Companies can now be formed for €1 in Spain

Companies can now be formed for €1 in Spain

The Spanish Council of Ministers approved this Tuesday, November 30, the draft Law ‘Create and Grow’. This will allow the constitution of a company with just one euro, quickly and electronically, allowing entrepreneurial business creation and growth.

In a press conference following the Council of Ministers meeting, Nadia Calviño, the Minister of Economic Affairs and Digital Transformation, explained that this Law is being proposed to promote the creation of companies and their growth. It reduces the initial capital necessary to register a Limited Liability Company from €3,000 to the testimonial euro.

“This measure allows Spain to align itself with a large part of the neighbouring countries, in which a minimum capital is not required, thus favoring entrepreneurship”, pointed out Ms Calviño.

One of the key points of the new law is in the fight against commercial delinquencies. The bill contemplates that companies not meeting the payment deadlines may not be beneficiaries or collaborators of public subsidies. This of course is at a time marked by the arrival of European funds.

After taking the law to public consultation last July, the Government has given the green light to the project to initiate the pertinent parliamentary procedures, and thus comply with the commitment acquired with Brussels.

As highlighted by Calviño, the Law also promotes the telematic establishment of companies through the ‘one-stop-shop’ of the Information Centre and Business Creation Network (CIRCE). This should guarantee a reduction in the deadlines for their creation, and in the notarial and registry costs involved.

A company’s obligation to issue and send electronic invoices is extended in all commercial relations between companies and the self-employed, designed to guarantee greater traceability and control of payments, and cut late payments.

According to Calviño, this measure, in addition to reducing transaction costs, and representing an advance in the digitisation of company operations, will allow obtaining reliable, systematic, and agile information on effective payment terms. This is seen as an essential requirement in reducing commercial delinquencies.

A State Observatory of Private Delinquency will be created within six months, which will monitor and analyse data on payment terms and promote good business practices.

Additionally, the draft bill improves the efficiency of the regulatory framework for economic activities by simplifying existing legislation, eliminating unnecessary regulations, and establishing more agile procedures, as reported by 20minutos.es.

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