The process of opening a branch office in Spain
Are you considering opening a branch office or a subsidiary of your company in Spain? This is becoming a common consideration for many companies as Spain offers an economic environment that welcomes growth and new businesses. The process to open a branch office in Spain can be a lengthy one and there are many considerations that need to be taken into account before business can begin. Lusa Legal is a Spanish based law firm that specializes in corporate law. We are able to provide you with all the pertinent information that you require to make the right decisions for your company.
What is the difference between a branch office and a subsidiary in Spain?
One of the first things to consider when looking into moving your business into Spain, is whether you will open a branch office or a subsidiary of your company. A branch office is not considered an independent legal entity and the foreign parent company is responsible for all of its debts and any liabilities that it incurs in Spain. A subsidiary is considered as independent and is its own legal entity, responsible for its own actions within Spain.
Considerations for choosing between a branch office and a subsidiary in Spain
Our experts at Lusa Legal look forward to discussing the merits of both types of businesses with you, in order to determine whether a branch office or a subsidiary is the best option for you and your business. There are, however a few things to consider when making this decision:
- Opening a branch office does not require a minimum share capital amount at the time that it is started, whereas a subsidiary requires a €3000 minimum share capital amount for a Limited Liability Company (LLC) and €60,000 for a Public Limited Company (PLC).
- The parent company of a branch office is responsible for all actions and all liabilities of the branch location. A subsidiary is responsible for all of its own actions and liabilities and the parent company is not affected by these.
- When you open a branch office in Barcelona or anywhere in Spain, you should declare taxes as a non resident legal entity without any deductions, unless there is a double taxation agreement with your home country. In the case of a subsidiary, you will pay taxes according to the Spanish income company tax.
- The primary governing body and board of administration for a branch office is the person who is acting as representative for that location. In the case of a subsidiary, the governing body is made up of the shareholders of the parent company.
What are the requirements for opening a branch office in Spain?
There are numerous documents required when applying to open a branch office in Spain such as:
- A certificate proving incorporation of the parent company
- A certificate proving that the parent company is in good standing
- The parent company’s articles of association and memorandum
- A Spanish tax identification number
- A power of attorney that has been legally notarized
- A Digital Certificate
- A proper residency certificate obtained by the branch office representative
- Inscription on the corresponding Commercial Registry
What are the requirements for opening a subsidiary in Spain?
To open subsidiary Barcelona, or anywhere in Spain, there is a great deal of documentation that is required. This process is a very detailed and lengthy one, often taking up to two months to complete and is much more complicated than the procedure for opening a branch office. Our team at Lusa Legal will be present during this registration period to assist you.
Opening a subsidiary requires:
- A tax identification number
- Registration with the Spanish Commercial Registry
- A Certificate of Denomination issued by the Spanish Commercial Registry
- A Spanish corporate bank account containing the required capital to fund the start-up of the business
- A deed of incorporation notarized in front of a Spanish Public Notary
- A completed copy of form D1-A (declaration of foreign investments) submitted to the Registry of Directorate General for Trade and Investments
Opening a branch office in Spain with Lusa Legal
In order to open a representative office in Spain or open a subsidiary in Spain, there are numerous considerations that must be taken into account and multiple steps and procedures that must be correctly followed to ensure success. Our international team at Lusa Legal are proven experts in the field of corporate law, and we have years of experience helping businesses like yours succeed in Spain. If you are considering moving a branch office or a subsidiary of your parent company into Spain, we are here to help. Allow us to provide you with all the answers that you need and share our guidance to make this process a much easier one for you. You can contact us today:
+34 605 33 60 90 (Send us a WhatsApp message, and we will reply as soon as possible)
* Estimated service price, total amount will depend on the particular case and additional services required.
VAT is not included in the price.