Does it make any difference if I rent mi villa to a Spanish company instead of an individual?

Yes, it does. To start with, companies normally limit the responsibility the may incur into (including due lease rents), up to the amount of their share capital. Another substantial circumstance is the fact that most companies may legally change their board of shareholders as many times they find appropriate without informing anyone; thus the persons you may have seen at the time of contracting the lease may be substituted by others you do not know at all.

A properly drafted lease contract should avoid these and any other risky issues even if the tenant is to be a company.

Emilio Pino – Abogados can help you regarding such contract.

Is there any difference in a Spanish company being a “Sociedad Limitada”, a “S.R.L.” or a “S.L.”?

No, there is not. All these denominations are different ways to call the same kind of company that basically consists in a limited responsibility company (i.e., the shareholders are responsible up to the limit of their respective share capital), with a minimum permitted capital of 3,006 EUR.

I have heard that the S.L. company laws regarding foreign residents buying property in Spain has changed. I remember before there was a limit of 1 to 2 yrs and a max. 30% requirement for passing on or changing names on the stock,otherwise it was considered a private sale and taxed as so with an additional fine. Has this changed? Esp. if one parent who is the holder of the shares wants to pass it to his/her child?What does the new law offer and what one should consider?

The present regulations in force regarding transfers of shares of companies directly (or indirectly) owning real estate properties situated in Spain when they represent 50% or more of the Company’s active (total assets) establish that these share transfers pay a transfer tax as if they were normal real estate transfers. In the present moments, this tax is 7% in Andalucía.

The same tax is applicable to transfers of shares owned as a result of provisions of Spanish real estate properties into companies at the time of the formation of such companies, or of the share capital increases as long as the elapsed time between such provision and the transfer is three years or less (before it was one year). 2007-08-27.

What is the difference between Spanish S.A and S.L. companies? (2006-05-21)

They are not the same even though the S.A companies (or Sociedades Anónimas) and S.L. companies (or Sociedades Limitadas) have many characteristics in common. While S.A. companies are designed for medium to big enterprises and have a minimum share Capital of 60,102 Euros, the S.L. companies can operate with a share Capital of at least 3,006 Euros. Also, S.A. companies have a more strict system of control related to accounts and to actions and obligations where official publicity is forceful.

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