company structural distinction for foreigners; personal tax residency is covered separately in Visa & Legal.
Good to know
Good to Know
- There is no local-partner, local-director, or minimum-residency requirement to open a company in Ibiza/Spain as a foreigner — full 100% foreign ownership is standard and routine.
- Owning a Spanish company does not by itself grant you the right to live in Spain — residency still requires a separate route such as the Digital Nomad Visa or Entrepreneur Visa.
- Get your NIE first, before booking a notary or trying to open a bank account — nearly every delay foreign founders hit traces back to NIE timing.
- The headline '€1 minimum capital' figure is technically true but rarely used in practice for serious operations; €3,000 remains the practical norm to avoid legal-reserve restrictions and to be taken seriously by banks.
- Spain's corporate tax and freelancer/company rules are entirely national — there is no separate 'Ibiza tax rate'; a company or autónomo registered on the island follows the exact same Agencia Tributaria rules as anywhere else in Spain.
- Most nomads and small foreign-owned service businesses in Spain start as autónomo because it's fast (operational in 24–48 hours) and cheap, only incorporating as an SL once profit consistently clears roughly the €40,000–€60,000/year range.
- Almost everyone running a business in Spain — foreigner or local — uses a gestor (a local accountant/tax agent) for the quarterly VAT and withholding filings; the filing calendar (quarterly plus an annual return) is genuinely easy to miss without one.
- Owning 100% of a Spanish SL as a non-EU foreigner does not by itself grant you the right to live in Spain and run it day-to-day — that still requires a separate residence permit route (e.g. self-employment/entrepreneur visa or the digital nomad visa).
Reduced Rates
SMEs with net turnover below the small-company threshold
- Turnover Threshold
- €1,000,000
- Note
- Sources vary on the exact split-rate figures for 2025 vs. 2026 due to a phased reform; commonly cited figures are 21%/22% split for 2025 or a flat 23% for turnover under EUR 1 million in 2026, trending down toward 20% by 2029.
- Rate Percent
- 15
- Applies For
- First two consecutive fiscal years in which the company records a taxable profit
- Description
- New/startup companies (including Spain's certified 'emerging company' Startup Law regime)
Filing Obligations
Modelo 200
- Purpose
- Annual Corporate Income Tax return
- Deadline
- Within 25 calendar days after the 6 months following the end of the tax period — for calendar-year companies this is the first 25 days of July
Modelo 202
- Purpose
- Quarterly advance/instalment payments toward annual corporate tax
- Deadline
- April, October and December
Modelo 303
- Purpose
- Quarterly VAT (IVA) return
- Deadline
- Within 20 days after each calendar quarter
Modelo 111
- Purpose
- Quarterly withholding tax return on employee salaries and professional fees paid
- Deadline
- Quarterly
Modelo 347
- Purpose
- Annual declaration of operations exceeding a set amount with any single client or supplier
- Threshold
- €3,005
Freelancer Vs Company For Foreigners
- Conversion Path
- It is common and straightforward to start as an autónomo and later incorporate as an SL once revenue or liability risk grows; going the other direction (SL back to autónomo) is not a simple reversal.
Break Even Point
- Caveat
- Below this range, the ongoing costs of running an SL (accounting/gestor fees, registry filings, formal governance) often outweigh the tax savings versus simply staying autónomo.
- Range Low
- €40,000
- Range High
- €60,000
- Description
- The point at which incorporating as an SL typically becomes more tax-efficient than remaining an autónomo is widely cited in Spanish tax/legal sources as falling in this range of annual net profit
Autonomo Sole Trader
- Liability
- Unlimited personal liability — personal assets, including a home or foreign assets, are exposed to business debts.
- Setup Speed
- No minimum capital, no notary, no formal incorporation — can typically be operational within 24–48 hours of registration.
- Personal Tax
- Income is taxed via personal income tax (IRPF) at progressive rates, commonly cited as roughly 19% up to 47% depending on income level and autonomous community.
- Filing Obligations
- Quarterly IRPF instalments (Modelo 130) and quarterly VAT returns (Modelo 303), plus RETA social security contributions.
- Foreigner Requirements
- Any nationality can register as autónomo, but non-EU nationals need a residence/work permit that authorizes self-employed activity (e.g. a self-employment visa or Spain's digital nomad visa) to legally live in Spain while operating this way.
- Description
- Operating in your own name with no separate legal entity, registered with the Agencia Tributaria and with Social Security under the RETA self-employed scheme.
Sociedad Limitada Sl Company
- Liability
- Limited liability — shareholders' personal assets are generally protected beyond their capital contribution, provided proper separation of personal/company finances is maintained.
- Setup Speed
- Typically 2–6 weeks from application to full registration, and can be completed remotely via a notarial power of attorney if the founder is not physically in Spain.
- Setup Requirements
- Every foreign shareholder and director needs a Spanish NIE before incorporation; incorporation involves a notarial deed and registration at the Registro Mercantil.
- Practical Advantages
- Commonly cited advantages for larger or growing operations include easier access to bank financing, a more 'corporate' image for landing contracts with larger clients or public tenders, and the ability to split income between a deductible salary and dividends.
- Foreigner Requirements
- Foreigners of any nationality — EU or non-EU — can own and be directors of a Spanish SL without restriction on ownership; however, a non-EU national who wants to physically live in Spain while actively running the business will generally still need an appropriate residence permit separate from simply owning the company.
- Description
- A private limited company with its own legal personality, separate from its owners.
Jurisdiction Note
Ibiza is part of Spain and the Balearic Islands autonomous community. Corporate tax (Impuesto sobre Sociedades) is a national Spanish tax administered by the Agencia Tributaria, so the rates and filing rules below apply uniformly to a company registered in Ibiza just as anywhere else in Spain. An official EU/Spanish government page references a distinct 'special regime in the Canary Islands and the Balearic Islands,' but this call could not confirm its specific mechanics for Ibiza.
Applies To
Sociedad Limitada (SL) or other incorporated company forms
Filing Method
All filings must be submitted electronically through the Agencia Tributaria's platform using a digital certificate or Cl@ve authentication.
Standard Rate
- Rate Percent
- 25
- Description
- Standard rate for most resident companies
Annual Accounts
All companies must also file annual accounts with the Registro Mercantil (Commercial Registry) after shareholder approval, generally within six months of the end of the accounting period.
Minimum Effective Tax
Large corporate groups and entities with net turnover exceeding EUR 20 million are subject to minimum effective taxation rules ensuring the effective rate does not fall below 15% of the taxable base.
Incorporation Process And Requirements
- Standard Vehicle
- Sociedad Limitada (SL) — a private limited company. This is the most common business structure for foreigners in Spain, requiring a Spanish tax number (NIF) and notarial deed of incorporation.
- Jurisdiction Note
- Ibiza has no separate business-registration regime from mainland Spain — company law here is fully national (Ley de Sociedades de Capital), and Ibiza-registered companies file with the same provincial Balearic Islands Mercantile Registry that covers the whole archipelago. There is no Ibiza-specific incorporation process.
Steps
- 1. Obtain NIE for all foreign shareholders/directors (consulate or in-Spain; can take 1–2 weeks in-country or several weeks via consulate).
- 2. Reserve the company name at the Central Mercantile Registry (Registro Mercantil Central) — submit 3–5 name options; certificate usually issued within 1–3 business days and is valid for 6 months.
- 3. Open a Spanish corporate bank account 'in formation' and deposit the share capital; the bank issues a deposit certificate needed by the notary.
- 4. Draft the company bylaws (estatutos) covering share structure, directors, and governance.
- 5. Sign the notarial deed of incorporation (escritura de constitución) — can be done via power of attorney if the founder cannot travel to Spain, though the POA itself may need apostille and sworn translation if executed abroad.
- 6. Obtain the provisional NIF (company tax ID) from the Agencia Tributaria, often same-day, which lets the company begin invoicing.
- 7. File the deed with the provincial Mercantile Registry (Registro Mercantil) — for Ibiza-based companies this is the Balearic Islands registry; this step grants full legal personality.
- 8. Obtain the final NIF, register for VAT/corporate tax (Modelo 036), and register with Social Security if hiring employees or if the director must join the RETA self-employed regime.
Typical Timeline
- Main Bottlenecks
- Obtaining NIEs (especially via consulate abroad) and opening a corporate bank account are consistently cited as the two most common causes of delay, more than the notary or registry steps themselves.
- Standard Estimate
- 2 to 8 weeks from NIE in hand to full registration, when documents are ready and the founder is proactive about bank KYC and notary scheduling.
- Fast Track Estimate
- 5–10 working days via the CIRCE/PAE one-stop online platform for a stripped-down SL with standard bylaws — but this route still requires the foreign shareholder to already hold an NIE.
- Remote Non Resident Estimate
- For founders incorporating fully remotely via power of attorney with consular NIE processing, complex banking KYC and apostilled foreign documents, some Spanish law firms quote a longer realistic window of roughly 2 to 4 months, occasionally longer.
Core Prerequisites
- NIE (Número de Identidad de Extranjero) is mandatory for every individual foreign shareholder and director before anything else can proceed — the notary cannot include an unidentified shareholder in the incorporation deed. It can be obtained via a Spanish consulate abroad (Form EX-15) or in Spain, and can also be obtained by a representative under power of attorney if the founder cannot travel.
- If a shareholder is itself a foreign company (US LLC, UK Ltd, etc.), that entity needs a separate Spanish NIF rather than an NIE.
- A Spanish registered office address is required (can be a home address, co-working space, or virtual office).
- A Spanish bank account is needed to receive the deposited share capital before the notary can proceed.
Minimum Share Capital
- Legal Minimum
- €1.00
- Practical Recommended Minimum
- €3,000
- Note
- Since the 2022 Crea y Crece reform an SL can legally be formed with as little as €1, but while paid-in capital stays below €3,000, at least 20% of annual profit must go to a legal reserve until the threshold is reached, and shareholders are personally, jointly liable for the shortfall between €3,000 and the subscribed capital if the company is later liquidated insolvent. Most serious ventures still capitalize at €3,000 for this reason and because banks/counterparties view very low capital as a risk signal.
Local Partner Or Sponsor Mandate
- Detail
- Foreign entrepreneurs can own 100% of a Spanish company, typically a Sociedad Limitada (SL), without requiring a local Spanish partner or director. There is no requirement for a local partner, no minimum residency period, and no nationality restriction — a foreigner can be the sole shareholder and sole director (forming an SLU, a single-member SL).
- Required
- No
Post Incorporation Registrations
- VAT (IVA) registration — standard rate 21%
- Corporate income tax registration (Impuesto sobre Sociedades) — standard rate 25%, with a reduced rate available for qualifying new companies in their first profitable years
- Social Security registration for the company as employer if hiring staff, and RETA (self-employed regime) enrollment for a controlling director, which carries a minimum monthly contribution
Typical One Off Incorporation Costs
- Notary Deed Fee
- €400
regulated fee, typically €150–€800 depending on capital and document length
- NIE Processing Fee
- €11
Modelo 790-012, roughly €10–€12 per person
- Name Reservation Certificate
- €17
typical range €13–€20
- All In Total Excluding Capital
- €1,050
typical bundled range €600–€1,500 for notary, registry, gestor and small filings, before adding share capital
- Mercantile Registry Filing Fee
- €250
typically €100–€400 depending on capital and region
- Gestor Or Law Firm Coordination Fee
- €1,000
optional but very common for foreign founders; typically €800–€2,000, up to €5,000 for full-service firms
- Sworn Translation And Apostille Per Document
- €250
typically €30–€300 per foreign document depending on length and country
- All In Total Including Recommended 3000 EUR Capital
- €4,050
typical range €1,500–€4,500 including paid-in capital
AI-generated estimateData refreshed July 2026
This section has no cited sources.
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Data last updated July 2026 · Verify anything important.