The Tax Identification Number (NIF) is issued by the Spanish Tax Agency to identify individuals and legal entities for tax and administrative purposes. Both domestic and foreign companies must obtain a NIF to operate legally within Spain. The NIF varies based on the legal structure of the entity and can be identified by its initial letter.
Below, we outline the main types of NIF relevant to foreign businesses commencing operations in Spain:
NIF Starting with “A” – Public Limited Companies (S.A.)
A NIF beginning with A is issued to Public Limited Companies (S.A.), a common legal structure for large businesses. These companies feature a capital structure divided into shares, facilitating ownership transfer among shareholders. Shareholders’ liability is limited to their capital contributions.
- Example format: A12345678
NIF Starting with “B” – Limited Liability Companies (S.L.)
NIFs starting with B identify Limited Liability Companies (S.L.), a widely used legal structure in Spain, particularly for small and medium-sized enterprises (SMEs). Similar to S.A.s, shareholders’ liability is limited to their capital contributions. However, the capital is divided into ownership interests rather than shares, making it more suitable for family-owned businesses or SMEs.
- Example format: B12345678
NIF Starting with “W” – Permanent Establishments of Non-Resident Entities
NIFs starting with W are assigned to permanent establishments of foreign companies operating in Spain without establishing a subsidiary or local legal entity. A permanent establishment could be an office, branch, or other facilities representing the foreign company’s economic activities in Spain. Such entities are subject to Spanish tax regulations for operations conducted within Spanish territory.
- Example format: W12345678
NIF Starting with “N” – Foreign Entities
NIFs beginning with N are issued to foreign entities without legal personality in Spain that nonetheless have tax obligations due to economic activities within the country. These entities typically require this NIF for specific transactions or investments, without establishing a permanent presence in Spain.
- Example format: N12345678
Other Relevant Types of NIF
In addition to the above, other NIF types correspond to less common legal structures:
- C: Co-ownerships or partnerships engaging in shared economic activities
- D: Civil societies, which may or may not have legal personality, created for joint economic activities without forming a commercial entity
- E: Property communities
- F: Cooperatives, organisations built on cooperation and mutual assistance among members
- G: Associations and foundations, typically non-profit entities.
Conclusion
For foreign companies starting operations in Spain, selecting the most appropriate legal structure and obtaining the correct NIF is a vital step. Ensuring compliance with tax obligations and operating within the legal framework will pave the way for successful business activities in the country.