A Spanish subsidiary is a form of company in which the capital is owned by a foreign company. Even though the capital is provided by the foreign company, the subsidiary is considered a separate legal entity, and the liability of its shareholders is limited by their contribution to the capital. Our team of consultants in company formation in Spain can offer in-depth assistance on the procedure of opening a subsidiary in a Spanish city.
| Quick Facts | |
|---|---|
| Applicable legislation (home country/foreign country) |
Spanish Company Law |
|
Best used for |
– banking, – insurance, – automotive, – IT&C, – trading |
|
Minimum share capital |
Yes |
| Time frame for the incorporation (approx.) |
Around 2 months |
| Management (local/foreign) |
Local |
| Legal representative required |
No |
| Local bank account |
Yes |
| Independence from the parent company | Yes |
| Liability of the parent company | No, the subsidiary is fully liable |
| Corporate tax rate | 25% |
| Possibility of hiring local staff | Yes |
Table of Contents
The rules for registering a Spanish subsidiary in 2025
A subsidiary established in Spain is seen legally as a local company and must follow the same rules stipulated by the Spanish Commercial Law. In order to open a subsidiary in Spain, the representatives of the parent company have to take a decision on the matter during the general meeting of the shareholders. An investor can choose to open a company in Spain by forming an SL or Sociedad Limitada. The simplified tax regime is applicable under certain conditions.
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 is legally constituted. The founders must check the subsidiary name at the Central Mercantile Register and reserve the available name, following the standard requirements imposed to other types of businesses that are registered in this country and our team of consultants in company registration in Spain can offer advice on this procedure. Below is an infographic with information about subsidiaries in Spain:
Opening a bank account for a subsidiary in Spain
A bank account must be opened and at least EUR 3,000 must be deposited by the investors if the subsidiary is registered as a limited liability company or 25% of the share capital if the business is set up in the form of a joint stock company (not below EUR 15,000). If the subsidiary will be set up as the latter mentioned business form, the share capital that has to be deposited is EUR 60,000.
What other procedures must be followed when opening a Spanish subsidiary?
During the procedure of company formation in Spain for a local subsidiary, it will also be necessary to register the entity with the Mercantile Register. In order to register with this institution, it is necessary to provide a set of documents and our team of specialists in company formation in Spain can help investors prepare the following:
- the decision to open the subsidiary, alongside the consular certificate attesting to the validity of the foreign company;
- the documents of incorporation and, in this case, due to the fact that most of the subsidiaries are set up as limited liability companies, the required documents are the articles of association and the memorandum;
- the provisional number of fiscal identification, issued by the local authorities as mentioned above;
- a copy of the receipt of the payment made at the Directorate for Tax of the Autonomous Community.
More details on the Spanish subsidiary are available in the video below:
What are the main Spanish taxes for companies in 2025?
Companies operating in Spain are liable to a set of corporate taxes, which is also applicable to a Spanish subsidiary. All Spanish companies are liable to the corporate income tax, which is imposed at the rate of 25%, as well as to the capital gains tax (applicable at the rate of 25%). Companies also have to pay the withholding tax, a tax that is imposed on dividends, royalties, and interest.
Companies are also imposed with the value-added tax (VAT), applied at the standard rate of 21%. However, depending on the services or products delivered by the company on the local market, lower VAT rates can be applied (available at rates of 0%, 4%, and 10%).
Post-registration considerations about subsidiaries in Spain
Opening a subsidiary in Spain involves other important aspects, besides incorporation with the relevant authorities. Here is what you should consider in this case:
- Operational integration refers to the management of daily operations and alignment with local market demands and business rules for subsidiaries in Spain.
- Maintaining accurate corporate records and holding annual general meetings are mandatory for subsidiaries in Spain.
- The fact that a subsidiary can carry out other activities besides those of the parent company can only be an advantage. Once the company is registered in Spain, the market potential and opportunities for growth and investment can be assessed.
Interested in a team of accountants in Spain when opening a subsidiary? You may explore the services of our local team of agents and ask for bookkeeping in Spain, payroll, audits, and many more. Feel free to contact us for company incorporation in Spain and benefit from personalized services when registering a subsidiary here.