Subsidiary, branch or permanent establishment in Spain
Business and Corporate Law in Spain
A foreign company carrying on substantial business in Spain must consider whether to establish a Spanish subsidiary, register a branch or operate without a separate Spanish legal entity. These alternatives have different legal, tax and organisational consequences.
Subsidiary
A subsidiary is a separate Spanish company. An S.L. is a common structure. It has its own legal personality, corporate bodies and Spanish tax obligations.
Branch
A branch forms part of the foreign company and does not have separate legal personality in the same way as a subsidiary. It is registered in Spain, but legal responsibility remains more closely connected to the foreign company.
Permanent establishment
A permanent establishment is primarily a tax concept. Under the Germany–Spain tax treaty, a fixed place of business through which an enterprise carries on all or part of its business can constitute a permanent establishment.
Its existence depends on the actual activity rather than solely on a formal registration.
Choosing the structure
The decision should take into account the duration and scale of the activity, liability, personnel, management, contractual relationships, taxation and administrative burden.
How we can help
We advise international companies on structuring their activities in Spain and coordinate corporate, tax and registration matters.