{"id":3904,"date":"2019-06-06T15:18:37","date_gmt":"2019-06-06T15:18:37","guid":{"rendered":"http:\/\/www.ambitassessor.com\/blog\/?p=3904"},"modified":"2023-01-10T14:09:08","modified_gmt":"2023-01-10T14:09:08","slug":"opening-branch-in-spain","status":"publish","type":"post","link":"https:\/\/mgiambit.com\/blog\/opening-branch-in-spain\/","title":{"rendered":"Opening a Branch in Spain."},"content":{"rendered":"

<\/a><\/p>\n

\n
\n

What is considered a Branch in Spain?<\/h3>\n

According to corporate law, a branch is a secondary establishment that has permanent representation and a certain autonomy to manage itself, through which the activities of a company are fully or partially developed (RRM Article 295).<\/p>\n<\/p><\/div>\n

\n

What distinguishes it from a subsidiary?<\/h3>\n

The subsidiary of a foreign company is a Spanish company, independent from the parent company that holds its capital and has its own legal standing.<\/p>\n

A branch, on the other hand, is simply an establishment that is part of the foreign company itself, so it is not a separate or legally independent company.
\n This distinction has very clear consequences in terms of the extent of its responsibility to the parent company and with regards to the activity carried out in Spain.
\n In regard to taxes, the subsidiary is a resident entity and the branch is an entity subject to Non-Resident Income Tax.
\n Subsidiaries can generically deduct expenses incurred from the activity with their parent company, as well as interest payments, royalties, etc., but cannot compensate for their losses. An analysis of the applicable double taxation convention may be extremely important when assessing the fiscal impact of one or the other option.\n <\/p><\/div>\n

\n

What are its main obligations?<\/h3>\n

The branch is effectively a non-resident entity but acts through a permanent establishment. This is why they are subject to the following obligations:<\/p>\n

 <\/p>\n

\n

\"Ambit\"<\/p>\n

Creation<\/b>
\n It is established through a public deed and must be registered in the Mercantile Registry.\n <\/div>\n

\n

\"Ambit\"<\/p>\n

Investment<\/b>
\n The constitution and extension of branches is considered foreign investment in Spain. In general, this will involve its subsequent communication to the Ministry of Economy and Finance Investment Registry\n <\/div>\n

\n

\"Ambit\"<\/p>\n

Identification<\/b>
\n They must obtain a tax identification number and register with the census.\n <\/div>\n

\n

\"Ambit\"<\/p>\n

Accounting<\/b>
\n Branches must keep separate accounts that refer to the business operations carried out and to the assets assigned to it.\n <\/div>\n

\n

\"Ambit\"<\/p>\n

Retentions<\/b>
\n They have to withhold, make prepayments and are subject to retentions under the same terms as resident entities subject to Corporate Tax.\n <\/div>\n

\n

\"Ambit\"<\/p>\n

Legalisation of accounting ledgers<\/b>
\n this is obligatory and must include a report that reflects any management and administration expenses charged to it.\n <\/div>\n

\n

\"Ambit\"<\/p>\n

Information statements<\/b>
\n They must present information statements to which resident entities are also subject.\n <\/div>\n

\n

\"Ambit\"<\/p>\n

\n VAT<\/b>
\n Any operations that are considered as carried out on the territory are subject to Spanish VAT. They must file the corresponding tax returns.\n <\/div>\n

\n

\"Ambit\"<\/p>\n

Financial Statements<\/b>
\n Subsidiaries must deliver the annual accounts of the foreign company to the Mercantile Registry as well as, where appropriate, the consolidated accounts that have been prepared in accordance with its legislation.\n <\/div>\n<\/p><\/div>\n

<\/div>\n
\n

CONCLUSION<\/b><\/p>\n

When establishing a company in Spain you must carefully evaluate what legal form it will take. The tax, formal, or legal liabilities and consequences of either option must always be taken into account. This analysis should be continuous, so, for example, it might be feasible to start off as a branch but once the business volume or income of the establishment increases, the company moves on to become an subsidiary.<\/span>
\n The fiscal, commercial and accounting compliance of a branch is sometimes more complex than it is for a Spanish company.<\/span>
\n At \u00c0mbit, if you are considering establishing a company in Spain, we can help you make the best decision and provide advice to ensure you comply with your business obligations.<\/span>
\n We are members of MGI Wordwide<\/strong><\/a> and are specialised in International Consulting.<\/span><\/p>\n

Whatever you need to make your international business a success<\/strong> MORE INFO<\/a><\/p>\n<\/p><\/div>\n

<\/div>\n<\/div>\n
Tags: accounting<\/a>, <\/span> Branch<\/a>, <\/span> financial statements<\/a>, <\/span> investment<\/a>, <\/span> retentions<\/a>, <\/span> subsidiary<\/a>, <\/span> taxes<\/a>, <\/span> vat<\/a>, <\/span> <\/span><\/div>","protected":false},"excerpt":{"rendered":"

What is considered a Branch in Spain? According to corporate law, a branch is a secondary establishment that has permanent representation and a certain autonomy to manage itself, through which the activities of a company are fully or partially developed (RRM Article 295). What distinguishes it from a subsidiary? The subsidiary of a foreign company […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":true,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[10,99],"tags":[326,322,329,325,327,323,324,328],"class_list":["post-3904","post","type-post","status-publish","format-standard","hentry","category-fiscal","category-internacional","tag-accounting","tag-branch","tag-financial-statements","tag-investment","tag-retentions","tag-subsidiary","tag-taxes","tag-vat"],"yoast_head":"\nOpening a Branch in Spain. - Ambit Assessor<\/title>\n<meta name=\"description\" content=\"Key features and obligations of the Branches in Spain. 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