TL;DR: Creating an LLC from Spain is done 100% online and takes between 1 and 5 business days (plus the EIN). The steps are five: choosing a state, name, and registered agent, filing the Articles of Organization, signing the Operating Agreement, getting the EIN, and filing the BOI. What determines whether it works for you or not is not the paperwork, it is your tax residency: if you are a resident in Spain, the profit of the LLC is taxed the same in your personal income tax (IRPF).
At EluTax we set up our first LLC in 2013, long before the internet was filled with gurus selling «LLCs that do not pay taxes». This guide is the real, step-by-step process, with the costs and mistakes we see every week in clients who come to fix what someone else set up for them.
If what you are looking for is to understand what an LLC is and how it is taxed in depth, we have another guide for that: What is an LLC in the United States?. Here we go straight to how it is done.
Before setting up anything: see if it is worth it for you
Our calculator compares, using your real profit, what you would pay as a self-employed worker, with an SL (Spanish LLC equivalent), or with an LLC. Free and without registration.
Open the calculator →Before starting: the 3 decisions that must be made
90% of the problems we fix come from having skipped this part. Before filling out a single form:
- Where you are a tax resident. It is the most decisive piece of data. Being a resident in Spain, you are taxed on your worldwide income, so the LLC do not does not save you taxes all by itself. If your plan involves changing residency, that is the main play, not the company.
- Which state you choose. Not all of them serve the same purpose. Wyoming stands out in privacy, New Mexico in maintenance cost (does not require an annual report), and Delaware in structures with investors. We develop this in which state to choose for your LLC.
- What type of LLC. Single-member, multi-member, member-managed or manager-managed, and its tax classification. This changes the forms you will file each year. See single member vs multi member.
Steps to create an LLC from Spain
If you are already clear on the three previous decisions, the process is this:
1. Choose and validate the name
It must be unique in the state and comply with its naming rules (usually adding "LLC" at the end). It is checked in the state registry before filing anything.
2. Appoint a registered agent
It is mandatory: a physical address in the state that receives legal and IRS notices. This is where going cheap turns out expensive. The mail center addresses given by cheap organizers are sometimes not accepted by banks, and during an audit, they reinforce the thesis of a shell company. If an IRS letter gets lost, the problem is yours.
3. File the Articles of Organization
It is the document that incorporates the LLC before the state. This establishes who manages it and how. Once filed and approved, the company exists.
4. Sign the Operating Agreement
Not all states require it, but it is the document that upholds the corporate veil and distributes rights among members. Without it, in the event of a conflict or an audit, your LLC is an empty shell.
5. Apply for the EIN
It is the company's tax number with the IRS, essential for opening a bank account and invoicing. Without an SSN, it is processed through a special procedure and the IRS can take weeks. We process it in about 3 days: EIN Express (99 €).
6. File the BOI (Beneficial Ownership Information)
Beneficial ownership report. It is mandatory and many people do not even realize it exists until the penalty arrives.
How much it costs: real costs
| Concept | Indicative cost | Frequency |
|---|---|---|
| State fees | $100-500 | One-time |
| Registered agent | $100-200 | , since occasional income below the SMI is less likely to be penalized. As of today it is |
| EIN | Free on your own (weeks) or 99 € express | One-time |
| Annual forms (5472 + 1120) | Varies by advisor | Annual · mandatory |
| EluTax complete service | 999 € turnkey | One-time |
The fine for failing to file the 5472 starts at $25,000. That is the real reason why maintenance is not optional.
The most costly mistakes
- Managing the LLC from Spain without structuring it. Due to the place of effective management, the Spanish tax authority (Hacienda) may treat it as a Spanish company. This is error number one.
- Structure without economic substance. A virtual office as the sole base of operations is not valid economic motive. If, in addition, all your clients are Spanish, it is even more vulnerable to attack.
- Believing that an LLC «does not pay taxes». It does not pay US Corporate Tax if it has no nexus, but the profit is taxed under your personal income tax (IRPF) if you are a resident in Spain. These are different things.
- Forgetting maintenance. 5472, 1120, 1065, K-1, BOI, FBAR, BE-12, BE-13… they do not file themselves, and IRS penalties are severe.
- Invoicing for services that you actually provide yourself from Spain. That is no longer tax avoidance, it is tax evasion. The LLC protects against nothing there.
Bank accounts for your LLC
With the LLC and the EIN you can now open an account. For small volumes (less than 100,000 € per year), fintechs such as Mercury, Wise o Payoneer. Keep one thing in mind: these are products used almost exclusively by foreign LLC owners, so in terms of traceability they are transparent to your tax authority. Beyond a certain volume, a local US bank makes more sense; we open real ones for our clients. More details at best banks for LLC.
Do it yourself or delegate it?
If your case is simple (single-member, pass-through) and you have already consulted an advisor, you can form it yourself with an organizer. The only one we recommend is Northwest Registered Agent: includes registered agent and address for the first year plus the Operating Agreement.
What no organizer gives you is the part that matters: deciding if the structure suits you, with which tax classification, and who files your forms every year in both countries. Saving a few euros when setting it up is precisely what it later costs thousands to fix.
Frequently asked questions about creating an LLC from Spain
How long does it take to create an LLC from Spain?
State formation takes between 1 and 5 business days depending on the state. The bottleneck is the EIN: via ordinary channels (fax/mail) the IRS can take 4 to 8 weeks. At EluTax we process it in about 3 days.
Can I create an LLC if I am a tax resident in Spain?
Yes, it is completely legal. What doesn't change is your taxation: as a tax resident in Spain you are taxed on your worldwide income, so the LLC's profit goes to your personal income tax (IRPF). The LLC does not exempt you from paying in Spain.
How much does it cost to create and maintain an LLC?
Formation is around $100-$500 in state fees depending on the state, plus the registered agent (about $100-$200/year). Added to this are the mandatory annual filings (5472 + 1120 for foreign-owned LLCs). Our turnkey service is €999.
What happens if I manage the LLC from Spain?
It is the most expensive mistake. Due to the place of effective management (art. 8.1.c of the Corporate Tax Law), the tax authority may consider that this company is Spanish and claim Corporate Tax here, with penalties. If you manage from Spain, it must be structured properly beforehand, not afterwards.
Do I need to register as self-employed (autónomo) if I have an LLC?
If you carry out the activity on a regular basis from Spain, the obligation to register in the RETA (Self-Employed Workers Scheme) still exists: it depends on your actual activity, not the country where the company is located. Having an LLC does not eliminate that obligation on its own.
Do I have to declare the LLC in Form 720?
Form 720/721 reports assets and rights abroad exceeding €50,000 (accounts, securities, real estate, crypto). Depending on how your LLC is structured and what assets it holds, there may be a reporting obligation. It doesn't pay taxes, but failing to file it turns out expensive.
Next step
If you are clear that you want to set it up, we do it turnkey for 999 €. If you are still hesitating whether it is worth it, start with the cheap option: run your case through the calculator or ask for free at Elu, our tax AI. And if you want to talk it over with a person, a €99 consultation saves you the regret of setting up the wrong thing.
Guidance content, not personalized tax advice. Each case depends on your specific circumstances.
🔍 Dive deeper into the EluTax AI Wiki:
