Opening a Branch in Spain

If you have a business based outside Spain and want to set up a presence in Spain, opening a branch may provide the solutions you’re looking for. This option offers advantages compared to setting up a subsidiary or forming a company in Spain, which we outline below. We also provide information on how to open a branch.

What is a branch?

A branch, known as sucursal in Spanish, is a permanent base for your company in Spain. The branch is owned by your parent company abroad and completely dependent on it.

Unlike a company, a branch is not a legal entity nor is it a separate entity to the parent company. As a result, it has no autonomy.

Discover how to set up a company in Spain

Are there any other differences between opening a branch or a company in Spain?

There are three main differences:

1. A branch does not require any capital to set it up. Companies and subsidiaries do need share capital, although since the Crea y Crece reform of the Ley de Sociedades de Capital the minimum for an SL is €1 rather than the former €3,000.
2. A branch does not have shareholders or a separate administrative body because it is entirely dependent on the parent company.
3. A branch has no legal responsibilities in Spain. Note, however, that it does have tax liabilities – see below.

What are the advantages of opening a branch in Spain?

This form of business means the everyday running of your base in Spain is straightforward. It also makes capital transfers easy since they come from the parent company.

Are there any disadvantages?

Because a branch is not a separate legal entity or have any autonomy, it cannot make any decisions. The decision-making process lies entirely in the hands of the parent company, which has the potential to make it slower and less efficient.

Does opening a branch in Spain involve tax responsibilities?

Yes, it does and if you choose this option, you should make sure that a professional takes care of all tax matters relating to the branch. They include:

• Filing quarterly VAT (IVA) and corporate tax returns.
• Keeping the branch’s accounts for annual consolidated accounts.
• Paying social security contributions for the branch’s employees.
• Avoiding double taxation in Spain (if the parent company is non-resident).

Find out about tax representation in Spain

How do you open a branch in Spain?

You need to follow these steps:

1. Obtain a resolution to open a branch in Spain from the parent company.
2. Name a representative and give them power of attorney to open the branch.
3. Open a bank account in Spain and obtain a NIE (fiscal number) for the representative.
4. Sign the branch deeds at the notary. They include the name of the branch, its activities, registered office and representative.
5. You also need to provide proof of identity of the parent company and show how it is related to the branch.
6. Register the branch at the Company Registry (Registro Mercantil) – registration typically takes around five days.
7. Register the branch with the Spanish tax authorities to obtain your tax identification number.

How can I get help with opening a branch in Spain?

This is just one of the services we provide at Costaluz Lawyers. Get in touch with our expert team to find out how we can help.

Read about working as the director of a UK company from Spain

Reporting: What the Branch Files, and What the Parent Files

A branch does not present its own annual financial reports to the Spanish tax authorities. It submits its accounts to the parent company, and that reporting obligation is fulfilled by the parent as part of its consolidated accounts. Fewer separate legal obligations is one of the practical reasons a branch is chosen over a subsidiary.

On registration, the parent company obtains a Spanish VAT number, and the representative appointed to manage the branch obtains a NIE. Both are needed before the deed of constitution is signed at the notary.