Most common business entity in Spain
The Sociedad Limitada (SL) is the standard choice for most small- to mid-size businesses in Spain. Like a US LLC, it provides limited liability protection separated from the owners' personal assets. New start-up companies get 15% rate for first two profitable years.
The full menu of Spain business structures
| Structure | Liability | Tax | Best for |
|---|---|---|---|
| Sociedad Limitada (SL) | Limited | 25% corporate | Most operating businesses |
| Sole proprietor / self-employed | Unlimited personal | Personal income tax rates | Freelancers, one-person services |
| Partnership | Joint and several | Pass-through to partners | Professional services (law, accounting) |
| Branch of foreign company | Parent company liability | 25% on Spain-source profits | Foreign companies entering Spain market |
| Public limited company | Limited | Same as Sociedad Limitada (SL) but stricter | Companies preparing for listing |
Which one should you pick?
- Freelance or one-person service in Spain? Self-employed structure if simple, Sociedad Limitada (SL) if you want liability protection.
- Software / e-commerce / agency? Sociedad Limitada (SL) — standard, scalable.
- Operating an existing foreign company in Spain? Branch (simpler) or subsidiary Sociedad Limitada (SL) (more substance).
- Planning to raise venture capital? Confirm investors accept Spain entities. Many require a US Delaware C-Corp flip — see US company formation.
- Holding company for IP or other companies? Sociedad Limitada (SL) with minimal substance requirements.
The Sociedad Limitada (SL) in one paragraph
Sociedad Limitada (SL) is Spain's primary limited liability vehicle. Minimum paid-up capital: $3,000. Headline corporate tax: 25%. 23% for SMEs (revenue < €1M from 2025). New companies 15% first 2 profitable years.. Banking accessibility: 8/10. Privacy: 4/10 (UBO non-public). Remote formation: in-person typical. Processing time: 10 business days.
For US comparison, see Spain vs USA. For non-resident formation specifics, see forming a Spain company as a non-resident.