Introduction

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

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

Reasons to invest in Spain with an SL

The benefits of SL 

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

• The first is a flat tax rate of 25%, compared with a progressive tax rate (up to 47%) for residents in their own name(IRPF). A nuance here: 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 being taxed at 25%, whereas in your own name, IRNR applies at 19% (EU/EEA) or 24% (non-EU) on gross income, with very few deductions possible. 
• The possibility of deducting expenses (loan interest, fees, depreciation, work, etc.).

Tax status	Proper name	SL	Deductions possible in your own name	Deductions available via SL
IRPF resident	Progressive IRPF up to 47%.	25% IS	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 several people to buy together with their own legal personality.
• Transfer and resale are simplified (transfer of shares).
• Another point: buying in SL is often a sign of confidence for Spanish banks if you're looking to obtain a bank loan.
• Setting up a patrimonial company can avoid or reduce wealth tax (Impuesto sobre el Patrimonio), as the assets are transferred to the company.

Terreta Council : 

• The SL becomes attractive from €35,000 to €40,000 in annual profits. Below this threshold, the simplicity and tax advantages of the purchase are often preferable. 

Real estate cases where SL is relevant

• Planning to buy several properties
• You are planning a structured resale in the medium term
• You want to invest with others (family, associates or partners)
• Anticipating the transfer of assets

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 

Beware: setting up an SL involves : 

• Annual management fees: accounting, filing of accounts, tax. 
• An obligation of transparency: even if there is no activity, annual filing of accounts is compulsory. 
• Risks of double taxation on dividends, mitigated by tax treaties (e.g. France-Spain).

Setting up an SL: the key stages

Step 1: Reserve your company name

For your company name, apply online on this page of the Central Mercantile Registry.

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

You can propose up to 5 names. 

This formality costs around 15 euros. 

Terreta tips to save time at this stage: 

• Avoid choosing a name that is too generic, as these are often rejected.
• Choose more than one word
• Adding a number is useless
• Adding the name of a town doesn't provide any legal differentiation
• Using domain names (.es, .com) is prohibited
• Acronyms and anagrams are forbidden
• Insufficient combination of numbers and letters
• A phonetic resemblance to an existing company name may lead torejection.

Step 2: Open a business bank account

It makes sense to open a corporate account, especially if there are several of you investing. 

• To do this, you need to deposit your company's share capital. Until recently, the minimum share capital was set at €3,000, but the Ley Crea y Crece law of 2022 now allows a share capital of €1 to boost business start-ups. 
• The bank will provide you with a certificate of deposit to present to the notary.

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

The traditional banks, those "de toda la vida" : 

• Caixa
• Sabadell
• Bankiter
• BBVA

But also : 

• Finom, one of the best valued in 2025 according to El Economista. 
• Fintech Vivid came second in their ranking. 
• And best of all: Quonto, the perfect online bank for combining efficiency and ease of management. It's ours at Terreta Spain, and we recommend it 100%. 

Step 3: Draw up the articles of association

Now it's time for an essential step: drafting the Articles of Association. These define the company's operating rules, and must be presented to a notary before being filed with the Registre du Commerce.  

Please include : 

• The name of the company (with the mention S.L.) and the certificate of availability of the name.
• The registered address and how to change it.
• Corporate purpose: you'll need to detail your business activity to obtain the necessary authorizations.
• The amount of share capital.
• Distribution of shares among associates, transfer procedures (and later, the arrival of new associates or the death of an associate).
• The type of management chosen: single director, several, or board.
• Executive compensation.
• Profit distribution rules (reinvestment, distribution).
• Causes of dissolution and liquidation procedures.

Terreta's advice: draw up customized articles of association with a professional like Felix Delaguia Luzón, a multilingual law firm based in Valencia. It specializes in commercial law.

If you prefer to do it yourself, you can find a model bylaws here.  

Step 4: Sign the deed of incorporation before a notary

On that day, you must provide the notary with : 

• Bylaws drawn up.
• Company name certificate.
• Bank certificate.
• Member identification documents

The notary will check the legality of the documents and proceed with the official registration of your SL: La Escritura de laConstituciónde laCompañíaMercantil de Responsabilidad Limitada : "XXX S.L".

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

You must register with the tax authorities(Agencia Tributaria) by completing the form 036. You will then receive a provisional NIF (Tax Identification Number).

Step 6: Registration in the Commercial Register

This is the ultimate step in giving your SL full legal existence. 

Legal deadline: after signing the articles of association, you have a maximum of 2 months to register the company with the Registre du Commerce.

Step 7: Social Security registration

This is compulsory for the manager and for all active partners. You can do so via this official link by filling in this PDF. 

Step 8: obtaining the digital certificate

The certificado digital is an electronic document required for all online procedures. It enables a person or company to be identified in a secure manner.

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

Timescales & tips Terreta: Typical timescales: allow between 15 days and 2 months to create your SL. You can speed up the process via the PAE (Punto deAtenciónal Emprendedor) on the official CIRCE portal, which centralizes all the formalities in a single document (Documento Único Electrónico). If you have a certicado digital , you can complete the formalities yourself online. Otherwise, go through a PAE advisor (in person). A capital of €1 is legally sufficient, but not recommended for banking purposes 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 recommend to save time, especially if you're not fluent in Spanish.

Useful link: contact theCentro de Información y Red de Creación de Empresas (CIRCE) here.