A Spanish subsidiary is a form of company where the capital is owned by a foreign company. Even though the capital is provided by the foreign company, the subsidiary is considered a separated legal entity and the liability of its shareholders is limited by the contribution to the capital
The taxation of a subsidiary may differ, depending on the existence of various international treaties. For example, no withholding tax on dividends paid to a foreign company from an EU country is raised.
Also many double tax treaties signed by Spain stipulates that the profits are taxed only in the country of origin of the foreign companies.
A subsidiary established in Spain is looked as a local company and it must follow the same rules stipulated by the Spanish Commercial Law.
The decision of opening a subsidiary must be taken by the foreign company’s general meeting. The resolution must be legally translated into Spanish and must be accompanied by the certification from the specific Spanish consulate that the foreign company really exists and it’s legally constituted.
The founders must check the name at the Central Mercantile Register and reserve the available name.
More details on the Spanish subsidiary are available in the video below:
A bank account must be opened and at least 3,000 EUR must be deposited, if the subsidiary is a limited liability company, or 25% from the share capital of a joint stock company (not bellow 15,000 EUR).
The subsidiary’s founders must also draft the articles of association and notarize it along the other deeds (the decision of opening the subsidiary, the certificate of deposit).
The next step in the process of registration of a subsidiary in Spain is receiving a provisional number of fiscal identification, received after submitting the specific documentation at the National Tax Authority Delegation.
A tax of 1% from the company’s capital, called transfer tax on stamp duty, must be paid at the general Directorate for Tax of the Autonomous Community. Along with the tax, the subsidiary opened in Spain must also deposit the foundation documents and a photocopy of the provisional number of fiscal identification.
Registration in the Mercantile Register is mandatory for a subsidiary formed in Spain as it is for any local company. It is based on the registration of the following documents:
- the decision of opening the subsidiary,
- the consular certificate of existence of the foreign company,
- the documents of incorporation,
- the provisional number of fiscal identification,
- a copy of the receipt of the payment made at the Directorate for Tax of the Autonomous Community.
After registering in the Mercantile Register, the company opened in Spain must apply for the definitive number of financial identification at the Tax Administration and the registration in the Foreign Investments Register.