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[ESTABLISHING A BUSINESS ENTITY IN SPAIN]
directly or indirectly over 25% of the capital or voting rights; or (ii) exercise directly or indirectly the control of NEWCO. When nobody holds such participation or exercises such control, it is considered to be the directors who exercise such control. In case any of the directors is a legal entity, the individual representing that entity is considered to exercise the control.
Telematic incorporation Limited Liabilities Companies
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Telematic incorporation of a Limited Liability Company can be done by using the Single Electronic Document, which contains the data that shall be sent to the legal registries and to the competent public authorities. Limited Liability Companies can be incorporated online provided that all contributions made by shareholders are monetary, not in kind and the payment is made using electronic means . 2.2 Branch In general terms, a Branch shall be incorporated by means of (i) granting the incorporation deed by parent company before a notary, (ii) obtaining a NIF (Tax ID); and (iii) registering the branch with the Commercial Registry.
Tax filings
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Tax Identity Code (“NIF) for the NEWCO: a provisional NIF shall be obtained prior to filing at the Commercial Registry, and once NEWCO is registered the final NIF will be provided by Tax Authorities (the number does not change). Registering in the Tax Census: NEWCO shall be registered into the Census of Traders, Professionals and Withholding Agents (“Censo de Empresarios Profesionales y Retenedores”) before initiating the activity . NEWCO shall file tax return on Economic Activities Tax (“Impuesto de Actividades Económicas”): there is an exemption for the two first tax years and while the turnover is lower than 1 million. Incorporation of a company is taxed on Transfer Tax as exempt (tax on corporate events concerning transaction on company’s equity): transfer tax return shall be filed. NEWCO registering in the Commercial Registry
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Documents to be obtained before the signature of the incorporation deed of a Branch Resolution incorporating the branch passed by the parent company: The resolution to open a branch and to grant power of attorney to its representative shall be passed by the competent body of the foreign parent company. This resolution shall be translated into Spanish. Cash contributions: To open a bank account to allocate the contribution, if any. Parent company’s NIF and appointment of its representative in dealings with the Spanish tax authorities: Foreign investor shall apply for a NIF and appoint an individual or legal entity residing in Spain to represent him in dealings with the Spanish tax authorities regarding its tax obligations.
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NEWCO can initiate its activities as from the date stated at the incorporation deed, but it will become a legal entity with legal personality separated from its shareholders upon registration.
ILN Corporate Group – Establishing a Business Entity Series
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