FAQs
FAQs
Can you pay for a stake in a Spanish limited company (SL) in two instalments through a capital increase?
Not within the same capital increase. In a Spanish SL (Sociedad Limitada, private limited company), new shares – both nominal value and share premium – must be paid up in full when the increase is executed (art. 78 LSC). To invest in tranches, you carry out two successive capital increases or combine a first equity tranche with a convertible or participating loan, all governed by a shareholders' agreement.
Last updated: 22/10/2026 · Commercial transactions
What is the best way to invest in a Spanish SL: through a Spanish company or a UK company, and via a capital increase or a loan?
For a meaningful stake, investing through a Spanish SL via a capital increase is usually preferable. With at least 5% held for one year, future dividends and capital gains are 95% exempt (art. 21 LIS). Investing through a UK company means Spanish non-resident withholding tax, a review of UK tax treatment and filing form D-1A.
Last updated: 22/10/2026 · Commercial transactions
What penalties and costs does a hospitality business in Spain face if it cannot prove how tips were shared out among staff?
If the business cannot prove the tips were paid to staff, the Spanish Tax Agency (Hacienda) may treat them as sales: 10% VAT, Impuesto sobre Sociedades (Spanish corporation tax), interest and a penalty of 50% to 150%. If the distribution is proven, the cost is limited to IRPF withholding (Spanish income tax) and Social Security contributions, which are reduced by voluntarily correcting the position before any formal request from the authorities.
Last updated: 20/10/2026 · Tax inspections
How are tips taxed in Spain when a restaurant or bar collects them and shares them out among staff?
Voluntary tips are not part of the taxable base for Spanish VAT (IVA). If they are passed on in full to staff and recorded as a liability to employees, the effect on Corporation Tax is neutral. For the employee they are employment income: if the business collects and distributes them, they must go through payroll with tax withholding and social security contributions.
Last updated: 19/10/2026 · Business accounting
Is it mandatory to provide the minimum share capital of €3,000 in the incorporation of limited companies?
In the constitution of companies, specifically in limited companies, and based on the regulations of article 62.2 of the Capital Companies Law, it is currently not necessary to prove the contribution of the share capital, if the shareholders are jointly and severally liable to creditors for the reality of them.
Last updated: 20/03/2022 · Incorporation of companies