Buying Spanish Property Through a Company

The short answer

Yes, a company can buy property in Spain and yes, it can borrow against it — but the field of lenders is considerably narrower than for a personal purchase, the loan-to-value is usually lower, the documentation is heavier, and it only makes sense where a specific tax, succession or commercial reason drives it.

That is the whole answer in one paragraph, and for most buyers reading it, the conclusion is that personal ownership is simpler and cheaper. The rest of this page is for the minority for whom it is a genuine question.

One boundary first, because it matters. Whether to own through a company is a tax question. It turns on your own country's treatment of corporate property holdings, Spanish corporate and non-resident taxation, how you intend to use the property, and what you want to happen to it when you die. None of that is mortgage advice and none of it is ours to give. Take it to a tax adviser who is qualified in both jurisdictions, get an answer, and only then ask whether the financing works. Doing it the other way round is how people end up with a structure that suits a bank and costs them tax for twenty years.

Spanish SL or a foreign company

The two structures are treated very differently by Spanish lenders.

A Spanish SL

A sociedad limitada is the ordinary Spanish private limited company. It is incorporated in Spain, has a Spanish tax number, files Spanish accounts and is visible to a Spanish bank in the same way a Spanish business customer is. Where corporate lending happens at all, this is usually the structure it happens to.

It is not free. There is share capital to subscribe, an incorporation cost, an ongoing obligation to keep books and file annual accounts and corporate tax returns, and in practice an accountant to pay every year. If the company exists only to hold one holiday apartment, those costs are a real annual charge against a benefit you should have quantified in advance.

A foreign company

A company incorporated elsewhere — a UK limited company, a Dutch BV, a German GmbH — can own Spanish property, and can in principle borrow against it. Far fewer Spanish banks will lend to one.

The reason is not prejudice, it is enforcement and verification. The bank has to satisfy itself about a legal entity governed by a foreign company law, read accounts prepared to a foreign standard, establish who ultimately controls it, confirm that the person signing has authority to bind it, and know what it would actually do if the loan went wrong. Every one of those is answerable, and every one adds cost and risk to a loan the bank can write more easily against an individual.

Offshore structures in low-tax jurisdictions are a further step again. Several Spanish banks simply decline them as a policy matter, and Spain applies a special annual levy to property held by entities resident in certain jurisdictions. That levy is a tax question, and it is exactly the sort of thing your tax adviser should be pricing before anyone talks to a bank.

Why fewer banks lend to corporate buyers

Understanding the bank's view makes the whole exercise less frustrating.

• There is no consumer file to assess. A non-resident personal application is assessed on documented income against a scorecard the bank runs every week. A corporate application is a small commercial credit decision, which a different department makes, more slowly.
• Consumer mortgage protections do not apply in the same way. Ley 5/2019 is consumer-protection legislation. A loan to a company buying an investment asset is not the same product, which changes the paperwork, the protections and sometimes the pricing.
• Beneficial ownership has to be established. Anti-money-laundering rules require the bank to identify the individuals ultimately behind the company, and to document it. A chain of holding companies makes that slow.
• Enforcement is harder. If a personal borrower defaults, the bank's position is well trodden. Against a foreign company with no other Spanish assets, it is less so — which is why personal guarantees from the shareholders are usually required, and why the corporate veil you were buying often ends up qualified in practice.
• Loan-to-value comes down. Corporate lending on Spanish residential property is generally offered at a lower percentage than the 60–70% a personal non-resident applicant would see, which means more cash from you. How residency sets the personal bands →

What the application actually involves

Everything a personal application needs, about the individuals behind the company, plus a corporate layer on top. Expect to be asked for:

• Constitutional documents — the deed of incorporation and current articles, with an apostille and a sworn translation if the company is foreign.
• A current extract from the companies registry showing directors, shareholders and the company's good standing, recently issued rather than historic.
• Two to three years of filed accounts and corporate tax returns.
• Corporate bank statements covering the same period as personal ones would.
• Evidence of beneficial ownership down to the individuals, and identification for each of them.
• Proof of the signatory's authority — a board resolution authorising the purchase and the borrowing, and a power of attorney if the signing happens without them. More on powers of attorney →
• Personal financial documents for the shareholders, because guarantees are normally required. The document checklist →
• A Spanish tax number for the company, and NIEs for the individuals.

Add apostilles and sworn translations to the timetable. Each foreign document needs certifying and translating, each step involves posting an original somewhere, and the four-to-eight-week window that applies to a straightforward personal case is not the right expectation here. The purchase timeline →

When it actually makes sense

Broadly, when the property is part of something larger rather than a holiday home held for its own sake. The recurring cases are a genuine commercial or rental operation of some scale, a portfolio of several properties where the administrative overhead is spread, a succession plan where shares are easier to pass on than real estate, and a buyer whose existing business structure already owns property and for whom this is one more asset in it.

The recurring case where it does not make sense is a single home for personal use. Spain taxes companies that hold property used personally by their shareholders in ways that frequently erase the intended benefit, the annual compliance is a fixed cost against a fixed asset, and the mortgage is harder and smaller. If someone has proposed a company structure for a family holiday apartment, ask them to show you the arithmetic, in writing, from a tax adviser.

What we can and cannot do

We can tell you which of the banks we work with will consider a corporate borrower, what loan-to-value is realistic for the structure you have, what documentation they will want and how long it is likely to take. We can put a properly assembled corporate file in front of the lenders that write this business rather than the ones that will decline it slowly.

We cannot tell you whether to use a company. That is a tax and legal decision, it needs a tax adviser and a Spanish lawyer, and it should be made before you start looking at rates. If you have had that advice and the answer is yes, we can take it from there — and as always, there is no fee to you; the lender pays our commission on completion. The complete guide to Spanish mortgages →