Open Company Branch or Subsidiary in Spain

Even though many foreign entrepreneurs choose to set up limited liability or joint stock companies, this is not always the case. Some foreign investors, who wish to expand their business in other countries, choose to incorporate a branch. The state of Spain encourages foreign investment, guaranteeing non-discriminatory treatment to foreign companies incorporating branches on the state's territory. A branch in Spain is not considered a separate legal entity from the parent company. However this doesn't mean the branch isn't capable of developing business on its own. Many branches have autonomy and the parent company is fully liable to its debts.

Preliminary activities prior to registering a company branch in Spain
It is mandatory that a branch in Spain have the same name as the parent company, adding the words 'Branch in Spain'. Separate accounts must be held, and before registration the company has to register its name and open a bank account. Also the documentation which will be presented for registration has to be notarized. The branch of a foreign company has to be established in front of a notary public. After notarizing all documents, the branch of a foreign company is ready to file for registration.

Registering a company branch with the Companies Registry of Spain
In order to engage in commercial activities, a Spanish branch of a foreign company must apply for registration with the Companies Registry of Spain. The application for registration must contain a certificate that proves the existence of the parent company, issued by the institution in charge with company registration of the respective country, a copy of the Memorandum of Association of the foreign company with a sworn translation into Spanish, certified minutes of the meeting of the general shareholders detailing allocated capital to the Spanish branch, objectives and purpose etc. and bank certificate. Simultaneously with this procedure an application is filed at the General Directorate of Commerce and Investments of Spain to register the branch for statistical purposes.

After registration the Spanish branch comes to existence, having only a few steps to take care off for the process to be complete. It is important that the branch is registered for VAT by the authorized representative. This is done through an application containing relevant information of the branch. Also if the company has employees they must be registered for Social Security submitting their information to the institution.

How long does it take to establish a Spanish branch?
 Even though the process is straightforward there are some hurdles in the process of incorporation a Spanish branch of a foreign company. Even though most of the procedures are completed in one day, the time period might vary depending on the notary's schedule, and other delays that might occur. Registering with the Companies Registry of Spain might take up to two weeks to be completed, but if the judges require additional information the process might take longer. A Spanish branch of a foreign company is completed in maximum one month.