Opening Branches of Foreign Companies

Spain is attractive to entrepreneurs due to its welcoming attitude toward foreigners who decide to establish a business in its territory. The country offers a favorable economic environment and provides solid protection for company assets. The requirements for opening a representative office of a foreign company in Spain are nearly identical to those for private individuals registering an SL or SA—structures comparable to the Russian LLC or JSC.

However, it’s important to note that bureaucratic hurdles can delay the process from the decision to establish a branch or subsidiary to its operational launch. These delays are most commonly caused by documentation errors or unintended legal violations. We are ready to help you avoid unnecessary time loss and financial costs, as we know the correct procedures, the proper order of actions, and we stay up to date with the latest developments in Spanish corporate law.

If you’re planning to open a representative office of your company in Spain, it’s essential to understand the difference between a branch and a subsidiary company. The main difference lies in their legal status: A branch (sucursal) is not considered a separate legal entity. This means that all liabilities and obligations incurred in Spain are the direct responsibility of the parent company. A subsidiary (filial), on the other hand, is an independent legal entity established under Spanish law. It bears full responsibility for its own operations and financial obligations.

Before making a decision, it’s important to evaluate the specific features of opening and operating a branch versus a subsidiary of a foreign company in Spain. Consider the following points:

• A branch does not require a minimum share capital, since the parent company bears full responsibility for its activities. 
• A subsidiary, depending on its legal form, requires a minimum share capital of €3,000 (for an SL) or €60,000 (for an SA).
• To manage a branch, you must appoint a resident of Spain as the legal representative. 
• A subsidiary does not require a Spanish resident as a director or legal representative.
• The parent company is fully liable for the operations and debts of its branch in Spain. 
• A subsidiary is a separate legal entity, which bears responsibility for its own actions and financial obligations.
• A branch must submit tax declarations on behalf of the parent company and cannot claim tax deductions available to Spanish entities, unless a double taxation agreement applies. 
• A subsidiary is fully subject to Spanish tax law, paying taxes locally and accessing applicable deductions and benefits.

Finally, it’s worth noting that opening a subsidiary usually takes more time than registering a branch, due to the additional legal and administrative procedures involved.

To establish a branch of a foreign company in any region of Spain, you must provide the following documentation—some of which pertains to the parent company:

• Certificate of Incorporation
• Articles of Association and Founding Agreement
• Financial Statements

Additional Required Documentation:

• NIE (Número de Identificación de Extranjero)
• Tax Identification Number in Spain for the branch representative 
• Power of Attorney – Notarized, authorizing a representative to act on behalf of the parent company in Spain 
• Digital Certificate – For secure electronic transactions and communication with Spanish authorities 
• Tax Residency Certificate – For the appointed representative of the branch 

It is also necessary to obtain an excerpt from the Commercial Registry of the country where the parent company is registered (equivalent to Spain’s Mercantile Registry).

To establish a subsidiary on Spanish territory, a substantial set of documents is required, including:

• NIE (Número de Identificación de Extranjero)<
  Spanish tax identification number for foreign individuals involved in the company
• Certificate of Incorporation
  Confirms legal formation of the subsidiary 
• Company Name Certificate
  Confirms the chosen name is unique and registered 
• Proof of Corporate Bank Account
  Confirmation from a Spanish bank that a corporate account has been opened and the required share capital has been deposited (the amount depends on whether you’re setting up an SL or SA) 
• Notarized Articles of Incorporation (Deed of Incorporation)
  Legalized and signed before a notary 
• Foreign Investment Declaration (Form D1-A) Mandatory declaration for registering foreign investment in Spain 

Additional requirements may apply depending on the specific circumstances of your business — our consultant will advise you during a preliminary consultation.