Branches in Spain: Opening a branch in Spain of your company
Any established foreign company may create a branch in Spain, which will operate in our country with the name of the parent company followed by “Sucursal en España” (e.g., the branch in Spain of Money Limited would be Money Limited, Sucursal en España).
The choice between setting up a branch or incorporating a company will depend on a number of factors such as the size of the investment, commercial considerations, expected turnover, etc. We can provide you the best advice on the most convenient structure for your business.
Characteristics of a branch in Spain of your company.
A branch is a dependent establishment of a foreign company, lacking its own legal personality. It acts as an extension of the parent company, conducting business activities in Spain. Key characteristics include:
- No separate legal entity: The branch is not independent from the parent company, which assumes full liability for its actions.
- Dependent management: The branch’s management is subject to the parent company’s directives.
- Fiscal transparency: The branch’s financial results are consolidated with those of the parent company for tax purposes.
- Registration requirements: The branch must be registered with the Spanish Mercantile Registry (Registro Mercantil) and obtain a tax identification number (NIF).
Taxation of a branch in Spain.
A branch is considered a permanent establishment for tax purposes in Spain. It is subject to:
- Corporate Income Tax (Impuesto sobre Sociedades): The branch is taxed on its profits obtained in Spain at the general corporate tax rate.
- Value Added Tax (IVA): The branch is subject to IVA on its sales and purchases of goods and services in Spain.
- Non-Resident Income Tax (Impuesto sobre la Renta de no Residentes): In certain cases, the branch may be subject to this tax on specific income categories.
It’s crucial to consider international tax treaties between Spain and the parent company’s country of residence to avoid double taxation.
Branch vs. Subsidiary.
While both are avenues for foreign companies to operate in Spain, branches and subsidiaries differ significantly:
| Feature | Branch | Subsidiary |
| Legal personality | No separate legal entity | Separate legal entity |
| Liability | Parent company assumes full liability | Limited liability for the parent company |
| Management | Dependent on the parent company | Independent management |
| Taxation | Fiscal transparency, consolidated with parent | Separate tax liability |
| Capital | No minimum capital requirement | 3,000 € required in capital |
Procedure for setting up a branch office in Spain.
- The Board of Directors or governing body of the foreign head office must issue a formal resolution approving the setting up of a branch office in Spain.
- This resolution must be legalized through a notarial authority, which may be a Notary of the country of origin (in which case the document must be and stamped with the apostille of The Hague), a Spanish notary or a Spanish consulate in the country of origin.
- The resolution shall establish at least the domicile of the branch, its activities, tax year, start-up capital (if any), and the identity of its legal representatives and fiscal representative (which must be resident in Spain).
- The legalised resolution, along with a certificate of incorporation and the bylaws of the company shall be translated into Spanish through an official translator.
The whole set of documents must be registered in the Trade Register.
Please provide us your data through our contact form and tell us how can we help you.