If you choose to domicile your company in Spain, your business will therefore be of Spanish nationality and will need to adhere to the laws of Spanish taxation. The Spanish tax system is one of the most beneficial in Europe for those starting a business. New tax measures have been put in place in order to stimulate new businesses and reduce tax for Spanish entrepreneurs: a new legal statute, corporate tax at 15% for new companies, refunds on Social Security etc.
Some countries determine a company’s nationality according to where the company headquarters are located. Thus, the tax domicile determines the nationality of a company. This is the case in Spain as well as in France, Belgium, Germany, Austria, Luxembourg, Portugal and Argentina. Moving the headquarters in these countries can mean that the company loses its nationality and becomes subject to legislation of the new host country.
However, other countries determine the nationality according to where it was started and so ignores the tax domicile or the address at which it operates. This is the case in the US, UK, Denmark, Holland and Switzerland. The tax domicile is official and will be retained and recognised by the tax administration. It appears on all official documents for the company: paper letterhead, quotes, invoices, purchase orders etc.
Any company engaging in import-export business or which needs to set-up in a different country can domicile their business abroad. But what are the advantages of doing so? A foreign address avoids having to re-start the company in the country where the company functions which would prove much more costly. Registering your company address abroad also reduces taxes and protects your assets. In effect, some company owners establish their company abroad in offshore centres (UK, Seychelles and Bahamas etc.).
In order to have your tax domicile in Spain, it is necessary to do some business in Spain itself. This professional activity can be characterised just be renting the commercial premises with just one employee working full time or part time, for example, a secretary. You should note that the tax domicile does not necessarily correspond to the place of commodity production either. When starting your business, you’ll also be asked for a social domicile. This is where the business of the company takes place, so where the production of goods takes place. This may well be different from the tax address.