News: Registration of Company on Tenerife

Tenerife is the largest of the seven islands of the Canary Islands archipelago in the Atlantic Ocean. Its location is central in relation to the rest of the islands. The administrative center is Santa Cruz de Tenerife.

The currency of Tenerife is the euro.

Starting business in Tenerife is much easier than it is possible to suggest, because the island has excellent conditions for establishing company.

Why is it cost-efficient to register or buy company in Tenerife?

• In Tenerife, the tourist season lasts all year round, and this ensures the availability of clients within 12 months. This is especially important for the sphere of restaurant business.
• Local enterprises enjoy the conditions of preferential taxation, which is related to the autonomous status of the Canary Islands.
• The internal order on the island guarantees the safety of doing your own business.
• Low crime rate and effective police work.
• Full range of professional services is provided, and those are related to running your own business.
• In recent years, Tenerife has become one of the most popular tourist destinations in Europe. Thus, there is growing demand for services on the island (the number of tourists and people residing on the islands is constantly increasing).

Forms of doing business

The Commercial Code of Spain provides for registration of the following types of business entities:

- Joint-stock company;
- Limited liability company;
- Permanent representative office.
The Joint Stock Company and the Limited Liability Company are the most popular forms of business in Tenerife.

Registration of the Joint Stock Company - Sociedad Anonima (S.A.)

• The company can be established by one person (consist of one person), if the company's shares are acquired by one shareholder.
• Minimum authorized capital of S.A. equals to not less than 10 million pesetas. At least 25 percent of the declared value of each share placed shall be paid at the moment of registration.
• The shareholders are not liable for the obligations of the company.
• The statutory documents contain:

- full and abbreviated company names;

- purpose and type of activity of the enterprise;

- term of existence of the company;

- date of commencement of commercial transactions;

- location of the company;

- amount of charter capital: the number of shares, their categories (ordinary, preferred) and types;

- amount of unpaid part of the charter capital (form and maximum period for payment);

- structure of the management body;

- terms and form of holding the general meeting of shareholders;

- form and method of decision-making.

• Management of the company in Tenerife is carried out by the administrator or by the board consisting of at least three administrators.

S.A. company in Tenerife is the most optimal form for the establishment of large enterprises. In this regard, the legal regulation of its activities is complicated in comparison with other forms of enterprises.

Registration of the Limited Liability Company - Sociedad de Responsabilidad Limitada (S.L.)

The founder can be one person.

Minimum authorized capital shall be not less than 500 000 pesetas. At the moment of registration, it should be completely paid.

The shareholders are not liable for the obligations of the company.

The statutory documents contain the following information:

- full and abbreviated company names;

- purpose and type of activity;

- term of existence of the company;

- date of termination of activities;

- location of the company;

- amount of the authorized capital and the declared value of the stake of each shareholder;

- structure of the company's management body.

Bank account shall be opened in favour of the company, and the amount of the authorized capital is credited the account. If the amount exceeds 1 million pesetas, it should be notified to the authorities.

Bookkeeping for business in Tenerife

The company shall annually submit audited reports.

Exceptions are the organizations for which the following circumstances were relevant within the past two years:
- the sum of all items of the asset did not exceed 395 million pesetas;
- the amount of income from annual sales was less than 790 million pesetas.
- the average number of employed workers during the year did not exceed 50 people.

Taxes on business in Tenerife

The company in Tenerife pays tax levy for the registration of the company, which equals to 1% of the amount of authorized capital.

Municipal fees:

- for conducting economic activities (depending on the type of activity);

- for real estate 0.3-0.4% of the value of the property.

Taking into consideration that Tenerife is considered as special economic zone, the companies herein can receive tax benefits of 2 types:

1st type. Benefits related to investments in local production.

2nd type. Benefits for manufactured goods and activities of shipping companies.

We will register ready made company in Tenerife for you within the shortest time possible. It is now easier than ever to buy company in Tenerife. Registering company in Tenerife is one of the simplest and cheapest ways to start a legitimate international business. Company formation in Tenerife is one of the main directions of our work.