How to set up a company (SL) in the Balearics

Setting up an SL (Sociedad Limitada, Spain's equivalent of a limited company) in the Balearics costs between 500 and 3,000 euros depending on the provider, and takes 2 to 4 weeks, with the legal minimum capital cut to just 1 euro since the 2022 reform. Here are the real steps, what it actually costs, and where to apply in Palma, Ibiza or Menorca.

What are the steps to set up an SL?

1. Certificacion negativa de denominacion social: applied for at the Registro Mercantil Central, up to 5 names proposed in order of preference, a wait of 24 to 96 working hours, valid 3 months to sign the deed (the name reservation lasts 6 months in total).
2. NIE for every foreign shareholder or director, including non-residents: without it you cannot appear on the deed of incorporation.
3. Payment of the share capital (see the amount below), certified by a simple declaration before a notary since the 2022 reform, with no bank certificate required.
4. Drafting the articles and signing the deed of incorporation before a notary.
5. Provisional tax number (NIF) from the Agencia Tributaria (Hacienda).
6. Registration with the Registro Mercantil, the provincial companies register, in Palma for the whole of the Balearics.

A faster route exists through CIRCE (the business creation information centre and network) and the Documento Unico Electronico (DUE), filed at a Punto de Atencion al Emprendedor (PAE): the steps with the register, Hacienda and Social Security are then coordinated automatically. Only signing the deed still requires an in-person appointment.

How much capital do you need to set up an SL?

Since Ley 18/2022 "Crea y Crece", in force since October 2022, the legal minimum capital for an SL fell from 3,000 euros to 1 euro. As long as capital stays under 3,000 euros, three compensating safeguards apply: at least 20 percent of annual profit must feed the legal reserve until it reaches 3,000 euros; no dividend can be paid out if equity falls below 1,800 euros (60 percent of the legal minimum); and if the company is dissolved with unpaid debts, shareholders and directors remain jointly liable up to 3,000 euros. Worth noting: in practice, several local business-formation agents still recommend capital higher than 1 euro, for the company's credibility with banks and commercial partners, even though it is no longer a legal requirement.

How much does it really cost, and how long does it take?

These ranges come from formation agents and legaltech platforms, not a single official rate published by the ministry: always ask for a precise quote before you commit. On timing, the fast CIRCE/PAE route takes 2 to 10 working days, against 15 days to 4 weeks for the standard route.

Where do you apply in the Balearics?

The Registro Mercantil de Illes Balears is at Carrer Alfons el Magnanim no 2, in Palma (tel. 971 755 000). For guidance, the Cambra de Comerc de Mallorca offers free orientation sessions through its "Mallorca Emprende" programme, co-funded by the European Social Fund, with a specific track for women entrepreneurs (PAEM). The Camara de Comercio de Ibiza y Formentera offers equivalent support on the Pitiusas. For financing, the guarantee company ISBA, backed by the Balearic Government, allocated 22.2 million euros in 2025 to 309 new companies, for an average guarantee of 78,120 euros. The IDI (Balearic business innovation institute) offers support centred on innovation and digitalisation, useful once the company is running rather than at the moment of setting it up.

SL or autonomo: how do you choose?

The autonomo status (self-employed) and the SL do not answer the same need. Autonomo status, with no capital and light formalities, puts your entire personal wealth at risk, but is generally more tax-efficient for a modest activity. The SL protects your personal wealth (liability limited to the capital contributed) but involves heavier formalities, and becomes worthwhile above roughly 40,000 to 50,000 euros of annual net profit, or to bring in shareholders. Our guide to becoming self-employed (autonomo) in the Balearics covers the other option in detail. If you are a non-EU national, note that being a director or shareholder does not by itself grant you the right to live and work in Spain: you still need the appropriate visa or residency route, as covered in our visa guide (the entrepreneur visa is one option worth exploring with an immigration lawyer if the business itself is your route in).

Frequently asked questions

Do I need a NIE before I can set up an SL?

Yes, it is compulsory for every foreign shareholder or director, even non-residents. Without a NIE you cannot appear on the deed of incorporation.

Can a non-EU citizen be a director of a Spanish SL?

Yes, holding a NIE is the requirement for the paperwork itself. Whether you can also live and work in Spain to run the company day to day is a separate residency question, so check the right visa route with an immigration lawyer if that is your plan.

For the next step in your professional move, our guide to finding a job in the Balearics covers the employed alternative.

Cost ranges come from formation agents and legaltech platforms, not an official single rate; always confirm current fees with a notary and a gestoria before you commit. Information verified in August 2026. The Daily Baleares is an AI-assisted publication with human review.