FAQ - Frequently Asked Questions
The capital for an S.A. (sociedad anónima), the equivalent of a corporation, is €60,000 and you must contribute at least 25%.
The capital for an S.L. (sociedad limitada) the equivalent of a limited liability company is €3,000 and must be paid in full. An SL can be formed by a single partner holding 100% of the capital. In this case the acronym that will appear in the company name will be S.L.u.
No. There is no such thing as a simplified limited liability company.
Yes, it is possible, but you must have the NIE (número de identificación extranjeros). In the case of a ZEC company, one of the fundamental requirements is to have one of the directors resident in the Canary Islands.
No, only if you are resident in Spain are you obliged to pay contributions to the Seguridad Social (the equivalent of INPS in Italy).
Following all the steps to obtain the necessary documents and having established in time the contents of the memorandum and articles of association, if any, in 30 days the company is operational and this, of course, is possible only if you are followed by a professional consultant or if you know perfectly the matter. If not, the timeframe may be longer.
- Certificate with the name (company name) of the constituent company
- Members’ personal documents
- Payment of the share capital to a current account in the name of the company being incorporated (with the certificate referred to in point 1.) which will be blocked until the registration of the notarial deed of incorporation
- Draft of the articles of incorporation and association
Post incorporation, communications and registrations must be made to the government, which the accountant or tax advisor will take care of.
Yes, of course. It is necessary to sign a power of attorney in front of a notary in favor of a third person who will sign the notarial deed in Spain for the incorporation of the company. The authorization will need to be translated and sworn in.
First, documentation proving a legitimate source of the funds that will be deposited into the account, as well as personal documents of the prospective owner or director of the company.
It always depends on the amount of documents that need to be submitted, we can certainly say that the average costs are lower than those to which we are accustomed in Italy.
Yes, you only need your passport and documents proving your residence in the country of origin and the origin of the funds you will be paying. Each bank has a different verification system in compliance with anti-money laundering laws.
There is no VAT, the Canary Islands are an ex-VAT territory, i.e. outside the VAT territory, like San Marino, the Vatican, Campione d’Italia and very few other territories that are geographically within the European Union and have the Euro as their official currency. We are in Spain, but we do not apply VAT, but an entirely similar tax, the IGIC.
It is a tax very similar to VAT but which is only applied in internal trade of goods and services and the ordinary rate is 7%, but if we sell goods or services outside of the Canary Islands it is not applied, so there is a total exemption from indirect taxes, neither VAT nor IGIC.
In general, labor costs in Spain are cheaper than in Italy, partly because taxes and contributions are lower.
Of course, that’s what we’re here for, to take care of all the paperwork from the get-go.
It can range from 0 to an annual 20%, on average let’s say it comes in pretty easily at 7% or 8%. First, it depends on who manages the property; other factors such as location, size, type, amenities and services offered are also important. It certainly pays much more than in Italy.
If you have the opportunity, without a doubt, it is cheaper to buy it. Rents, because of the tourist occupancy rate, are not cheap, they are not even expensive, but compared to other costs of daily life they are an important item. Conversely, it is still affordable to buy: a mortgage on 1 square meter of property costs less than 1 square meter rented. Obviously you must always be careful and well aware of the investments you intend to make, in all this of course we can assist and advise you the best.
Normally, no. This is because you have to prove that you have certain and recurring income to be considered solvent. Any income earned in another country is hardly taken into account. In any case, you can always try: you have to prove income in your own country and do not ask for too high a percentage of the mortgage compared to the purchase value.
Normally, the person who buys the property pays nothing to the real estate agency, while the person who sells pays 5%; in any case, especially in the commercial field and during the negotiation phase, all kinds of agreements can be made.
The precise calculation is a bit complex, but it’s safe to say we’re around 10%, usually less. The registration tax is 6.5% on any type of sale, adding notary, bank (in case of mortgage) and other costs, you can get to 10%.
Normally, we only receive a fee from real estate agencies, professionals and owners who are involved in the transaction. We do not receive anything from the customer who contacts us, unless additional services are necessary to complete the sale.
Urban property tax (IBIU) and garbage collection tax (Tasa recogida residuos sólidos – Basura de Vivienda). The value is calculated according to the municipality, the size of the apartment or building, the cadastral value, but in general we can say that the value to be paid annually tends to be low, it is not an expense of too much importance.
Far from it. The taxes of water and condominium are lower than the costs of an Italian city, the gas in most apartments there is not because there is never need of heating (average winter temperatures around 20 degrees, if you go in the hills or mountains of course the speech changes); electricity has a cost similar to the Italian one.
Yes, by notarized power of attorney. There are some steps to be performed – sign a notarized power of attorney in Italy with a notary public, which will then need to be translated and sworn; -send the necessary funds for the purchase by bank transfer and other steps, but still the operation is possible.
In the country where you reside. So, if you live and reside in Italy you will declare income for rentals in Italy.
It is best to seek advice from your accountant. In any case, it is essential to declare income generated abroad on which to pay taxes.
Of course, we can recommend specialized agencies or people who deal precisely with offering these services.The costs are between 10% and 30% of the rents received or on a fixed monthly basis from a minimum of 150 €, depending on the property to be managed.
Of course, that’s what we’re here for. Whether it’s a hotel, an apartment or a commercial space, we will arrange the necessary visits and appointments according to the specifications provided.
In addition to the spaces available, fiber internet wi-fi and cable, cleaning and utilities included, printer service, reception and assistance:
- Domiciliation company (including receiving correspondence)
- Private, fixed, hourly, daily, weekly or monthly office space
- Meeting room by the hour or full day
- Complementary services (printer)
- Airport transfer
- Various kinds of consultancy
– Corporate domiciliation 150€/month (includes receipt of correspondence with immediate notification of receipt by email or sms)
– Private offices:
- Half day 60€
- Full day 90€
- Half day fixed weekly (minimum 6 months) 160€/month
- Full day fixed weekly (minimum 6 months) 280€/month
– Meeting Room:
- Half day 90€
- Full day 120€
SPECIAL REGIME ZEC COMPANIES
It is a company that, by meeting a number of requirements, can benefit from a very advantageous tax regime, perhaps the most advantageous in Europe.
The most important advantage for a corporation, which makes the ZEC the most advantageous regime in Europe, is the tax rate on corporate profits at 4% which is applied on the entire taxable base (example: 100,000€ taxable base, means paying a total corporate income tax of 4,000€).
An application must be made to the ZEC management by submitting a series of documents, the most important of which is a memorandum with an economic and financial business plan and a description of the activity to be carried out. It is essential to adhere to a timetable for documents and communications.
The ZEC committee meets once a month to respond to requests for registrations.
- Company in the process of incorporation or recently formed, but fundamental that has not already communicated the start of economic activity
- The prevailing corporate purpose must be among those included in the list established by the ZEC (there are few exceptions)
- Companies with predominantly B2B business relationships (except for the tourism sector, which may also operate B2C)
- At least one director residing in the Autonomous Region of the Canary Islands (even in the case of a sole director)
- After 6 months from the time when the start of business activity is reported to the tax agency, an annual average of 5 full-time employees must be maintained if the company is based in Tenerife or Gran Canaria (3 employees for the other minor islands)
- Within the first 18 months from the start of the economic activity, an investment of at least €100,000 must be made in durable goods related to the activity (€50,000 in the smaller islands).
- Payment of an annual fee of approximately €1,400 (update 2021)
It is of paramount importance, under penalty of permanent deletion from the register of ZEC companies without the possibility of re-entry, that in the event that you fail to meet the requirements, by the end of the calendar year, you notify the ZEC of your suspension for the current fiscal year. In this case, the ordinary Spanish tax system is accessed.
Suspension must be requested annually and there are no time limits, it can also be requested for several years in a row or for the entire life of the company, but the annual fee must always be paid.
Costs are slightly higher than those for setting up a traditional company. Comparing them to the huge benefits that will be gained from the special regime of ZEC companies, they will surely be a minor issue.