Setting Up an SL for a Property Deal: Steps, Timing, Costs

A sociedad limitada (SL, Spain's private limited company) for buying property in Spain can be set up in eight steps: get an NIE, reserve a name, pay in the capital, approve the articles of association, sign the escritura (public deed) before a notary, register the company at the Registro Mercantil (commercial registry), get a permanent NIF and open an account. For the electronic format the law sets deadlines in hours, but in practice the longest part is not the registration but preparing documents and the bank.

Which steps a non-resident goes through

1. NIE (foreigner's tax ID) for every founder and administrator. Without it the notary will not sign the deed; details in the article about the NIE.
2. Name. The Registro Mercantil Central issues a certificación negativa de denominación, confirmation that no such name exists. For electronic formation through CIRCE (the online business-formation system) with standard articles, it must be issued within 6 working hours (art. 15 Ley 14/2013 as worded by art. 5 of Ley 18/2022).
3. Articles of association. Their content is set by art. 23 of the Ley de Sociedades de Capital (LSC): name, business purpose, address, capital and shares, governing bodies, voting rules.
4. Capital. The money is paid into the company's account, and the notary receives a bank certificate of payment (art. 62 LSC). In an SL the founders may instead declare in the deed that they are jointly liable for the reality of the contributions (art. 62.2). How much to pay in is covered in the article on share capital.
5. Escritura. Formation requires a public deed and its entry in the registry (art. 20 LSC), and the company acquires legal personality with the entry (art. 33 LSC). You can sign through a power of attorney, see poder notarial.
6. Registration. The documents are filed for inscripción (registry entry) within two months of the date of the deed (art. 32 LSC).
7. NIF. Until the company is entered in the registry, the Agencia Tributaria issues a provisional NIF to a company in formation. The permanent one is issued once a copy of the deed, the articles and proof of registration are provided; they must be filed within a month after the registry entry (art. 24.3 RD 1065/2007).
8. Company account. The bank runs its own check under Ley 10/2010; see the article on AML when buying property.

How long it takes: what the law says and what practice shows

If the SL is formed electronically through CIRCE with standard articles, the date of signing at the notary is set no later than 12 working hours from the start of the procedure, and the registry entry is made within 6 working hours (art. 15 Ley 14/2013 as worded by Ley 18/2022). With custom articles the law gives 6 working hours for the preliminary entry and 5 days for the final one (art. 16), and sets no deadline for the notary. These are deadlines for the standard case, and they do not include collecting documents, translation and apostille for foreign founders, or opening the account.

If one of the founders is a foreign company, the fast standard route usually does not fit: the entity's documents have to be legalised and translated, and the timeline is counted by the abogado for the specific structure, not by the law.

How much it costs: a calculation from the fee schedules

Official fees for electronic formation of an SL are set by Real Decreto 1612/2011: the notary charges €150 for everything, the registry €100. The conditions: none of the founders is a legal entity, capital is no more than €30,000, and management is by a sole administrator, several joint-and-several administrators or two joint administrators. If capital is no more than €3,100 and the articles follow the standard model approved by the Ministry of Justice, the fees are €60 at the notary and €40 at the registry.

Worked example, not a forecast: one individual founder, capital €3,000, standard articles. By the fee schedule that is 60 + 40 = €100. If the founder is a company or custom articles are needed, the fee is calculated on the general scale, and the figure is higher. This excludes the gestoría (administrative agent), translation and apostille, the power of attorney and bank charges.

Tax on the formation deed itself: under art. 45.I.B.11 TRLITPAJD, the formation of a company and increases of capital are exempt from ITP and AJD. Check with your asesor fiscal (tax adviser) that this applies to your structure.

What to decide before signing

1. Who will be the socio (member): you personally, a holding or two participants. The fee, the documents and the decision-making procedure depend on it; the structure of the SL when buying is worth discussing in advance.
2. Who will be the administrador and whether they can be paid: a question for an abogado de extranjería (immigration lawyer) if you plan to apply for residency, see the article on residency after the golden visa.
3. The business purpose in the articles: it should cover buying, renovating, selling and letting.
4. Who is liable for what: that is covered by the agreement between the participants.

When you do not need an SL

An SL is not mandatory. If there is one property, the term is short and you do not plan to bring in partners, buying as an individual may be simpler; the formats are compared in the article on buying through an SL or as an individual. A company gives you a separate legal entity and corporate income tax on its profit, but adds bookkeeping, annual accounts and the duty to file documents with the registry. Those are ongoing costs, not a one-off formation fee.

The next step: estimate the full project budget in the calculator and go through the ownership structure with an abogado. Which ownership form stands behind a DNPI project is fixed by the contract for that specific project; ask about it before signing.