What exactly is an LLC for a Spaniard?
An LLC is taxed as a pass-through entity: profits pass directly to the partner's Personal Income Tax (IRPF) in Spain. A non-Spanish resident can create it online in 4-7 days without traveling to the U.S.
IMPORTANT: Opening an LLC does not exempt you from declaring in Spain if you reside here for more than 183 days. What changes is the structure, not the obligation to declare.
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LLC vs Self-Employed in Spain
| Criterion | U.S. LLC | Spanish Self-Employed |
|---|---|---|
| Monthly fee | Does not exist | From ~€230/month |
| VAT on invoices | Does not apply | 21% national |
| Liability | Limited to capital | Unlimited |
| Stripe / PayPal | Yes, with a US account. | Limited |
| Setup cost | From €999 comprehensive | Practically free |
Delaware vs New Mexico: which state to choose
Delaware: reference for investors and tech platforms. Annual Franchise Tax. New Mexico: total anonymity, no Annual Report, lowest costs. The best option for freelancers and digital businesses without investors.
Tax obligations in Spain with an LLC
- Personal Income Tax (IRPF): Profits are declared as economic activity income.
- Form 720: Mandatory if assets abroad exceed €50,000.
- Form 5472 + Form 1120: To the IRS for foreign-owned disregarded entities.
See guide: how to create an LLC in New Mexico • Single vs multi-member LLC
An LLC (Limited Liability Company) is a Limited Liability Company in the United States, which can be created and operated by Spanish residents 100% online. It offers numerous tax advantages that can be very beneficial for those who have online businesses, ahigh tax burden, foreign partners, foreign clients, etc.. Here we will explore why you might consider creating an LLC if you live in Spain.
Reasons to consider creating an LLC if you live in Spain
If you are a business owner in Spain, you are likely familiar with the tax and administrative challenges involved in running a business. Taxes, self-employed contributions ("cuotas de autónomos"), personal income tax (IRPF), corporate tax, social security (SS), VAT and other expenses can significantly reduce your earnings and make entrepreneurship a complicated and tedious task.
Fortunately, there are tax strategies that can alleviate many of these problems: the creation of an LLC in the United States can be a good option if you offer digital services, foreign clients, online activities, etc... An LLC offers numerous tax and administrative advantages that can be very beneficial for your business. Let's look at some of the reasons why an LLC could be a good option:
1. Ease of Creation
The process of creation of an LLC is quick and simple. You can create the company yourself in a matter of days and start invoicing in a very short time. In some states, like Delaware, you can even opt for services that streamline the process.
At Elutax we offer the LLC creation service in just 4 days with the EIN, company address, registered agent, and articles of incorporation. You can request information on this page.
2. Low Maintenance Costs
Maintaining an LLC is economical. Maintenance costs are limited to annual state fees, which are usually affordable. This means you can operate your LLC with lower overhead compared to other types of companies.
Specifying the maintenance costs of an LLC in New Mexico or Delaware: State fees (approx. $100 annually), Annual Reports (approx. €350), Addresses (+€150 annually). For less than €600 you can keep your LLC up to date.
3. Tax Benefits
One of the main advantages of having an LLC is the reduced tax burden. If you do not make sales in the United States, you likely do not have to pay taxes there, except for annual state fees. Taxes are handled primarily in Spain, and you as an individual are responsible for declaring income and paying the corresponding taxes.
4. Anonymity
In some US states, information about LLC members is kept hidden (Corporate Veil) in public records. This means your personal data will not be easily disclosed and will only be shared in specific legal situations, such as with banks or the IRS.
Some states in the United States that have historically been known to provide a higher degree of aanonymity to LLCsare Delaware, Wyoming, New Mexico, and Nevada.
5. Simplified Tax Filing
LLCs only need to file taxes once a year, and the forms do not require exhaustive accounting details. This simplifies tax filing and reduces the administrative burden. The tax filing that an LLC managed by US non-residents must do is the 1120 and the 5472
6. Limited Liability
As with other limited liability companies, LLC managers have limited liability. This protects your personal assets in the event of legal or financial issues for the company.
7. Bank Account Flexibility
You can open bank accounts and use payment gateways in the United States for your LLC, which facilitates international financial transactions. Some neobanks we recommend for operating LLCs from Spain are Wise, Mercury, Levro, and AirWallex.
8. No Need to Be Self-Employed ("Autónomo")
Unlike many companies in Spain, it is not mandatory to be registered as self-employed ("autónomo") to own an LLC. This can save you additional burdens and bureaucratic procedures. In case of generating income with the LLC, you must pay tax on that income in your tax return, but you are not obliged to be self-employed.
9. Managed by Non-Residents
An LLC can be created and operated by a US non-resident; for example, a Spaniard can create an LLC and invoice from it, issue invoices, send and receive transfers, etc.
❌Disadvantages of LLCs
Although LLCs offer many advantages, it is also important to keep in mind some potential disadvantages:
1. Pass-Through Taxation (transparent)
LLC profits pass through to the managers, who must pay the corresponding personal income tax (IRPF) on the earnings. This means that if the LLC makes a profit, the managers must pay taxes on that income in Spain.
2. Filing Costs
Filing forms such as the 1120 and 5472 can entail additional costs if the assistance of an advisor is required. These forms must be filed annually and may involve filing fees.
3. Delay in Obtaining the EIN
Obtaining the EIN (Employer Identification Number) is an essential step in the process of creating an LLC from Spain. However, a notable disadvantage is the delay in the EIN acquisition process, which can extend from 2 to 3 months.
At Elutax we have official managers with direct contact at the IRS who process the EIN in 5 business days via "physical mail". If you want to apply for the Express EIN, you can send us an email to info@elutax.com attaching the articles of incorporation and the manager's name.
Frequently Asked Questions
Can I create an LLC in the USA while being a resident of Spain?
Yes, Spanish residents can create an LLC in the United States without needing to reside in the country. The process can be completed online and no physical presence in the US is required. At EluTax we create LLCs in NM or Florida in 3 days and receive the EIN in 2 business days.
Is it legal to have an LLC in Spain?
Have a An LLC in Spain is legal, you can create as many LLCs as you want, you just have to comply with the tax obligations that I will mention later.
Do I have to report to the Tax Agency (Hacienda) if I have an LLC?
No, residents in Spain must report to the Tax Agency only if the total assets of said LLC exceed €50,000. In that case, you must report the LLC as an asset abroad using form 720. However, as a Spanish resident, you are obligated to report income obtained abroad and declare it in your personal income tax (IRPF). (If your LLC is not yet profitable, you don't have to report it to Hacienda) 😉Does the Tax Agency know if I have an LLC in the USA?
Neither the states nor the IRS
inform foreign entities report to foreign entities Can I have an LLC and an LLP at the same time?
What business models are suitable for an LLC?
Recommended activities to invoice from an LLC are generally those that they have no physical nexus or employees. If you activity is online and you do not need an office, warehouse, employee.. to carry out your activity then invoicing it from the LLC will not be a problem.
Restaurants, real estate, services requiring physical presence, a warehouse or office with materials needed for the activity... These are some examples that should not be billed from a foreign company.
E-Commerce as long as you outsource everything, logistics, importation, customization, etc. Dropshipping in that case is viable to bill with the LLC. Consulting, trading, digital services or products, freelancer, online training, content creator, affiliate marketing, media buyer. These are some businesses suitable for the LLC.
Requirements to create an LLC?
Be over 18 years old, have more than 500€ to pay for the creation of the LLC and forms 1120 and 5472. A minimum knowledge of your tax obligations, both with the IRS and with the AEAT. Passport and ID, usually they do not ask for your details but sometimes it comes in handy for example for the Registered Agent.
Do you have to pay VAT with an LLC?
does not exceed €10,000does not exceed €10,000With LTDs or LLPs you do not pay VAT until you exceed €80,000
Do I have to be self-employed if I have an LLC?
No,if you own an LLC and are a Spanish tax resident you are not obliged to be self-employed to declare that income, you can simply pay the corresponding VAT.
Is it legal if all my clients are Spanish?
If all youractivity coreis in Spain, the Spanish tax office might try to tell you that you should pay taxes in Spain because all your clients are here, however, in the case of LLCs, this does not apply.
LLCs arepass-through companiesand deep down do not separate your natural person from your legal person, therefore it is not a company and you are the same thing. Therefore, having entirely Spanish clients is the same as being self-employed.
How much does it cost to create an LLC?
Creating an LLC usually costs about €500, the EIN from €100 to €250. The registered agent and address about €200 per year. To all this, you must add the training time to learn how the process works. We leave everything to you for €599.
Tax Strategies Operating an LLC
As experts in Tax Engineering, we will share some Tax Strategies that our clients use when operating their LLC from Spain or Europe. Before embarking on the path of operating an LLC or establishing ties with your company in Spain, it is highly recommended to have the services of a Tax Advisor with experience in Spanish Taxation and US LLCs. In this financial and legal scenario, their experience can make a difference when designing solid and effective tax strategies that comply with all legal requirements and allow you to make the most of the available opportunities.
1. Billing Services through the LLC
An LLC is a completely independent legal entity that allows the issuance of invoices for services or digital products. With tools like Stripe or Wise, you can set up bank accounts and payment gateways in the name of your LLC. From these platforms, you can receive card payments, manage subscriptions, issue invoices, and receive international transfers, among others.
2. Intermediation Services
US LLCs can also function as intermediaries between suppliers and your company. Imagine that your company hires a Digital Marketing service from a company in Argentina. In this case, the LLC can act as an intermediary: it hires the service and issues an invoice to your company, charging a higher fee as an "intermediary". This helps to increase the company's expenses in a legal and effective way.
3. Increasing Your Company's Expenses in Spain
If you are self-employed or have a company in Spain, by hiring the services of your US LLC, you have the opportunity to increase your expenses and, therefore, reduce Corporate Tax (IS) or Personal Income Tax (IRPF). It is important to note that this process must involve the actual provision of a service by the LLC to your company.
4. Consulting with a Tax Advisor
An additional strategy you can consider when operating your LLC is hiring the services of a Tax Advisor specialized in the field of Tax Evasion or Tax Engineering. This professional will be able to analyze your situation individually and optimize your tax strategies in a more advanced way, resulting in an effective reduction of your business's tax burden. In EluTax, we have a team of highly trained Tax Advisors specialized in Spanish, American, and Estonian Taxation.
5. Foreign Partners
Multi-Member LLCs pass-through companies (pass-through) transparent,exist in many other jurisdictions besides the US. Originally they were born to respond to the need for two or more partners from different jurisdictions to partner in a way that would not imply double taxation. Being able to take advantage of the tax benefits that these companies entail and making the returns transparent to each individual partner.
Creating an LLC through a specialized service
Creating a company in the United States can represent a challenge if you lack operational experience in this country. In the Spanish market, although there is a wide variety of options, it is rare to find a professional alternative that has experts in establishing companies abroad and in tax engineering.
Although setting up an LLC is a relatively straightforward process, one cannot ignore the series of legal procedures inherent to it: drafting bylaws, selecting the state of registration, choosing between a single-member or multi-member LLC structure, deciding between a C-Corp or LLC, understanding US taxes for non-residents, opening bank accounts and taking advantage of the benefits the country offers your business.
In EluTax, our trajectory has led us to design the «LLC creation service» package in the United States, with the aim of allowing you to focus fully on your business while entrusting the creation, management, and optimization of your LLC to expert hands, ensuring at all times its full regulatory and fiscal compliance.
How is an LLC taxed in Spain?
LLCs created by Spanish residents have certain obligations when operating and maintaining an LLC, the main ones being paying IRPF on the LLC's income at the end of the year due to its transparency and reporting the ownership of the LLC on form 720 if assets exceed €50,000.
1. Taxation of LLC income on the tax return
LLCs are considered transparent entities, which implies that you and the LLC are considered as one. At the end of the fiscal year, if the LLC has funds in bank accounts, it is considered a profit, which must be declared on your IRPF.
This income is considered obtained directly by the member and therefore must be declared as part of income from economic activities if a business or professional activity is carried out. This income is included in the tax return using IRPF form 100 (Personal Income Tax), and must be specified in detail according to the regulations of the direct estimation regime (normal or simplified) applicable to economic activities.
If you do not do so, it is important to keep in mind that it could be interpreted as tax evasion for concealment of funds. It is crucial to mention that there is no automatic exchange of data between the tax authorities of the United States and Spain, since the United States is not part of the CFC, CRS.
2. Declaration on Form 720
In addition to including these incomes in the IRPF tax return, tax residents in Spain may also be obliged to report the ownership of shares or participations in foreign entities on form 720, which is the informative declaration on assets and rights located abroad, if the total value of the investment exceeds 50,000 euros.
Conclusion LLC from Spain
Creating a US LLC can offer significant benefits for entrepreneurs living in Spain. From reducing the tax burden to simplifying business administration, LLCs are an attractive option for those looking to improve their financial and operational situation. However, it is important to understand all legal and tax implications before making a decision. If you are considering this option, we recommend consulting with a legal or tax advisor to ensure you make the right decision for your business and personal situation.
Note: This article provides general information and does not constitute legal or tax advice. It is important to seek professional advice before making financial or legal decisions.
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10 Responses
Hola,
No me queda claro si siendo español y teniendo una LLC es legal teniendo solo clientes en España.
Yo en mi caso quiero vender en Europa, en ese caso no habría problema no?
Gracias de antemano.
Un saludo.
Hola, si todos tus clientes son Españoles y el único sentido de la LLC es pagar menos impuestos no es del todo legal. Sin embargo si tienes clientes internacionales y utilizas la LLC para mejorar la operativa del negocio, ya sea con cuentas bancarias en bancos extranjeros, mejor gestión etc.. si es legal. Puedes enviarnos un correo para ve tu caso.
Hola: en mi caso tengo una SLU me dedico al sector inmobiliario y la mayoría de mis clientes son españoles, seria legal tener un LLC?
Hola Lis, es viable si. Pero hay que ver el caso en detalle.
hola.
tengo varias dudas.
tengo una tienda online ( trabajando desde el domicilio.) venta de productos a distancia B2C
clientes mayoritariamente en la UE y EEUU. españa apenas una venta anual o incluso menos.
preguntas. :
Al facturar como LLC Americana tendré que añadir IVA a las ventas en la UE?
La contabilidad de la empresa la puede hacer un contable en españa para enviar los datos cuando sea necesario en la presentacion de cuentas anuales al IRS?
En españa simplemente tributas en la declaracion de la Renta por tus beneficios sin presentar cuentas de la empresa?
Gracias!
POR FAVOR CONTESTEN 🙂
Hola Carlos, si superas ciertos umbrales si debes pagar IVA en país de destino. El límite suele estar en los 10.000€. Has de presentar reportes anuales al IRS correcto. Nosotros ofrecemos todos esos servicios. Un saludo.
Buenos días,
Tengo una empresa en España que opera principalmente en nuestro país, hace 1 año creamos una LLC en USA desde España con una tienda online dedicada para la venta a USA y Canadá.
Hemos pensado en la idea de que la empresa española que tenemos sea la subcontratada por la empresa de USA LLC en todo lo referente a la impresión y distribución de sus productos en todo el mundo. Es decir USA LLC externaliza tanto el soporte de marketing, publicidad, atención cliente, gestión de sus pedidos, impresión y entrega a sus clientes, y la empresa actual española sea su proveedor principal.
En este escenario, ¿Podríamos evitar el pago de IVA en España cuando los clientes sean de España o la UE?
Que otras alternativas me aconsejais en el caso de que esto no sea posible… Saludos
Buenos días Francisco,
No vais por mal camino, podemos ayudaros. Disponemos de una estructura que otorga personalidad jurídica a la LLC para evitar la transparencia, encajaría con vuestro perfil.
Sin embargo, para abordar correctamente tu consulta te recomendamos contratar una asesoría fiscal. Contamos con 2 opciones;
Junior advisor consultations (100€) – https://elutax.com/asesoria
Senior advisor tax plans (250€) – https://elutax.com/planificación
Hola.
¿Cúal el valor neto que me quedaría con un bruto de 70.000€ anuales? Teniendo en cuenta todos los costes por supuesto.
Costes con nosotros de 1000-2000. Si tu bruto es de 70.000 y te lo traes a la renta en España te quedaría algo más que 55.000€, sin embargo; si tu actividad es online, clientes o socios extranjeros etc.. podemos optimizarlo más aún.