Spain Country Profile business trade issues

Spain

DOING BUSINESS

Local business incentives - Legal forms of companies - Registration and licensing procedures - Legal framework - Foreign exchange control - Regulations concerning equity investment - FDI inflows - Expertise of the political risk

Local business incentives

Invest in Spain is a governmental agency that provides assistance and support to promote international investments in Spain.
Certain industrial sectors, research and development are subsidised. Furthermore, specific allowances are granted to companies that invest in areas with economic gaps (3/4 of the country). The Instituto de la Pequeña y Mediana Empresa Industrial (IMPI), an organization specialised in welcoming and advising small and medium-sized companies, has been created by the Department of Industry. It established a list of the different sectors which benefit from specific allowances. To know the subsidies granted to companies involved in research and development, the interministerial Commission for scientific and technical research and the Centre for industrial technical development of the Department of Industry must be contacted. Moreover, companies can benefit from employment aids. The Ministry of Employment and Social Services determines the appropriate sectors. Added to these governmental aids, specific incentives are granted by the 17 Spanish autonomous communities. Investors should contact the regional authorities, where the company is located, to benefit from these aids as well as Community aids (especially for disadvantaged regions of the country).

Legal forms of companies

Form	Number of partners/shareholders	Minimum and/or maximum capital	Liability	Registration fee	Release of financial documents
Sociedad de Responsabilidad Limitada (S.R.L.) is a Private Limited Company.	Minimum 2 partners and maximum 50. nb: only 1 member for a sole proprietorship.	Minimum 3,005.06 €. Totally subscribed and released.	Liability is limited to the amount contributed.	1% of the capital amount.	No
Sociedad Anonima (S.A.) is a Public Limited Company.	Minimum 3 partners. nb: can be reduced to 2 then to 1 shareholder.	Minimum 60,101.21 €. At least 25% of the amount released at the constitution.	Liability is limited to the amount contributed.	1% of the capital amount.	Yes
Sociedad regular colectiva is a General Partnership.	Minimum 2 partners.	No minimum capital.	Partners' liability is several and unlimited towards third parties.	1% of the capital .	No
Sociedad comanditaria is a Limited Partnership	2 types of partners: active partners and sleeping partners.	No minimum capital.	Liability of active partners is unlimited. Liability of sleeping partners is limited to the amount contributed.	1% of the capital amount.	No

Registration and licensing procedures
Status must be drawn up in a deed drawn up by a solicitor notary. The competent register is the one where the company is located or where the branch is set up. Moreover, foreign investors must obtain a negative certificate issued by the Central Register of Commerce to make sure that the company's registered name is not being used. A tax license is required as soon as the company is constituted, and successively at the beginning of every financial year.

Legal framework
Law 18-1992 of the 1st of July 1992, came into force on the 4th of July of the same year and Royal decree 1816-1991 of the 20th of December 1991 concerning economical transactions with foreign countries transposes the CEE Council's Directive n° 88-36100 of the 24th of June 1988, relating to the free circulation of capitals between residents and member States.

Foreign exchange control
In Spain, free conversion of currencies is carried out as well as the right to transfer profits, capital, dividends, and surplus.

Regulations concerning equity investment
A majority holding interest in the capital of a Spanish company is authorised, provided that the activity is not related to the regulated sector of production and weapons' trade.

Foreign Direct Investment inflows in Spain

FDI inflows	2003	2004	2005	World rank (*) 2005
FDI inflows (USD million)	25 926	24 761	22 987	76/141

Source : UNCTAD - World Investment Report
Note : (*) World Rank = UNCTAD Inward FDI Performance Index. It is a measure of the extend to which a host country receives inward FDI relative to its economic size. It is calculated as a ratio of the country's share in global FDI inflows to its share in global GDP.

Last modified in 2006 - ongoing update