside the EU, you do need one. Contact the Spanish consulate in your country of origin to find out how you apply.
Types of company
Like most countries, there are various types of companies available in Malaga, the most common being:
The most common type of companies in Malaga is the sociedad limitada (SL). Its business model and paperwork share similarities with limited companies in many western European countries. Minimum required capital: €3,000
A sociedad anónima (SA) is a public limited company, also similar to those found in other European countries. This type of company tends to be the preferred option for large corporations. Minimum required capital: €60,000
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How to set up a limited company in Malaga
For purposes of this guide, we’ve listed the steps for setting up an SL company in Malaga. The procedure for a SA is broadly similar.
Register your company name
First, choose the name you wish to operate under. This doesn’t have to be the same as your brand (which may not be available). For example, Guide to Malaga SL wasn’t available when we applied so our company name is Guide to Malaga City SL.
Once you’ve picked your possible names (up to three), submit them to the Central Business Registry (Registro Mercantil Central). You can do this online. If your choice is available, you receive a certificate valid for six months, although you must register the name at the notary within three months.
Open your Malaga company bank account
Next, open an account in your company’s name at a bank and deposit the required capital (€3,000) in the account. Ask the bank for a certificate stating that your company has the minimum capital required to set up a SL.
Set out your company’s rules
Your company in Malaga must have rules, known as estatutos sociales, which lay out the main characteristics of your company. These include the business activity in Malaga, the address, amount of capital, number of shareholders and the administrative system. You will need to present these (in Spanish) at the notary.
Top tip – think outside the box for your company’s activity and list the main one plus several subsidiary ones. These may be useful in the future if your company changes activity or diversifies. And you’ll save money and time because you won’t need new title deeds.
Set up and register the company’s deeds
You need to go to a notary public (notario) to do this. You must present the company name certificate, the bank certificate, the company rules and proof of identity for each shareholder.
Once the documentation is signed by the notary and all shareholders, the company’s deeds are ready. The next step is registration at the Business Registry in Malaga. You have two months to do this after signing the deeds.
Sign up for tax and VAT
The final step when you set up a company in Malaga is to register your company for tax and VAT (IVA in Spanish). This is done at the Malaga tax office. Take professional advice from a tax expert on this procedure and for presenting tax returns and annual reporting.