Creating a Sociedad Limitada (SL) in Spain for your real estate investments

Introduction

The Sociedad de responsabilidad Limitada is the most widely used type of company in Spain. There are around 1 million active SLs in the country (INE). These are companies created and managed by entrepreneurs or asset investors.

The SL is easy to set up, the formalities are inexpensive, it secures your investments, simplifies their transfer and offers the guarantee of limited liability: your personal assets are protected, only the capital committed at the time of incorporation of the company is at risk.

Reasons to invest in Spain with an SL

The advantages of the SL 

So, what are the advantages of this type of structure when investing in Spanish real estate?  

• The first is a fixed tax rate of 25%, compared to a progressive tax (up to 47%) in your own name for residents (IRPF). A nuance on this point: if the owners of the company pay themselves dividends, they are subject to IRPF. 
• For non-residents (IRNR): the SL allows you to deduct all expenses (interest, work, depreciation, etc.) before taxation at 25%, whereas in your own name, the IRNR applies at 19% (EU/EEA) or 24% (outside the EU) on gross income, with very few possible deductions. 
• The possibility of deducting expenses (loan interest, fees, depreciation, works…).

Tax status	Sole proprietorship	SL	Possible deductions as a sole proprietor	Possible deductions via SL
Resident IRPF	Progressive IRPF up to 47%	IS 25%	Yes, but limited	Numerous
Non-resident IRNR	IRNR 19% or 24% on gross income	IS 25% on net profit	Very limited and none outside the EU	Numerous

• It allows multiple parties to purchase with their own legal personality.
• Transfer and resale are simplified (transfer of shares).
• Another point: buying through an SL is often seen as a sign of confidence by Spanish banks if you are looking to obtain a bank loan.
• The creation of an asset holding company can avoid or reduce Wealth Tax (Impuesto sobre el Patrimonio), as the assets are transferred to the company.

Terreta Tip: 

• The SL becomes attractive from €35,000 to €40,000 of annual profit. Below this threshold, the simplicity and tax benefits of direct purchase often remain preferable. 

Real estate scenarios where an SL is relevant

• You plan to buy several properties
• You are considering a structured resale in the medium term
• You want to invest with multiple parties (family, associates or partners)
• You anticipate an estate transfer

Terreta Tip: an SL is not effective for a primary or secondary residence, or if you wish to withdraw all profits for immediate personal use (taxed dividends).

Warning 

Be aware that launching an SL entails: 

• Annual management fees: accounting, filing of accounts, taxation. 
• An obligation of transparency: even without activity, the annual filing of accounts is mandatory. 
• Risks of double taxation on dividends, mitigated by tax treaties (e.g., France-Spain).

Setting up an SL: the key steps

Step 1: Reserve your company name

For your company name (the name of the company), submit your request online on this page of the Registre Mercantil Central.

Good news, if you don't speak Spanish, the page is accessible in English. 

You can propose up to 5 names. 

The cost of this formality is around fifteen euros. 

Terreta tips to save time at this stage: 

• Avoid choosing a name that is too generic; they are very often rejected.
• Choose more than one word
• Adding a number is useless
• Adding the name of a city does not provide legal differentiation
• Using domain names (.es, .com) is prohibited
• Acronyms or anagrams are prohibited
• Combinations of numbers and letters are insufficient
• A phonetic resemblance to an existing company name may result in rejection

Step 2: Open a professional bank account

Logically, it is necessary to open a company account, especially if several of you are investing. 

• To do this, a deposit of the share capital must be made. Until recently, the minimum share capital was set at €3,000, but the Ley Crea y Crece of 2022 now authorizes a share capital of €1 to boost business creation. 
• The bank will give you a deposit certificate to provide to the notary.

Which bank should you choose for your SL? Here is our advice. 

Traditional banks, those “de toda la vida”: 

• Caixa
• Sabadell
• Bankiter
• BBVA

But also: 

• Finom, one of the best-rated in 2025 according to El Economista. 
• The fintech Vivid is in second position in their ranking. 
• And the best for last: Quonto, an online bank perfect for combining efficiency and simplicity of management. It's our go-to at Terreta Spain; we recommend it 100%. 

Step 3: Draft the articles of association

Let's move on to an essential step: drafting the articles of association. They define the operating rules of a company and must be presented to a notary before being filed with the Commercial Registry.  

You will need to include: 

• The company name (with the mention S.L.) and the certificate of availability of the name.
• The registered office and the procedures for changing it.
• The corporate purpose: you will need to detail the activity to obtain the necessary authorizations for its exercise.
• The amount of the share capital.
• The distribution of shares between the partners, the terms of transfer (and later, the arrival of new partners or the death of a partner).
• The type of management chosen: sole administrator, several, or board.
• The remuneration of the managers.
• The rule for profit sharing (reinvestment, distribution).
• The causes of dissolution and the liquidation procedures.

Terreta's advice: draft tailor-made articles of association with a professional such as Felix Delaguia Luzón, a multilingual law firm based in Valencia. They specialize in commercial law.

If you prefer to take care of it yourself, find a template of articles here.  

Step 4: sign the deed of incorporation before a notary

On that day, you will need to provide the notary with: 

• The drafted articles of association.
• The certificate of incorporation.
• The bank certificate.
• The identity documents of the partners

The notary will verify the legality of the documents and proceed with the official registration of your SL: La Escritura de la Constitución de la Compañía Mercantil de Responsabilidad Limitada : “XXX S.L”

Step 5: Register with the tax authorities (Agencia Tributaria)

You must register for taxes (Agencia Tributaria) by completing form 036. You will then receive a provisional NIF (Tax Identification Number).

Step 6: Registration in the Commercial Registry

This is the final step to give your SL full legal existence. 

Legal deadline: after signing the articles of association, you have a maximum of 2 months to register the company in the Commercial Registry.

Step 7: Affiliation to Social Security

This is mandatory for the manager and any active partner. You can do this via this official link by completing this PDF. 

Step 8: Obtaining the digital certificate

The certificado digital is an electronic document required for all online procedures. It allows a person or company to be identified securely.

• The certificate is requested from the Fábrica Nacional de Moneda y Timbre. Find the dedicated page here and follow the steps. 

Terreta deadlines & tips: Typical deadlines: allow between 15 days and 2 months to create your SL. You can speed up the process via the PAE (Punto de Atención al Emprendedor) from the official CIRCE portal, which centralizes all the procedures in a single document (Documento Único Electrónico). If you have a certificado digital you can take care of the procedures yourself online. Otherwise, go through a PAE advisor (in person). The capital of €1 is legally sufficient, but not recommended from a banking perspective. Overall cost of the operation: €400 to €600 depending on the file. Up to €900 if you use a gestor (an administrative manager), which we strongly advise you to do to save time, and even more so if you are not comfortable in Spanish.

Useful link: contact here the Centro de Información y Red de Creación de Empresas (CIRCE)