How to Set Up Your Own Limited Company with Spain's PAE Virtual and CIRCE System

When your activity as a freelancer starts growing, or you simply want to start a project as a company from day one, it's common to consider taking the leap to a Sociedad Limitada (SL) — the Spanish equivalent of a limited liability company. The mental image many people have of this process —a notary, a business agency, weeks of paperwork, thousands of euros in capital— is fairly outdated. Today, in Spain, you can incorporate your own SL online, without a mandatory business agency and with a symbolic share capital, thanks to the CIRCE system and its PAE Virtual platform.

What is the CIRCE system

CIRCE (Centro de Información y Red de Creación de Empresas) is the telematic platform run by Spain's Ministry of Industry and Tourism, designed to simplify company incorporation. It works as a genuine one-stop shop: it automatically coordinates the Commercial Registry, the Tax Agency, Social Security and the notary, so you don't have to submit the same paperwork separately to each body.

The core of the system is the DUE (Documento Único Electrónico, Single Electronic Document): a digital form where you enter all the information about your future company (partners, business purpose, registered address, capital) and which, once signed, is automatically distributed to every body involved in the process.

What is the PAE Virtual

The PAE Virtual is the way to file your DUE entirely online, without needing to visit a Punto de Atención al Emprendedor (PAE, Entrepreneur Support Point) in person. You can access it with a digital certificate or Spain's Cl@ve system, and from there manage the entire incorporation of your company yourself, step by step.

A recent addition is the so-called Cartera Virtual (Virtual Wallet), linked to PACDUE (the program that helps you fill in the DUE), which further speeds up identifying the partners within the process.

The steps, one by one

1. Get your digital certificate or Cl@ve. This is the access requirement for both the PAE Virtual and the Cartera Virtual, and every partner who will sign during the process will need one.
2. Reserve your company name. You request a negative company name certificate from the Central Commercial Registry, a document confirming the name you've chosen for your SL isn't already in use. It costs around €18-20 and is usually resolved within 24-48 hours. It's advisable to propose several name options in case the first one isn't available.
3. Access the PAE Virtual and open your DUE. Inside the platform, you select “Creación y cese de empresas” (company creation and dissolution) and choose the legal form (in this case, Sociedad de Responsabilidad Limitada).
4. Fill in the Single Electronic Document. Here you enter the partners' details, a description of the business activity, the registered address, the share capital and the rest of the information that will make up the incorporation deed.
5. The system assigns you a notary. One of CIRCE's advantages is that it automatically coordinates an appointment with a notary (in person or online, depending on the case) to sign the incorporation deed.
6. Sign the deed. Once signed, the system automatically handles registration with the provincial Commercial Registry, obtaining the NIF (tax ID) from the Tax Agency and, where applicable, registering the managing partners with Social Security.
7. You receive the final documentation. With the registry entry and the definitive NIF, your SL is formally incorporated and operational.

Barring complications, the whole process can be completed within 24 to 48 hours of signing — far from the weeks the traditional route used to take.

The big advantage: you no longer need €3,000 in starting capital

For years, incorporating an SL required paying in full a minimum share capital of €3,000. Since Ley 18/2022 (“Crea y Crece”) came into force, that minimum has been reduced to €1. This has removed one of the biggest barriers to entry for anyone wanting to start a business without prior savings to contribute.

Careful, though: this doesn't mean that reduced capital comes “free” or without conditions. If you incorporate your SL with less than €3,000 in capital, the law places you under a special regime until you reach that figure:

• Reinforced legal reserve: you must allocate at least 20% of each year's profit to the legal reserve (versus the usual 10%), until the sum of share capital plus legal reserve reaches €3,000.
• Joint and several liability of the partners: if the company is liquidated and its assets aren't enough to cover its debts, the partners are jointly and severally liable, with their personal assets, for the difference between the capital contributed and that €3,000 figure.
• Limits on dividend distribution: profits can't be distributed if, after doing so, the company's net worth would fall below €3,000.

Put another way: starting with €1 in capital isn't “free capital”, but rather a deferral of that traditional €3,000, which gets completed with reinvested profits or, in the worst case, remains as a latent liability for the partners. Even so, for someone starting out without available liquidity, it's a huge difference compared to the full payment that used to be required.

Other advantages of the CIRCE system over the traditional route

• Lower cost. The process through the PAE is free; you only bear the cost of the company name certificate and the notary, well below what a business agency typically charges to manage the whole process.
• No mandatory business agency. You can handle the entire process yourself, start to finish, from the PAE Virtual, without depending on intermediaries (though in complex cases you can always rely on professional advice).
• Automatic coordination between bodies. The Commercial Registry, Tax Agency and Social Security receive the information directly from the DUE, so you avoid repeating procedures with each one separately.
• Speed. Compared to the weeks the traditional, manually managed notarial route can take, CIRCE allows incorporation to be completed within days.

When it might not be the best route

The CIRCE system is designed mainly for simple incorporations: few partners, no complex non-cash contributions, no foreign partners without a NIE, with a standard business purpose. If your situation is more particular —several investors, complex shareholder agreements, contributing assets instead of cash—, it's usually worth relying on a notary or a specialized agency to review the details with you before jumping into the express route.

The step after incorporating your SL

Creating the company is just the first step. As soon as your SL starts operating, a different challenge appears: keeping track of its finances, its accounts and —if you also invest or hold assets in different currencies— its portfolio, all in an organized way and without relying on a spreadsheet nobody updates. That's precisely where a financial copilot like Finboard can help you from day one.

Have questions about how to organize your SL's finances once it's incorporated? That's a topic that deserves its own post — let us know if you'd like us to prepare it next.