SETTING UP A LIMITED COMPANY IN THE CANARY ISLANDS
In this case we are going to explain how to set up a limited company in the Canary Islands. We will approach it in a generalised way, as there are other ways of setting up a company that must be done in a personalised manner, taking into account legal and fiscal reasons and the ways and amount to be contributed in order to establish the company’s share capital.
It is necessary to be clear from the beginning about the number of partners that the company will have and who will act as its administrator.
In the case of foreigners who are going to make an investment in the Canary Islands for the first time, they must apply for a tax identification number, as this is the first step they must take in order to set up a limited company or any other type of investment.
STEPS TO FOLLOW
1.- Obtain the name of the company.
This name is requested from the Mercantile Register by means of an application that can be made online. Five different names must be provided in the application and the registry office will approve one of the five names provided as the company name. The name must be requested by one of the partners who will belong to the company. It should be clarified that the trading name of the company could be different from the company name in the Commercial Register.
2.- Contribution of Share Capital.
Establishing the amount of 3006 euros, an account must be opened in a bank for this amount, providing the certificate of the company name provided by the commercial register, the name and identification of each partner and the percentage of shares held by each one in the company.
3.- Incorporation of the company at a notary office.
It is necessary to go to the notary to draw up the deed of incorporation of the company. In this deed the address of the company, the share capital, the number of shareholders, the shares held by each shareholder in the company, the administrator and the articles of association of the company, in which the main economic activity is reflected, as well as the rules of the company’s internal regime and administration, are reflected.
The company’s articles of association are very important from a legal and fiscal point of view, as the future development of the company depends on them.
4.- Obtaining the company’s provisional Tax Identification Number.
This action consists of obtaining a provisional number that identifies the company for tax purposes and, once certain formalities have been carried out in the commercial register, the same number can be obtained, but now as a definitive number.
5.- Presentation of the deed of incorporation of the company in the commercial register.
Prior to filing, a tax form (form 600) must be submitted to the Local Treasury of the Canary Islands Government. Once this form has been submitted, it must be attached to the deed of incorporation signed at the notary’s office and all documentation must be submitted to the commercial register. If everything is in order, the company will be registered within one month.
6.- Tax formalities
Once the company has been registered in the commercial register, it will be necessary to register its economic activity at the Tax Office by means of a tax form to be filled in. On the other hand, it will have to be registered with the local tax office of the Canary Islands Government for the purposes of the Igic (Canary Islands General Indirect Tax).
In general, these are the steps to follow in the incorporation of a commercial company in the Canary Islands. Obviously each case may have certain fiscal and legal peculiarities that must be studied in a more exhaustive manner.
We will be happy to advise you on the correct and effective way to set up your company in the islands.