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Business Permits & Incorporation for Foreigners in Valencia

Good to know

Good to Know

  • You do not need a Spanish local partner, co-founder, or sponsor to incorporate — 100% foreign ownership of an S.L. is standard and a single foreigner can be both sole shareholder and sole director (an SLU).
  • The legal minimum share capital is now just €1, but most founders still capitalize at €3,000 to avoid the mandatory profit-reserve rule and dividend restrictions that apply below that threshold.
  • Get your NIE moving first — it's the single biggest bottleneck in the whole process, and the notary cannot sign your incorporation deed without it for every shareholder and director.
  • If you can't travel to Spain, the whole process (NIE application, notary signing, bank account) can typically be handled remotely via an apostilled Power of Attorney to a local lawyer.
  • If you'll hold 25%+ of the company and act as director, budget for the monthly RETA (autónomo societario) social security contribution on top of standard corporate costs — this surprises a lot of remote founders.
  • The CIRCE/PAE online fast-track is worth using for a simple, standard-bylaws S.L. — it can cut weeks off the timeline, but only works smoothly if your NIE is already sorted.
  • Corporate tax in Spain is a national tax — a company registered in Valencia pays exactly the same Impuesto sobre Sociedades rates as one registered in Madrid or Barcelona; there's no Valencia-specific corporate tax break.
  • If you're a foreigner testing the waters with modest, irregular income, most gestores steer clients toward starting as autónomo first — it's far cheaper and faster to set up, and you can incorporate an SL later once revenue justifies it.
  • The reduced 15% corporate tax rate for new companies only applies to genuinely profitable years — a company that loses money in year one doesn't 'use up' one of its two discounted years.
  • Spain's SME and micro-enterprise reduced corporate tax rates have been subject to active legislative change recently (a 2025 reform decree), so the exact percentage your company qualifies for should be confirmed with a local gestor/accountant at filing time rather than assumed from last year's rate.
  • Whichever structure you choose, you'll need a NIE (foreigner ID number) before you can register for taxes, open a business bank account, or incorporate — get this moving early since it's often the longest step.
  • This summary covers only the business/corporate side; your personal income tax residency status (which determines whether Spain taxes your worldwide income at all) is covered separately under Visa & Legal — the two are related but distinct questions.

Ongoing Running Costs General

Gestor Accountant Fee

Amount Local Low
€50
Amount Local High
€80
Typical Monthly Range Note
A gestoría (accountant/admin service) commonly charges in the range of EUR 50–80/month for basic autónomo management, with cheaper budget options existing; SL companies with more complex bookkeeping and annual accounts typically pay more.

Corporate Tax Rates Spain Wide

Standard Rate Note
The standard rate applies to most resident companies (an SL, SA, subsidiary, or branch permanent establishment) on worldwide profits.
Standard Rate Percent
25
VAT Iva Standard Rate Percent
21

SME Reduced Rate 2026

Rate Percent 2026
23
Detail
Companies below this turnover threshold pay a reduced rate that is being phased down further in subsequent years under recent SME rate reforms.
Threshold
Turnover under EUR 10 million

New Company Reduced Rate

Rate Percent
15
Detail
Newly incorporated companies benefit from a reduced 15% rate on profits for their first two profitable fiscal years (not necessarily the first two calendar years — it's the first two years the company actually makes taxable profit).

Micro Enterprise Tiered Rate 2026

Detail
Sources report the exact split-rate percentages differently for 2026 (some cite 19%/21%, others 17%/20%) — this is a genuinely evolving area following a 2025 reform decree, so a gestor/accountant should confirm the exact current figures before filing.
Structure
Split-rate system: a lower rate on the first EUR 50,000 of taxable base, a slightly higher rate on the remainder
Threshold
Turnover under EUR 1 million

Large Group Minimum Effective Rate

Rate Percent
15
Detail
A minimum effective tax rule ensures large companies pay at least this rate after credits and deductions.
Threshold
Net turnover above EUR 20 million or entities in tax consolidation

Structure Comparison For A Foreigner

One Way Conversion
It's straightforward to start as an autónomo and later incorporate an SL, but not the reverse — an established SL cannot simply be 'converted back' into a sole-proprietorship structure.
Practical Switching Point
Multiple independent sources converge on a rough breakeven zone of roughly EUR 40,000–60,000 in annual net profit as the point where incorporating an SL starts to outweigh the extra administrative cost and complexity versus staying autónomo — though this varies by individual circumstances (dividend plans, need for limited liability, client perception, plans to hire or bring in partners).

Sociedad Limitada Sl Company

Liability
Limited to the capital invested in the company, provided personal and business finances are kept properly separated and no fraud occurs.
Who Its For
Businesses expecting growth, higher income, multiple partners/investors, or activities carrying meaningful liability risk.
Social Security For Owner Director
An owner who works in and draws remuneration from their own SL (an 'autónomo societario') still contributes to the same RETA self-employed social security regime, generally based on declared salary/remuneration rather than total company revenue.

Setup

Speed
Typically two to six weeks depending on NIE processing and registry timelines.
Process
NIE for all foreign shareholders/directors, company name reservation with the Registro Mercantil Central, notarized incorporation deed, opening a Spanish company bank account, deposit of share capital, and tax registration.
Minimum Capital
€3,000
Foreign Ownership
Non-residents can be shareholders, directors, or sole owners of a Spanish SL. A non-resident director without EU residency may still need a NIE and, depending on their role, a work/residence authorization to actually work in Spain.
Capital Note
EUR 3,000 is the standard minimum share capital, fully paid at incorporation. Some sources note a nominal EUR 1 minimum is technically permitted under certain simplified regimes, but EUR 3,000 remains the conventional figure most foreign founders use.

Taxation

Corporate Tax
25% standard rate, reduced to 15% for the first two profitable years, or the applicable SME/micro-enterprise reduced rate if turnover qualifies.
VAT
Same 21% standard VAT, filed quarterly via Modelo 303, plus Modelo 111 for any payroll withholding.
Dividends
Profit paid out to the foreign owner as dividends is taxed separately at Spanish savings-income rates (roughly 19%–23% depending on the amount), on top of the corporate tax already paid on profits.

Autonomo Freelancer Sole Proprietor

Liability
Unlimited personal liability — business debts can be pursued against personal assets.
Who Its For
Solo freelancers, consultants, and remote workers operating independently, including many digital nomads.
Social Security
Contributions are now based on real net monthly income (a 2023–2026 phase-in of income-based RETA bands). A reduced flat rate applies for new registrants for the first 12 months, extendable in some cases, before shifting to income-based bands.

Setup

Speed
Can typically be operational within a day or two once you have an NIE (Foreigner ID Number), which non-EU citizens generally need plus a self-employment residence authorization before starting activity.
Process
Registration with the Agencia Tributaria (Modelo 036/037) and with Social Security's self-employed scheme (RETA); no notary or company registry step needed.
Minimum Capital
None required.

Taxation

VAT
Same 21% standard VAT applies where the activity is VAT-liable, filed quarterly via Modelo 303, alongside quarterly IRPF instalments via Modelo 130.
Income Tax
Personal income tax (IRPF), progressive, roughly 19% up to 47% depending on income level and region.

Filing Obligations For A Spanish Company

  • Modelo 200
    Purpose
    Annual corporate income tax return
    Deadline
    Filed within 25 calendar days after the 6 months following the end of the fiscal year — for a standard calendar-year company this typically falls around late July.
  • Modelo 202
    Purpose
    Quarterly advance/instalment payments toward corporate tax
    Deadline
    April, October and December, generally calculated as a percentage of the prior year's tax liability.
  • Modelo 303
    Purpose
    Quarterly VAT (IVA) return
    Deadline
    Filed within 20 days after each quarter closes.
  • Modelo 111
    Purpose
    Quarterly withholding tax return on employee salaries and professional fees paid by the company
  • Modelo 347
    Purpose
    Annual declaration of operations exceeding EUR 3,005.06 with any single client or supplier
  • General Note
    Companies must also keep formal accounting records under Spain's Plan General de Contabilidad and file annual accounts with the Registro Mercantil, separate from the tax filings above.

Incorporation Process And Requirements

Recommended Structure
Sociedad Limitada (S.L.) — Spain's standard limited-liability company, the structure used by the large majority of foreign founders. Autónomo (sole trader/self-employed registration) is a faster, no-capital alternative but carries unlimited personal liability and is generally used by solo freelancers rather than for a formal incorporated business.
Scope Note
Company incorporation in Spain is governed by national law (Ley de Sociedades de Capital, and the 2022 Crea y Crece reform). There is no Valencia-specific incorporation regime; a founder in Valencia follows the same national process but files with the provincial Registro Mercantil de Valencia and can use any CIRCE-affiliated PAE (Punto de Atención al Emprendedor) located in the city.
Ongoing Obligation Note
A director who owns 25% or more of the company's shares (or 50%+ in a family-owned company) is classified as an 'autónomo societario' and must register with RETA (Social Security self-employed regime), which carries a monthly contribution (roughly €310-370/month standard rate, or a reduced flat rate for new registrants in year one) — this applies even to non-resident directors managing the company remotely, except in specific posted-worker (Form A1) cases.

Key Requirements

  • A NIE (Número de Identidad de Extranjero) is mandatory for every individual foreign shareholder and director before the notary can sign the incorporation deed. If a shareholder is itself a foreign company, that entity needs a separate Spanish NIF instead.
  • A Spanish registered office address for the company.
  • At least one director; the founder can also act as director.
  • Non-EU founders who intend to personally live and work in Spain (rather than just own/direct the company remotely) separately need an appropriate immigration/residence authorization — owning the S.L. itself does not require one.

Fast Track Option

Name
CIRCE / PAE online system
Detail
For a standard S.L. with no custom bylaws, the CIRCE system (Centro de Información y Red de Creación de Empresas, accessed via a PAE — Punto de Atención al Emprendedor — or directly at circe.es) bundles name reservation, notary scheduling, registry filing, and tax/Social Security notification into one electronic Documento Único Electrónico (DUE) submission.
Limitation
CIRCE does not obtain the NIE for you — foreign shareholders must already have theirs before starting.
Estimated Time
5-10 working days end to end (occasionally faster for very simple sole-shareholder SLUs)

Realistic Timeline

Bottlenecks
The two biggest delays are almost always the NIE appointment/processing time and the bank account opening; the notary and registry steps themselves are fast once those two are resolved.
Standard Route
4-8 weeks from first NIE application to final registration for a non-resident foreign founder, with sources ranging as low as 2-4 weeks (if NIE and bank account are handled quickly) up to 4-8 months in more complex non-resident cases involving apostilles and cross-border coordination.
Fast Track Via Circe
As little as 5-10 working days, or occasionally 1-2 weeks, once NIEs are already in hand and standard bylaws are used.

Incorporation Steps

  • Obtain NIE for All Foreign Shareholders/directors
    Step
    1
    Detail
    Apply via a Spanish consulate abroad (Form EX-15) or at a Comisaría de Policía in Spain (Form EX-18), with passport and the Modelo 790-012 fee slip.
    Estimated Time
    2-6 weeks depending on consular/appointment availability; can be done via notarized Power of Attorney if the founder cannot travel.
  • Reserve the Company Name
    Cost
    €22
    Step
    2
    Detail
    Request a Certificación Negativa de Denominación Social from the Registro Mercantil Central, proposing several name options in order of preference.
    Estimated Time
    1-3 business days
  • Open a Corporate Bank Account and Deposit Capital
    Step
    3
    Detail
    Open an account in the company's name and deposit the chosen share capital; obtain the bank certificate of deposit.
    Estimated Time
    Same day to a few days once NIE and name certificate are in hand
  • Draft Bylaws and Sign the Deed of Incorporation Before a Notary
    Cost
    €500
    Step
    4
    Detail
    The notarial deed (escritura de constitución) covers company name, registered address, bylaws, share capital and administrator appointment; the notary issues a provisional NIF.
    Estimated Time
    1 day for the signing itself, once documents are ready
  • Register with the Registro Mercantil (Mercantile Registry)
    Cost
    €250
    Step
    5
    Detail
    The notary forwards the deed to the provincial Mercantile Registry (in Valencia's case, the Registro Mercantil de Valencia), which issues the definitive NIF.
    Estimated Time
    5-15 business days
  • Tax and Social Security Registration
    Step
    6
    Detail
    File Modelo 036 with the Agencia Tributaria (tax office) for VAT/corporate tax registration, and register with Social Security (TGSS) — including RETA autónomo-societario registration for a director holding 25% or more of shares.
    Estimated Time
    A few days, often processed alongside registry filing

Minimum Share Capital

Legal Minimum
€1.00

Since the 2022 Crea y Crece law (Ley 18/2022), an S.L. can legally be formed with €1 of share capital, but until the company's equity reaches €3,000 it must allocate 20% of annual profit to a legal reserve and cannot pay dividends that would drop net assets below €3,000.

Commonly Used Amount
€3,000

€3,000 remains the traditional and most commonly used capitalization to avoid the reserve/dividend restrictions and to present more credibility to banks and partners; several formation guides still cite it as the practical standard.

Capital Deposit Requirement
The share capital must be deposited into a Spanish bank account opened in the company's (in-formation) name before the notary signing; the bank issues a certificate confirming the deposit, which the notary requires.

Local Partner Or Sponsor Mandate

Detail
Spain does not require a local partner, local shareholder, or sponsor for company formation. Foreign entrepreneurs can own 100% of a Spanish S.L., act as sole shareholder and sole director (this single-owner form is called an SLU, Sociedad Limitada Unipersonal), and there is no residency requirement for shareholders or directors.
Required
No

Typical Total Cost Official Fees Only

Low
€515
High
€1,020
Note
Covers name certificate, notary, and registry fees for a straightforward S.L. with standard bylaws. Excludes share capital itself and any legal/gestoría fees.

Typical Total Cost With Legal Or Gestoria Support

Low
€1,500
High
€3,000
Note
Many foreign founders use a lawyer or gestoría for Power of Attorney drafting, translations, and handling remote signings; fees vary widely by firm and complexity.

Scope Note

Covers local business tax implications for a foreign-owned company and the freelancer vs. company structural choice. Corporate tax (Impuesto sobre Sociedades) is a Spanish state-level tax administered by the Agencia Tributaria — it applies identically in Valencia as anywhere else in Spain; there is no separate Valencia city or Comunitat Valenciana surcharge on the corporate tax rate itself.

AI-generated estimateData refreshed July 2026

This section has no cited sources.

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Data last updated July 2026 · Verify anything important.