A Sociedad Limitada (SL) is the Spanish equivalent of the German GmbH. It is the standard route when you are building a business on Mallorca that goes beyond pure self-employment: with employees, multiple shareholders, higher turnover, or a desire for limited liability. This guide shows you how the formation process works in practice, what it costs, and from what point it is worth taking this step.
SL or Autonomo - what suits you
Before you start the formation process, a sober comparison with the simpler option is worthwhile. As an Autonomo you are ready to go immediately, but there is no separation between personal and business assets, and everything is taxed under IRPF. An SL is a separate legal entity, liable with its own assets, and pays 23 to 25 percent corporate tax (Impuesto sobre Sociedades).
An SL typically makes sense when three points apply:
- Your profit is consistently above 40,000 to 60,000 EUR per year.
- You want to hire employees or found the company with partners.
- Your business carries risks (e.g. property development, hospitality, rentals) where you do not want to be personally liable.
If none of these points applies to you, stay as an Autonomo for now and revisit the question in 12 months.
Tip
Ask your Gestoria to run a comparison calculation of Autonomo vs. SL for your expected annual result. The factors are not just the tax, but also social security, payroll costs, and administrative burden.
Formation Requirements
To set up an SL at all, you need a few documents and prerequisites:
- NIE for every shareholder who is not Spanish. Without a NIE (Numero de Identidad de Extranjero) there is no registration. How to get one is explained in the article on the NIE number.
- Company name reservation at the Registro Mercantil Central (Certificacion negativa de denominacion). You submit three preferred names and the first available one is approved. Cost: around 16 EUR. The reservation is valid for 6 months.
- Shareholders and managing director (Administrador): You can found the company alone (Sociedad Unipersonal) or with others. The managing director does not have to be Spanish, but needs a NIE and usually has to register with the Seguridad Social as an Autonomo Societario.
- Business purpose (Objeto Social): A clearly worded description of the activity, aligned with the IAE code. Too narrow and it restricts you later; too broad and registration becomes difficult.
- Registered address (Domicilio Social): An address on Mallorca is sufficient - this can also be a coworking space or a Domiciliacion service. Pure letter-box addresses with no connection to the business are no longer accepted by some municipalities.
- Share capital: Since the 2022 reform, 1 EUR is formally sufficient. In practice, many Gestorias work with 3,000 EUR, because this improves credibility with banks and authorities.
Steps of the Formation
Forming an SL follows a fixed process. Allow four to six weeks; with CIRCE it goes a little faster.
- Reserve the company name: Apply online at the Registro Mercantil Central. Confirmation arrives by email after 1 to 3 working days.
- Open a bank account and pay in the share capital: You open a business account in the name of "Sociedad en constitucion". The share capital sits there until the company is registered. The bank issues you with a deposit confirmation (Certificado bancario).
- NIF provisional at the Agencia Tributaria: Modelo 036 with the confirmation from the Registro Mercantil Central. This gives the SL a provisional tax number.
- Draft the articles of association (Estatutos): Together with your Gestoria or lawyer. These set out the registered address, business purpose, management, voting rights, and transfer rules.
- Notary appointment (Escritura de constitucion): All shareholders sign at the notary in Palma. You need the Estatutos, bank certificate, NIF provisional, and the name reservation.
- Taxes before registration: The ITP/AJD has been suspended since 2010, so you pay 0 EUR today. You still have to file the corresponding Modelo 600 in the Balearic Islands.
- Registration in the Registro Mercantil de Mallorca: The notary forwards the Escritura digitally. After 5 to 15 working days the SL is registered.
- NIF definitivo and IAE registration: Once registered, the provisional tax number becomes permanent. You register the activity with Modelo 036 and, if applicable, the IAE.
- Social security for the managing director: Registration as Autonomo Societario with the Seguridad Social. The contribution in 2026 is around 360 to 410 EUR per month without the Tarifa Plana.
Share Capital and Accounts
Since early 2023, a "standard" SL formally requires only 1 EUR in share capital. This sounds appealing, but there are consequences. As long as the capital is below 3,000 EUR, special rules apply:
- 20 percent of annual profit must flow into a statutory reserve until 3,000 EUR is reached.
- On dissolution, shareholders are personally liable for the difference between 3,000 EUR and the actual equity.
- Banks, landlords, and major suppliers often require creditworthiness that is difficult to demonstrate with 1 EUR in share capital.
In practice, most clients therefore found with 3,000 EUR, or with a contribution in kind where, for example, a vehicle or fixed assets are brought in. If you contribute assets in kind, you generally need a valuation report and a declaration from the shareholders regarding the correct valuation.
For the business account, you are reliant on a Spanish bank that accepts "en constitucion" accounts. Banks such as BBVA, CaixaBank, Sabadell, and recently Santander Empresas open such accounts. The online banks N26 Business and Wise Business only function as a regular business account after registration.
Ongoing Costs
The important question: what does the SL cost per month after formation? Here is a realistic breakdown for a small SL without employees on Mallorca:
| Item | Monthly | Annual |
|---|---|---|
| Gestoria (bookkeeping, taxes, payroll) | 180 to 350 EUR | 2,200 to 4,200 EUR |
| Social security for managing director | 360 to 410 EUR | 4,300 to 4,900 EUR |
| Banking, software, minor fees | 30 to 80 EUR | 360 to 960 EUR |
| Corporate tax (on 50,000 EUR profit) | around 1,000 EUR | around 12,000 EUR |
| Registro Mercantil and Cuentas Anuales | around 10 EUR | around 120 EUR |
Without the managing director on a salary, or with the Tarifa Plana for newly formed SLs, the social security contribution can fall to around 80 EUR per month in the first 12 months. The condition is that neither you nor your co-shareholders have been Autonomo in the last two years.
On the obligations side, every year brings the Cuentas Anuales (balance sheet and P&L at the Registro Mercantil), Modelo 200 for corporate tax, quarterly Modelos 303 for IVA, Modelo 111 and 115 for withholding taxes, and Modelo 232 for related-party transactions. The Gestoria takes care of all of this - you just need to supply clean receipts.
Warning
If you miss the Cuentas Anuales two years in a row, the Registro Mercantil will block your SL. Registrations, sales, and notary appointments are then frozen. Set fixed reminders for April (Modelo 200) and July (Cuentas Anuales).
Comparison with the German GmbH
Anyone coming from Germany instinctively thinks in GmbH terms. The SL is similar, but different in a few areas.
| Aspect | SL Spain | GmbH Germany |
|---|---|---|
| Minimum share capital | 1 EUR (from 3,000 EUR without special rules) | 25,000 EUR |
| Registration time | 1 to 6 weeks | 3 to 8 weeks |
| Tax rate on profit | 23 to 25 percent | around 30 percent (corporate tax + trade tax) |
| Managing director social security | Compulsory as Autonomo Societario | Freely chosen (often statutory/private health insurance) |
| Annual accounts obligation | Cuentas Anuales at the Mercantil | Bundesanzeiger and commercial register |
| Notary | Required for formation and changes | Required for formation and major changes |
What regularly surprises people from Germany: in Spain, social security for managing directors with a significant stake is practically always compulsory (Autonomo Societario), regardless of whether you also draw a managing director salary. These contributions are the largest ongoing cost item that you need to account for compared to the GmbH model.
If your German GmbH already exists and you are simply relocating your residence to Mallorca, keep the exit taxation rules in mind. They can apply even without a sale, as soon as your shareholding exceeds 1 percent.
An SL is not an end in itself, but for many people on Mallorca it is the logical next step after a successful start as an Autonomo. Set up the formation with a Gestoria and a tax adviser who know both worlds, and the process will be straightforward - leaving you free to focus on the actual business.