Starting a business Spain - www.doingbusiness.

org DearAidaMartinAndres, We would like to thank you for your cooperation with the Doing Business project. Your expertise in the field of Starting a Business in Spain is essential to the success of the Doing Business report, an annual publication of the World Bank and the IFC that benchmarks business regulation in 183 economies worldwide. The Starting a Business indicator is one of the 11 indicators of the Doing Business report. Thelatesteditionofthereport,DoingBusiness2012:DoingBusinessinaMoreTransparentWorldwaslaunchedonOctober20,2011 and received a record number of 4,432 media citations within one month of publication, including coverage from all major global, regional and local media outlets such as TV, print, broadcast and web. Without your contribution the Doing Business project would not be able to disseminate regulatory best practices to the governments worldwide that read our report with interest every year. Since its inception in 2004, Doing Business has informed more than 300 reforms around the world, making it easier for small and medium sized entrepreneurs to do business. For Doing Business 2013, we are honored to be able to count on your expertise:
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Please review the assumptions of the case study before updating last year's information in the survey Please describe in detail any reform that has affected the process of topic since June 1, 2011 Please make sure to update your name and address, so we can mail you a complimentary copy of the report

We thank you again for your invaluable contribution to the work of the World Bank Group. Sincerely,

Karim O. Belayachi Email: kbelayachi@worldbank.org Phone: +1 202 478 9402 Primary Contributor Information Title: Miss First name: Aida Last name: Martin Andres Email: aida.m.andres@gmail.com Phone: Fax: Mobile: Profession: Position: Firm Information Firm Name: GimnezTorres&YFERA Firm PO Box: Firm Address: Firm City: Firm State/Province: Firm Zip/Postal code: Firm Country: Spain Permission to Publish Name: Address: Email: Phone: Firm name:

FrdricMeunier Email: fmeunier@worldbank.org Phone: +1 202 458 9711

1. Scenario
YouaresettingupthefollowingcompanyinMadrid: Type of limited Sociedad de responsabilidad limitada (SRL) -Limited Liability Company which liability company has 5 owners and is 100% domestically owned Madrid,thelargestbusinesscityinSpain. Located in l Start-up capital: EUR 226,863(equivalenttoUSD316,500); l Annual sales (turnover): EUR 2,268,630(equivalent to USD amount 3,165,000); Company Size l Number of employees: 10 to 50 employees (within 1 month of commencement of operations). All are nationals of Spain.
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General industrial or commercial activities, such as the production or sale of products or services to the public. Does not qualify for investment incentives or any special benefits.

Activities Note: The business does not perform activities of foreign trade and does not handle products subject to a special tax regime, for example, liquor or tobacco. It is not using heavily polluting production processes. Does not own real estate. It leases the commercial plant and offices. Assets Company deed 10 pages long. You will undertake every procedure that is officially required (or commonly done in practice) to set up this hypothetical domestic company. These include obtaining all necessary licenses and permits and completing any required notifications, verifications or registrations for the company and employees with relevant authorities. Please always refer to this scenario when describing the Business Start-up process in section 2.

2. The Business Start-up Process

For your convenience, last years answers are included in this survey. They represent a unified answer, based on the answers we received from various contributors. Please see below the aggregate estimates: Summary of Starting a business in Madrid Number of procedures 10 Time (calendar days) 28 Cost (% of income per capita) 4.7 Paid-in minimum capital (% of income per capita) 13.2 Definitions Procedure: any interaction of the company founder with external parties; for example, government agencies, lawyers, auditors, or notaries. Interactions between company founders or company officers and their employees are not considered separate procedures. Both pre- and post-incorporation procedures that are officially required for an entrepreneur to legally operate a business are recorded. Time: is recorded in calendar days and captures the median duration of each procedure. The time span for each procedure starts with the first filing of the application or request, and ends once the company has received the final document, such as the company registration certificate or tax number (for example : it includes the time to make an appointment with the notary or any waiting time once the documents are filed). It is assumed that the entrepreneur has had no prior contact with any of the officials. The minimum time for a procedure is 1 day. Costs: only include official fees and taxes. Bribes are excluded. If possible, please indicate the relevant fee schedule or calculation formula (for example, as a percentage of the companys capital). Professional fees (notaries, lawyers or accountants) are only included if the company is required to use such services by law. Paid-in minimum capital requirement: the amount that the entrepreneur needs to deposit in a bank or with a notary prior to or within 3 months of company registration.

2.1 Please update the data below, taking into account the scenario of the company you are hypothetically setting up.
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Please describe in detail any change to the data and indicate since when the change has taken effect. Please specify if the information is erroneous (correction), or if the change resulted from a modification in practice or by law which occurred after June 1, 2011 (reform).

Previous Information If the information is incorrect or has changed, please provide us with the updated information. Comments (Correction / Reform) and Other Information In general terms, a sociedad limitada limited company (S. L.)- is used because:

Most common type of domestic limited Sociedad de liability company in Spain responsabilidad limitada (SRL) -Limited Liability Company

1- It requires a smaller outlay of capital. 2- It requires fewer administrative formalities to operate. 3- It offers greater flexibility for agreements between its partners. Minimum capital requirement: Paid-in minimum capital requirement (minimum amount to be paid prior to or within 3 months of company registration): Legal basis for the paid-in minimum capital requirement EUR 3,000 EUR 3,000 -

Article 5 of the Companies Act

Prohibition on capital under the legal minimum: No deeds of incorporation shall be authorised for corporate enterprises whose total capital is below the legally established minimum, nor shall amendment instruments rendering company capital below such amount be permitted, except in compliance with a specific legal provision. Immediately after registration

When can the paid-in capital be withdrawn? (eg. immediately after incorporation or registration, 1 year after registration, after dissolution of business)

2.2 Please revise the procedures to start a company in Madrid based on the scenario previously described:
No. Procedure 1 Name: Obtainacertificationofuniquenessofproposedcompanyname(certificacinnegativadeladenominacinsocial)fromthe Mercantile Register Time: 3 days Cost: EUR 15.95 (certificate) + EUR 3 (stamps) Agency: THE MEANS OF REQUESTING A NEGATIVE NAME CERTIFICATE a) Directly in the offices of the Central Mercantile Register, with a request for Certificate form b) By mail: Enclosing a request form or letter to the offices of the Central Mercantile Register. The Register shall mail the certificate C.O.D. to the address indicated in the request. c) Via telematics: Sending the request form for a company name which is shown in the web page. Details: Once the certicate has been issued stating that the name requested has not already been registered, this shall remain registered in the name of the interested party or its beneficiary for a period of SIX MONTHS starting from the date of issue. The negative certificate shall have a validity of THREE MONTHS for the purpose of deed execution, starting from the date of its issue by the Central Mercantile Register. Upon expiration, the interested party may request a renewal with the same name. The expired certificate shoud accompany the request. SIX MONTHS after the name reservation if this has not been recorded in the corresponding Regional Mercantile Register, the name shall be withdrawn from the Section on Company Names of the Central Mercantile Register whereby a new certificate, subject to evaluation by the Registrar, must be requested. The cost of the certificate is EUR 15.95 + EUR 3 If you made changes to last years information, please indicate whether this is a correction or a reform Please explain the changes and provide the legal basis when applicable: LEGAL BASIS Article 6. Specification of the type of corporate body 1. The names of limited liability companies shall include the words Sociedad de Responsibilidad Limitada or Sociedad Limitada or their respective abbreviations, S.R.L.or S.L.. Article 7. Prohibition of identical names 1. Corporate enterprises may not use a name that is identical to the name of an existing company. 2. Subsequent regulations may establish requirements regarding the composition of corporate names

No. Procedure 2 Name: Open a bank account for the company; deposit capital in the bank and obtain a deposit certificate. When the new company is set up, the relevant sum is usually paid in cash or transferred to a Spanish bank account in the name of the new company with the words enconstitucin-in process of constitution-added at the end. For the opening of this account, the bank will require a document that proves that all the steps to create a company are being taken. The deed of Incorporation shall include the receipt of the money contribution issued by the bank. Time: 1 day Cost: no charge

Agency: Bank Details: Pursuant to Spanish Royal Decree 1,784/1996 (Article 189, second paragraph), the contributions can also be directly given to the notary public before whom the deed of incorporation is going to be granted, at the time of the granting, so that the notary can deposit them in the Companys bank account, provided that (i) the contributions are paid in with cash, and (ii) the request to deposit the capital is included in the public deed. If you made changes to last years information, please indicate whether this is a correction or a reform Correction Please explain the changes and provide the legal basis when applicable: No. Procedure 3 Name: Grant a public deed of incorporation before a public notary Time: 1 day Cost: approximately 500, depends on the amount of the share capital and complexity of the operation. Agency: Public Notary Details: The public deed of incorporation must include (a) the identity of the company shareholders; (b) their will to incorporate the company; (c) the disbursement made by each of shareholder and the number of shares subscribed to by each; (d) the company bylaws; (e) the type of administrative body that will manage the company; and (f) the identity of its administrators or directors. If you made changes to last years information, please indicate whether this is a correction or a reform Please explain the changes and provide the legal basis when applicable: No. Procedure 4 Name: SubmitDeclaracinCensaldeIniciodeActividadandobtaintheTaxIdentificationNumber(NumerodeIdentificacionFiscal,NIF) fromtheDelegacinProvincialdelaAgenciaEstataldelaAdministracinTributaria Time: 1 day Cost: no charge Agency: DelegacinProvincialdelaAgenciaEstataldelaAdministracinTributaria Details: Asageneralrule,thestatementoncommencementofbusinessactivities(DeclaracinCensaldeIniciodeActividad)mustbe filed and the tax identification number must be obtained before the company starts business activities. A copy of the public deed ofincorporationmustbefiledwiththeDelegacinProvincialdelaAgenciaEstataldelaAdministracinTributariawiththe corresponding form. Through the same procedure, the company must also register for VAT. The tax identification number is a prerequisite for registering the public deed of incorporation with the Mercantile Registry . Form 036 may be filed in person with the DelegacinProvincialdelaAgenciaEstataldelaAdministracinTributariaorbyregisteredmail,alongwiththefollowing documents: (a) the original and a copy of the public deed of incorporation; (b) original or copy of identity documents (such as DNI or NIE for a foreign individual or legal entity) of the shareholders; and (c) original of an identity document (such as DNI or NIE. for a foreign individual or legal entity) of the representative of the company. If you made changes to last years information, please indicate whether this is a correction or a reform Please explain the changes and provide the legal basis when applicable: No. Procedure 5 Name: ObtainataxdeclarationofexemptionfromtheDireccinGeneraldeTributos- ConsejeraHaciendaComunidadMadrid Time: 1 day Cost: no charge Agency: DireccinGraldeTributos- ConsejeraHaciendaComunidadMadrid Details: - As a subsidiary: Under Royal Order-in-Council No. 13/2010, all operations looking for forming, capitalizing and maintaining undertakings are tax-exempt effective since December 3, 2010, considering that in the current economic circumstances it is desirable to clear away any obstacles to fulfilling those aims. - As a branch Office: The creation of a branch office of a non-resident company is taxed as follows: Non-resident companies whose registered office and actual headquarters are situated in non-EU countries: 1% of the own funds they allocate to carrying on business in Spain. Non-resident companies whose registered office and actual headquarters are situated in EU countries: Not taxed. AtaxdeclarationmustbeobtainedfromtheDireccinGraldeTributos- ConsejeraHaciendaComunidadMadrid.Otherwise,the incorporation may be denied at the Companys registry. If you made changes to last years information, please indicate whether this is a correction or a reform Please explain the changes and provide the legal basis when applicable: No. Procedure 6 Name: File the public deed of incorporation of the company for its registration with the Mercantile Registry. Time: 6 days Cost: EUR 155 Agency: Commercial Registry of Madrid

Details: The registration costs are based on variables such as the amount of the company share capital, the number of shareholders, and the type of administrative body. For example, for a company with share capital EUR 219,760 with five shareholders and five members of the board of directors, the registration fee would be about EUR 159. Fee schedule for registration: - If company share capital does not exceed EUR 3,005.06: fee is EUR6.01. - EUR 3,005.06 to EUR 30,050.61: 0.10%. - EUR 30,050.61 to EUR 90,151.82: 0.08%. - EUR 90,151.82 to EUR 240,404.84: 0.06%. - EUR 240,404.84 to EUR 601,012.10: 0.038%. - EUR 601,012.10 to EUR 1,202,024.21: 0.02%. - EUR 1,202,024.21 to EUR 6,010,121.04: 0.009%. - Over EUR 6,010,121.04: 0.005%. In any case, the regulated applicable global tariff will not exceed EUR 2,181.67. According to Royal Decree 8/2010 of 20 May to fight crisis fees for public registrar have been reduced by 5%. The company public deed of incorporation must be filed with the Mercantile Registry of the place where the company has its corporate address within 2 months of the date it was granted. For the public deed to be registered, it is necessary that the Asset Transfer and the Legal Documented Acts Tax has been paid and the tax identification number obtained. Once the public deed of incorporation has been registered, the company incorporation will be published in the Official Journal of the Mercantile Registry. Upon registration, the company acquires the status of a legal entity. If you made changes to last years information, please indicate whether this is a correction or a reform Please explain the changes and provide the legal basis when applicable: No. Procedure 7 Name: Legalize company books Time: 15 days Cost: approximately EUR 25 per book (2 books) + EUR 21.14 to legalize Agency: Commercial Registry of Madrid Details: The process of legalizing the company books consists of the filling of the corresponding application form and the payment of the relevant fees to the Mercantile Registry. If you made changes to last years information, please indicate whether this is a correction or a reform Please explain the changes and provide the legal basis when applicable: No. Procedure 8 Name: Submit a notification of start of operations (declaracion responsable) to municipality. Time: 7 days Cost: EUR 350 Agency: Town Council Details: Law 2/2011 of March 04, 2011 of Sustainable Economy substituted the requirement of obtaining a municipal license with a simple notification, for general companies that do not have a hazardous impact on the environment, public health, security, or the preservation of national and artistic heritage. A general company is now able to start operations with a simple notification. The municipality will conduct an ex-post inspection to ensure compliance. If you made changes to last years information, please indicate whether this is a correction or a reform Please explain the changes and provide the legal basis when applicable: No. Procedure 9 Name: File for social security and affiliate all workers with the local general treasury of social security (Tesoreria General de la Seguridad Social) Time: 1 day (simultaneous with procedure 7) Cost: no charge Agency: TesoreraGralSeguridadSocial Details: Upon registration of the company with Social Security, a state supervisory number is issued and assigned to the company. The required documents are (a) the corresponding form; (b) a copy of the public deed of incorporation; (c) a photocopy of the applicants national identity document or power of attorney; and (d) the company tax identification number. Registration of the company and affiliation of all the workers must be made before starting any business activities. In addition to the registration of the company, registration of each employee with the Spanish Social Security System is required by submitting the following documentation upon hire: (a) corresponding form (signed by both the company and the employee); (b) powers of attorney of the company representative; (c) a copy of the employees national identity document (such as DNI, NIE, or passport); and (c) a copy of the company representatives national identity card. The Decree 68/2010 of March 26th, 2010 has led to the use of electronic means to start up any type of company. Consequently, the documents that are required in order to register employees with the Spanish Social Security System may be submitted using new electronic procedures. Alternatively, the documents that are required in order to register employees with the Spanish Social Security System may be submitted using these new electronic procedures (Real Decreto 368/2010, de 26 de marzo por el que se regulan las especificacionesycondicionesparaelempleodelDocumentonicoElectrnico(DUE)).

If you made changes to last years information, please indicate whether this is a correction or a reform Please explain the changes and provide the legal basis when applicable: No. Procedure 10 Name: NotifytheDelegacinProvincialdelaConsejeradeTrabajoeIndustria Time: 1 day Cost: no charge Agency: DireccinGralTrabajo- Comunidad de Madrid Details: The company must keep a visits book (libro de visitas) at all times. Information that must be noted includes the details of the company and the work place and a description of its business activity. The corresponding autonomous community must be notified within the first 30 days of the start of activities and the opening of the workplace. Every autonomous community has its own form. Some require that work injury and safety documentation (corresponding to the specific business or workplace in question) be filed along with the forms. Other forms and documents might be needed depending on the workplace activities. Pursuant to Spanish Labour Inspections resolution of 25 November 2008, the company can now register through the Labour Inspections visits books electronic system. If you made changes to last years information, please indicate whether this is a correction or a reform Please explain the changes and provide the legal basis when applicable: No. Procedure Name: The basic requirements for setting up a company in Spain are its constitution before a Notary Public and its entry in the Registro Mercantil(Mercantile Register). Nonetheless, in order to meet these requirements and in case of doing it by means of a representative, granting of representative powers by the founder/s to the person who will be responsible for setting up the company. Time: 1 day Cost: Agency: Notary Public Details: A power of attorney may only be granted by someone with legal authority: either the grantor itself in case of a nature person, or a legal representative or administrator if the Grantor is a legal entity. a) If power of attorney is granted in Spain, the grantor must appear before a Notary Public. Neither the presence nor the acquiescence of the recipient is necessary. b) If power of attorney is granted outside Spain, the grantor must appear before a Notary Public of the country where the power is granted. The power of attorney must then be legalized via the Hague Apostille of 1961 if the country where it is being granted is a country member of the Hague Apostille. If the country where the power is being granted is not a member, all the steps of document legalization applicable to each case must be followed. If the power is not granted in Spanish, then it must be translated by a sworn translator unless it is granted in a Spanish Embassy or Consulate. In both cases, the grantor should present the public document which testifies her/his capacity and authentication to grant the power. In case of doing it by means of a representative, granting of representative powers by the founder/s to the person who will be responsible for setting up the company; If you made changes to last years information, please indicate whether this is a correction or a reform Please explain the changes and provide the legal basis when applicable: No. Procedure Name: Application for a Tax identification Number in the case of a legal entity, or the NIE (Foreigners Identity Number) of a natural person, the partners and foreign administrators of the company that is to be established. Time: 1 day Cost: 300 euros Agency: *Requesting a N.I.E in Spain: contacting the Spanish Oficina de Extranjeros-Foreign NationalsOffice- or in the absence of the Spanish Oficina de Extranjeros-Foreign NationalsOffice-, visit the local police station of the place of residence of the applicant. *Requesting a N.I.E from outside Spain: Visit the Spanish diplomatic delegation or consular office corresponding to the place of residence in person. Requesting a N.I.F: contacting the Spanish AdministracinTributaria-the Spanish Tax Agency-. Likewise, the Notaries Public will be able to request the temporary NIF by telematic means in certain cases. Details: The applicable regulations demands in certain cases that natural persons or legal entities non-resident in Spain obtain a Foreigners Identity Number (NIE) in case of natural persons or a Tax Identification Number (NIF) in case of legal entities. This way, foreigners who for financial, professional or business reasons have some connection to Spain will be given a personal, unique and individual number for identification purposes. These are issued in sequential order. This personal number is the alien identification number (NIE in its Spanish acronym), which must appear on all documents issued or submitted, as well as the official stamps on their identity card or passport. Natural persons or legal entities non-resident in Spain have the obligation of having a Spanish NIE or NIF in the following cases of mercantile practice: when they are partners or administrators of Spanish companies, to grant deeds of incorporation related to rights over properties, to carry out any sort of financial transaction within Spain (for example, opening a bank account) or completing any government form from the Spanish Oficina de Extranjeros(Foreign NationalsOffice). If you made changes to last years information, please indicate whether this is a correction or a reform -

Please explain the changes and provide the legal basis when applicable: -

3. Reform Update
3.1. Has there been any reform (in practice or in laws and regulations) related to the process of starting a business since June 1, 2011? * Yes No Comments: Please indicate the name and date of the law (if applicable please provide online link to the text): Has this reform simplified or complicated the process of starting a business? Please explain : 3.2. Are you aware of any reform (in practice or in laws and regulations) related to the process of starting a business that is expected to be adopted PRIOR TO June 1, 2012? * Yes No 3.3. Are you aware of any reform (in practice or in laws and regulations) related to the process of starting a business that is ongoing and is expected to be adopted AFTER June 1, 2012? * Yes No

4. Additional information
The following questions are part of the research Doing Business conducts. Please disregard the case study assumptions to complete this section of the survey. 4.1. Can applicants track the status of the application for business registration at the company registry (or other agency in charge of company incorporation)? Yes No If YES, how? In person (physically at the agency) Phone or email Automated system (e.g. using the application # on an online system to https://www.rmercantilmadrid.com/rmm/online/consultadoc.aspx automatically see the application status) Please provide for the link to the system: Other - Please describe: Do you feel that the tracking system is effective in speeding up the process of business registration by making the public authorities more accountable? Please explain: 4.2. How does the company registry (or other agency in charge of company incorporation) make the currently fee schedule for business registration available? (Multiple answers can apply) Only upon request from agencys employee Published in laws/decree/regulation/gazette- Please indicate name and Royal Decree 757/1973 of 29 march 2)Royal Decree 13/2010, date of law: of 3 december Brochures, boards or other public notices at the agencys office (for pick-up without prior appointment) Online - Please indicate the website address: Other - Please describe: 4.3. How does the company registry (or other agency in charge of company incorporation) make the list of documents required for business registration available? (Multiple answers can apply) Only upon request from agencys employee Published in laws/decree/regulation/gazette- Please indicate name and date of law: Royal Decree 1784/1996, of 19 july Brochures, boards or other public notices at the agencys office (for pick-up without prior appointment) Online - Please indicate the website address: Other - Please describe:

Referrals
Please help us expand our list of contributors by referring us to other experts in the private and public sector who can answer the Starting a Business Survey. First Name Last Name -

Firm Position Phone Email Referals Type -