Info to Set up a Branch in Spain:
- Does not have its own legal personality (it is the same legal entity as its foreign parent company). Permanent establishments do not have a legal personality independent from the parent company, meaning that the liabilities the branch enters are obligatorily assumed by the foreign parent company with the legal limits set under their respective national law.
- Does not require a minimum share capital or economic allocation at the time of its establishment. Nonetheless, this does not prevent the parent Company from deciding on the attribution of the capital it considers appropriate for its branch.
- The representative of a branch acts as an agent within the limit of the powers granted to him by the parent company. Legal representative is jointly and severally liable in any case of tax debts of the branch, without having to attend the negligence or culpability in its management and without the declaration of the failure of the branch as necessary.
- ACCOUNTS: The foreign company (parent) must deposit in the commercial register of the branch, the annual accounts or, where applicable, the consolidated accounts which have been prepared in accordance with foreign law.
- DEDUCTIONS: As a distinctive feature, a branch may fiscally deduct the corresponding general administration and management expenses.
- TAX RATE: First, the rules of the corresponding Double-Taxation Agreement apply. In its absence, if your want to set up a branch in Spain, it is subject to the Income of Non-Residents for all the income obtained in Spain. The applicable general tax rate being 19 % for residents of other EU countries and 24 % for non-EU residents. No deductible payments made to the central branch in fees, royalties, property rights, interest, commissions, paid in consideration for technical assistance or use of property or rights.
- LAW: Applicable norm is the Mother Company’s country of origin accounting.