In the context of expanding into the Spanish market, foreign businesses—whether multinational corporations, small and medium-sized enterprises, or entrepreneurs—facing rapid market entry must make a clear choice: to incorporate a company or to acquire a shelf company.
We analyse both options based on our 24+ years of experience advising international clients on establishing their presence in Spain.
Traditional company incorporation (from Scratch)
Advantages
Tailor-made structure: Clients can define the legal form (S.A., S.L., etc.), company name, corporate purpose, share capital, bylaws, board of directors, and fiscal year, among others.
Transparency and legal certainty from the outset: There are no hidden liabilities (such as debts, fines, or pending obligations with tax or social security authorities).
Fixed pricing: Costs tend to be predictable and adapted to the client’s needs.
Disadvantages
Slower initial process. Particularly if foreign investors do not yet hold a Spanish NIE or electronic signature. Spain’s bureaucratic nature and strict administrative procedures mean that the average timeframe to begin operating with a newly established company ranges from 2 to 6 weeks, depending on the specific case, number of founding shareholders, and legal structure.
Acquiring a Shelf company (Pre-Existing Company)
Advantages
Legal age: It may be beneficial in public tenders or sectors where experience and credibility are valued.
Faster access to financing and suppliers that prioritise older companies.
Quickstart: After the transfer of shares and change of directors, the company can begin operating almost immediately.
Disadvantages
Misalignment with client needs: In most shelf company acquisitions, the buyer must amend the bylaws, headquarters, corporate purpose, board of directors, share capital, and company name, which can delay the operational start.
Hidden risks: If a thorough due diligence is not performed, unforeseen tax or employment liabilities may arise.
Higher cost compared to new incorporation: In addition to the purchase price, extra costs arise from bylaws changes, notarial and registration fees, and legal audits.
Estimated Timeframes
In Spain, the incorporation of a new company and the transfer of shares in an existing one constitute legal acts that must comply with specific statutory procedures and formalities to produce full legal effects.
In both cases, the process involves two main stages:
- Appearance before a notary for the execution of the public deed
- Registration of the relevant acts and changes with the Spanish Commercial Registry
- The estimated timeframe to complete these steps ranges from 15 business days to 6 weeks, depending on the specific circumstances of each transaction.
Comparative Table: Timeframes
| Shelf company | Company Incorporation | |
|---|---|---|
| Start of operations | With NIE: 4 weeks Without NIE: 2–6 weeks | With NIE: 2 weeks Without NIE: 2–6 weeks |
| Post-transfer modifications (director, corporate purpose, name, etc.) | Approx. 15 business days | Not applicable |
Our Recommendation
In most cases, we advise proceeding with the incorporation of a new company, particularly where control, transparency, and legal certainty are of paramount importances. However, in situations corporate age constitutes a strategic advantage or expedited market entry is essential, the acquisition of a shelf company may represent a viable alternative—provided it is accompanied by legal due diligence.
We offer advisory services for both company formation and the execution of legal audits during the acquisition process.
