Planning to Expand to Spain? Choose the Right Structure
Foreign companies looking to enter the Spanish market typically consider two legal options:
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✅ Subsidiary – An independent Spanish company with its own legal personality
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✅ Branch (Sucursal) – An extension of the parent company with limited independence
Both are valid routes, but they have very different legal, tax, and compliance implications.
⚖️ Legal Differences: Subsidiary vs Branch
| Feature | 🇪🇸 Subsidiary | 🌍 Branch |
|---|---|---|
| Legal Status | Separate legal entity | No legal personality (part of parent company) |
| Liability | Limited to the subsidiary’s assets | Parent company fully liable |
| Governing Law | Spanish Corporate Law | Parent’s jurisdiction + Spanish Commercial Code |
| Management | Own directors and board | Managed by a representative of the parent |
| Accounting | Independent accounting | Integrated into parent’s accounts |
🧾 Taxation in Spain
| Tax Element | 🇪🇸 Subsidiary | 🌍 Branch |
|---|---|---|
| Corporate Tax | Taxed as Spanish resident (25%) | Taxed on local profits (25%) |
| Withholding Tax on Profits | Yes, when remitting to parent company (unless exempt by DTT) | Generally no withholding tax |
| Double Tax Relief | Via treaties | Via treaties |
💡 Tip: Spain has over 90 Double Tax Treaties (DTTs) to avoid double taxation. Using a branch may simplify profit repatriation, while a subsidiary allows better tax planning and shielding of liabilities.
🛠️ Set-Up Process
🏢 Setting Up a Subsidiary
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NIE for directors
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Name certification & company bylaws
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Notarized deed of incorporation
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Tax registration (NIF)
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Registration in the Mercantile Registry
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Opening a business bank account
🌐 Setting Up a Branch
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Legalized parent company documents
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Power of attorney to Spanish representative
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Certificate of good standing
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Tax registration (NIF)
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Registration in the Mercantile Registry
🕒 Time to register:
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Subsidiary: 2–4 weeks
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Branch: 2–3 weeks
🤝 Pros and Cons
✅ Subsidiary – Best For:
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Companies wanting operational independence
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Risk management (limiting liability)
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Long-term expansion plans
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Local hiring and contracting
✅ Branch – Best For:
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Testing the Spanish market
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Quick setup with fewer regulatory burdens
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Centralized decision-making from HQ
🌍 Real-World Example
A US tech company wants to hire local developers in Spain and raise EU venture capital.
Best choice? A subsidiary, which allows it to operate independently and receive investment under Spanish corporate law.
⚖️ How Borderless Lawyers Can Help
We assist foreign businesses in:
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📄 Registering subsidiaries or branches
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🔍 Due diligence on structure choice
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🏛️ Drafting company statutes and power of attorney
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🧾 Handling tax ID and registrations
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📚 Ongoing legal and accounting compliance
💬 Client Testimonial
“We weren’t sure whether to launch a branch or full company in Spain. Borderless Lawyers gave us clarity and handled the entire setup with speed and transparency.”
— Camila H., Colombia
📞 Expand into Spain with Legal Confidence
Let us guide your international expansion. Whether you’re launching a branch or subsidiary, we’ll make sure your business enters the Spanish market on solid legal ground.