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If you are looking to establish a presence within the European Union (EU) after Brexit, you may wish to consider setting up a branch or subsidiary in Spain (SP).
Spanish subsidiary or branch: Which is best?
The key differences to consider when choosing the type entity right for your business model, are listed below:
- A subsidiary is an independent legal entity, responsible only for its own liabilities and debts that it incurs and the parent company is not affected by these whereas a branch is dependent on the parent company, which will be responsible for any liability that the branch incurs.
- There is no minimum share capital amount to set up a branch in Spain. In contrast, establishing a subsidiary requires €60,000 minimum share capital for a Public Limited Company (PLC) and €3,000 for a Limited Liability Company (LLC) although the Spanish media have recently published that the government intends to reduce the minimum share capital to 1 Euro.
What are the main requirements for opening a branch office or a subsidiary in SP?
The procedure to open a subsidiary or a branch in SP is similar. The common requirements include the following:
- Opening a bank account in the company’s name, which will be used for depositing the share capital.
- A copy of the certificate of incorporation of the parent company.
- Obtain (the provisional) and then keep (the definitive) tax identification NIF (número de identificación fiscal) at the Spanish Tax Agency.
The decision of setting up a subsidiary or a branch has to be taken by a general meeting of the shareholders of the parent company and the resolution must be legally translated into Spanish.
A public deed of incorporation must be granted before a Notary Public and then submitted at the Spanish Commercial Registry.
Must I travel to Spain to set up a subsidiary or a branch?
Not necessarily, our team of Spanish speaking lawyers can set up for you a subsidiary or a branch in Spain on behalf of the parent company, through a Power of Attorney.
Written by Laura Gallego Herráez.
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