Updated: Nov 6
The article will explain how you can set up a non-profit association/ foundation in Spain. it will explain the pre-requirements and the legislation.
Registering a non-profit association in Spain
To register a non-profit association in Spain, it must be created by at least three people and a form of declaration must be submitted to the Registry of Association.
The declaration form includes:
1. A notarized association formation minutes
The formation holds the legal names and citizenships of the creators of the association. Also, it includes the name, address, and country of origin of the association. Additionally, a declaration of the founders’ desire to form the association is included. The agreements between the founders are attached. The founders also declare that the association references and incorporates Articles of Association. Then, the date and location of the minutes signing are written down. Finally, appointed staff for regional governing figures or counsels are given.
· If the founders are legal persons, the acquisition of the formation agreement must be escorted with certification from relevant jurisdiction.
· Certification of identity of the founders is a must if the association is created by · natural persons (i.e non-legal), or individual spokespeople.
2. Articles of Association
Additionally, the Articles of Association need to be notarized. This includes a declaration of the motives and ventures of the association. Also, the association should have a Spanish address. Otherwise, foreign associations are required to institute a branch within Spain.in this case, the association registers at the National Registry of Associations.
3. Requirements and supplemental forms for admission, withdrawal, and termination.
Finally, the administrative requirements and supplemental forms should also be submitted. Withdrawal and termination requirements are required to be followed. These measures guarantee that the association practices democratic administration. Also, a statement has to be made clarifying reimbursement for members or associates for their participation in the association.
Registering a non-profit foundation in Spain
Unlike non-profit associations, foundations are irreversibly dedicated to serving the general interest. Therefore, 70% of the foundation’s annual income must be used for the benefit of the general interest by law under the Act 50/2002. Also, foundations cannot undertake private projects like providing reimbursements to the founders’ next of kin. Generally, scientific research and other projects that are beneficial to the public are allowed. For registry, the Protectorate must approve the foundation’s motives, projects, and the sufficiency of the initial funding.
· A beginning asset of generally at least 30,000 euros, unlike an association where it is free to set up
· A Founding document
· A will (causa mortis) or a notary deed (inter vivos)
· Legal name and address of founder(s)
· The motive of the founder
· The projects the foundation desires to undertake
· An account of the assets of the foundation
· The structure of the foundation board
After the registration
In case of approval by the Protectorate, the foundation progresses to the notary. They aid with the implementation of the establishment of the foundation in Spain. Then, the notary will inaugurate the foundation and register it with the Ministry of Justice’s Foundations Registry. Foreign foundations must establish an office in Spain and be issued authorization by the Spanish Register of Foundations. However, there are certain obligations for foundations to legally operate in Spain:
1. A minute book (Libro de Actas), a recording of all votes, rulings and ventures during meetings.
2. A membership book (Libro de Socios), a recording of all live members
3. An accounting book (Libro de Contabilidad)
These books are legalized at either the Mercantile Registry or at a public notary. Every donation acquired by a foundation must also be declared with the Treasury.
Legislation regarding setting up a new non-profit association/foundation in Spain
For all legislation, it is easiest to contact company formation agencies from law firms in Spain. They can help with the setting up of an association or foundation in Spain.
The main rules of law that apply to Spanish foundations are the Constitution of Spain and the Foundation Act 50/2002. However, there are also regional laws on the regulations of foundations such as in the regions of Navarra, Galicia and Cataluña. Also, the central government of Spain has full jurisdiction. So, it creates and regulates the taxation of foundations and associations in Spain.
Taxes for foreign foundations are specified under the tax act. They are taxed following the statutes for permanent establishment. In other words, taxes only apply to income received through the permanent establishment. Still, since it is a non-profit organization, tax deductions can be acquired. However, foundations with an annual turnover above 2.4 million euros or more than 50 employees must undergo an annual external audit.
Author: Charienne Layson
BA in Humanities: History and Politics
University College Dublin