The Two Main Options: SL vs Autónomo

For foreigners starting a business in Spain, there are two common structures: the Sociedad de Responsabilidad Limitada (SL) — equivalent to a UK Ltd or US LLC — and the Autónomo — the Spanish equivalent of a sole trader or self-employed individual. Choosing the right structure depends on your liability tolerance, expected income, number of collaborators, and plans for growth.

Autónomo (Self-Employed)

The Autónomo registration is the simpler and cheaper option to set up. There is no minimum capital, and you can be trading within a few weeks. However, as an Autónomo, you are personally liable for all business debts — your personal assets (including your Spanish property) are at risk if the business fails.

Key facts about the Autónomo regime in 2026:

  • Monthly Social Security contributions are now income-based (approximately €230–€590/month depending on net income) following the 2023 reform.
  • Income is taxed through IRPF (personal income tax) at progressive rates up to 47% nationally.
  • New Autónomos benefit from a flat rate of €85/month for the first 12 months (reduced rate, tarifa plana).
  • You must file quarterly IVA (VAT) returns and IRPF income tax declarations.

The Autónomo structure is well-suited to freelancers, consultants, and those with low start-up risk and a relatively modest income. For those expecting higher profits or wishing to protect personal assets, the SL is generally preferable.

Sociedad Limitada (SL)

The SL (Sociedad de Responsabilidad Limitada) is Spain's most popular business structure for small and medium businesses. It provides limited liability — shareholders are not personally responsible for company debts beyond their investment. The minimum share capital is just €1 following recent legislative reforms (previously €3,000).

Key facts about the SL in 2026:

  • Minimum 1 shareholder (can be a single person).
  • Corporation tax (Impuesto sobre Sociedades) at 25% on net profits (15% for new companies in the first 2 profitable years).
  • Directors must be registered and may also be Autónomos for Social Security purposes.
  • Annual accounts must be filed with the Mercantile Registry.
  • More administrative overhead than the Autónomo regime, but typically handled by a gestor or your lawyer's network.

How to Form an SL in Spain: Step by Step

  1. Obtain NIE numbers for all shareholders and directors.
  2. Reserve the company name at the Central Mercantile Registry (Registro Mercantil Central) in Madrid — this takes 1–5 days online.
  3. Open a company bank account and deposit the minimum share capital (as little as €1).
  4. Draft the Articles of Association — your lawyer prepares the estatutos sociales governing the company's management and operations.
  5. Sign the Deed of Incorporation (escritura de constitución) before a Spanish notary.
  6. Register with the Tax Agency (AEAT) for a CIF (company tax number) — now typically done before the notary signing.
  7. Register in the Mercantile Registry of Málaga — this makes the company legally public and complete.
  8. Register for IVA and set up quarterly filings with a gestor or accountant.

Total timeline: typically 2–4 weeks from start to a fully operational company. Your lawyer handles the legal aspects; a gestor handles the ongoing tax compliance.

Costs of Setting Up an SL in Spain

  • Notary fees: approximately €300–€600
  • Mercantile Registry registration: approximately €100–€200
  • Lawyer fees: approximately €800–€1,500
  • Share capital: minimum €1
  • Ongoing: monthly gestor/accountant fees (approximately €100–€200/month)

Frequently Asked Questions

Yes. Non-residents can be shareholders and directors of a Spanish SL. You will need an NIE number (which can be obtained via Power of Attorney by your lawyer) and a Spanish bank account. However, if you are going to be actively managing the company in Spain, you may trigger tax residency obligations — take advice on your specific situation before proceeding.
For income below approximately €40,000–€50,000/year, the Autónomo can be more tax-efficient due to lower administrative costs. Above that level — or when personal asset protection is important — the SL generally becomes more advantageous. The answer depends on your specific income, expenses, and personal circumstances. We always recommend discussing this with a Spanish tax advisor before deciding.
Yes. Brexit has not affected the ability of British nationals to own and operate Spanish companies. British nationals can be shareholders, directors, and managers of Spanish SLs. They will need NIE numbers and may need additional steps for banking, but the corporate formation process is the same as for any non-EU national.