Company Incorporation in Mallorca

• An S.L. is a legal structure widely used in Spain for small and medium-sized enterprises due to its flexibility and liability protection.
• It can be established by EU citizens as well as non-EU nationals.
• The administrator must apply for an N.I.E. (Foreigner Identification Number).

• Minimum share capital: €3,000, which must be deposited before signing the public deed.
• Availability of share capital: The capital can be used after the company is registered in the Commercial Registry.
• Required documents:
  • A minimum of three name proposals.
  • Certified personal identification and, if applicable, notarized and apostilled powers of attorney.

• Standard process: 1 to 2 months, including name reservation and commercial registry registration.
• Fast-track option: Pre-established companies (shelf companies) are available within 48 hours and come with deposited share capital.

No, the incorporation or transfer can be carried out through a proxy with a notarized and apostilled power of attorney.

Yes, under EU regulations, an S.L. can operate in any member state without additional restrictions.

• Limited liability: The liability of shareholders is restricted to the share capital.
• Asset protection: An S.L. can protect assets such as properties by shielding them from creditors’ personal claims against shareholders.

• Inactive S.L.: Such a company does not carry out business activities but can own assets such as properties.
• Holding S.L.: It does not engage in commercial activities to ensure asset protection.
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• Privacy: The real owner does not appear in the Land Registry, only the S.L.
• Tax savings:
  • Selling the shares of an S.L. does not trigger property transfer tax, unlike a direct property sale.
  • In case of a sale, capital gains tax on the property’s appreciation is avoided.
• Asset protection: Assets held within an S.L. are safeguarded from personal liens.
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• The seller transfers the S.L.’s shares to the buyer.
• This method reduces notary fees and eliminates taxes such as transfer tax.

Corporate tax ranges from 20% to 35%, depending on the company’s size and applicable deductions.

• Inheritance tax: S.L.s are not subject to inheritance tax since the company itself does not “die.” Heirs only need to transfer the shares.
• Income tax: Selling S.L. shares allows for tax savings compared to the direct sale of a property.

• S.L.N.E.:
  • Designed for entrepreneurs and small businesses with faster and simplified processes.
  • Restrictions:
    • The name must include a founding shareholder’s surname and a number.
    • Share capital must be between €3,012 and €120,202 and cannot include real estate.
    • Maximum of five founding shareholders.
  • Advantages: Simplified accounting procedures and tax benefits.
• S.L.:
  • No restrictions on the number of shareholders, name, or maximum capital.
  • Can own real estate and other assets.
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• Direct property sale: 5% of the sale price is withheld as a tax prepayment.
• Sale of S.L. shares: This withholding does not apply when selling the shares of an S.L. owning the property.

A Spanish S.L. is not subject to the restrictions of German competition law and can use advertising strategies such as discounts and comparisons without limitations.