Following the enactment of the Royal Decree 13/2010, almost anyone setting up a new company in Spain has opted for the fast track Spanish “Express” Limited Company. The reason? It takes no more than 24h to have a fully functioning limited company (up to 3 days where the company’s share capital exceeds €3,100 but is less than €30,000).
Interestingly, the number of newly incorporated companies has increased 18% compared to last year, being October 2012 a record month in the last 5 years. This is not only thanks to the economic crisis pushing unemployed individuals to take up the self-employed option after the little chances to find employment but also to the reduction in the timing and registration expenses. Additional benefits include the standard limited liability, to many the most strong incentive to start a business securely.
Lets revisit what the specific limitations are in respect of this expedited company incorporation format:
- The share capital is limited to €3,100.
- Founder members have to be individuals; this leaves out companies, whether national or offshore.
- The Directorship configuration is limited to one of three: a sole administrator, 2 joint administrators or more than one joint and several administrators.
- Compliance of the statutes of such company with the new regulations in place.
The listed limitations make sense: the Mercantile Registry will not carry out due diligence on national founding companies nor the authenticity and legitimacy of an overseas company in such a brief period of time, even if the Notary already does this; yes, the drawbacks of a legality control double-filter system imposed in Spain.
One important recommendation for a non-Spanish shareholders and/or director is to have an NIE number, registered at the Tax office if possible, prior to attending the Notary Public meeting (in fact, this is a compulsory requirement nowadays for any public document). That, or else the process will be delayed by10 days approximately.
Have you had any problems when incorporating this type of company? Do you need help in setting up one?