BLOG POST BY SCORNIK GERSTEIN LLP
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 SPAIN?
The procedure to open a subsidiary or a branch in SP is similar. The common requirements include the following:
1. Opening a bank account in the company’s name, which will be used for depositing the share capital.
2. A copy of the certificate of incorporation of the parent company.
3. 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.
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.
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