Running an SL, or Sociedad Limitada, company in Spain comes with various responsibilities, primarily for the company's director, known as the administrator.
Understanding these formalities is crucial for compliance and long-term success.
The role of the director
The director serves as the primary representative of the company before authorities and third parties.
They are responsible for ensuring the company meets its registration, accounting and administrative obligations.
If the appointed director is not resident in Spain, they may need to designate a representative through a notarised power of attorney to liaise with Spanish tax authorities.
In small businesses, the director is often also one of the shareholders and, in many cases, also performs operational work in the company.
The same person may wear multiple hats:
- Shareholder: contributing capital to the company.
- Administrator: overseeing tasks such as approving annual accounts and managing bank accounts.
- Worker: participating in daily operations such as marketing, customer service and management.
Social Security and payroll obligations
Unless proven otherwise, it is often assumed that the director also works for the company.
For this reason, the director may need to contribute to Social Security under the Special Regime for Self-Employed Workers.
The director's position can be unpaid, because there is no automatic obligation to receive a salary, or remunerated.
However, Social Security contributions may still be required depending on the director's role, residence and control of the company.
If the director is non-resident, the company's representative or local structure should be reviewed carefully.
If the director receives a salary, the company must withhold income tax and pay it to the authorities through the relevant payroll and tax filings.
Formal obligations of the company
In addition to fulfilling personal obligations, the director must ensure that the company complies with its own obligations.
As the economy becomes increasingly global and digital, companies face new informational, software and procedural requirements.
Accounting and bookkeeping obligations
Companies must maintain accurate records of their business transactions, including:
- a list of issued invoices,
- a list of received invoices and fixed assets, and
- bank account reconciliations.
Digital invoicing and VeriFactu
Spanish invoicing obligations are changing.
The B2B electronic invoicing system and VeriFactu are separate but related digitalisation projects.
VeriFactu focuses on the integrity and traceability of invoice records and is expected to become mandatory in 2027 under the delayed timetable.
B2B electronic invoicing will follow its own gradual implementation calendar once the detailed regulatory timetable is fully in force.
In practice, companies should already be preparing by using reliable invoicing and accounting software capable of managing structured, traceable records.
Corporate tax
Corporate profits are subject to Spanish corporate tax.
The applicable rate depends on the company and activity. Common reference rates include:
- 25% as the general corporate tax rate.
- 23% for certain companies with economic activity and turnover below the applicable threshold.
- 15% for qualifying newly created companies with economic activity during their first two years of profitability, if additional requirements are met.
Besides corporate tax, other taxes may apply depending on the company's circumstances, including VAT, withholdings, payroll-related filings and local taxes.
Reporting obligations
Depending on the volume and nature of activity, the company may be required to report on movement of goods within Europe, business volume with other entities or transactions with foreign countries.
In any case, the company must submit its annual accounts each year to the Mercantile Registry.
Why professional support matters
It is essential for companies to partner with an expert in accounting and management who understands these obligations and can help navigate the system efficiently.
For digital, international or owner-managed companies, the real challenge is usually not one single filing, but keeping tax, payroll, accounting, software and reporting obligations aligned month after month.
Ask Limit about SL formalities