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FORMING A BRANCH IN SPAIN
In this case, the foreign parent company is expanding its business into Spain through a new establishment that is not a separate and independent entity.
The main difference with the representative office is that the branch carries out business transactions in Spain.
The most common reason for establishing in Spain through a branch office instead of through a limited liability company is because the business in Spain is going to be primarily cash-consuming and will require recurring transfers of cash from the head office for a number of years.
Tax and corporate filing requirements and obligations are very similar to a limited liability corporation.
Legally speaking, a branch is fully dependent of the foreign head office (the same as the Rep Office) e.g. in terms of responsibility, the foreign head office may be fully responsible for all liabilities incurred by the Spanish branch.
For tax purposes, a Spanish branch office of a foreign company is considered a permanent establishment in Spain. Therefore, the branch office will be subject to the same rules that apply to Spanish resident companies, and it must pay Spanish corporate income tax on its net income.
International tax treaties signed by Spain to provide relief from double taxation should be taken into consideration.
The branch office will pay VAT tax on the purchase of any goods or services in Spain. In some cases, this VAT may be refunded.
The branch must also pay Spanish Social Security and withholding tax on behalf of its employees.
STEPS FOR ESTABLISHING A BRANCH IN SPAIN
* In order to open a representative office, a formal resolution of the foreign head office governing body (e.g. board of directors) authorizing the establishment of a branch in Spain and appointing a representative.
* The resolution must be duly legalized to be valid in Spain, i.e. approved by the board in accordance with the company's bylaws, duly notarized and stamped with the Apostil of the Hague and sworn translation into Spanish.
* Registration of the above resolution with the Mercantile Registry in Spain, including a copy of the head office corporate bylaws duly stamped also with the Apostil of the Hague and sworn translation into Spanish.
INCORPORATION AND SERVICE FEES
Incorporation Fees – Euros 2,275.00
Annual maintenance fees – 1,050.00 (*)
Application for a Spanish VAT Registration Number – Euros 285.00
Hand Plier Company Seal – Euros 75.00
Provision of an Local Corporate Bank Account – General Disbursements - Euros 150.00
2nd set of certified documents for bank account opening purposes – Euros 275.00
Certified Minutes deciding the opening of a Bank account and appointing the Account Signatory - Euros 175.00
Translation of all statutory documents of the mother company into the Spanish language – Euros 950.00
Certification of translations by local Public Notary – Euros 375.00
Registration with “Registro Mercantil” – Euros 420.00
Publications with Official Gazette – Euros 270.00
DHL delivery of documents – Euros 70.00
(*) 1st year fees will be payable together with incorporation fees.
ANNUAL FEES
The Annual Fees are concerned with the following services:
Annual Statutory Fee, which includes:
- The provision of a registered office (*) in the jurisdiction of incorporation, as required; the registered office is not considered as a trading address.
- Local incorporation agent – our solicitor we use to provide us all services relating company matters (registered agent facilities);
- Filing statutory returns with official departments, required, to be the company active and alive;
- Liaison with the registered office and the registered agent in the jurisdiction of incorporation, attending to the payment of the Annual Government License Fees and other government fees;
Annual Compliance Fee, which includes:
- Attending to routine compliance matters (inclusive of periodic file reviews), reviewing official correspondence received and other routine matters incidental to good corporate governance;
- Processing and Return Filing with Internal revenue, Registrar of Companies, and other official departments
FULL SERVICED VIRTUAL OFFICES IN MADRID
Full serviced Virtual Office in Madrid - Spain – a service provided for those who incorporate offshore but simultaneously wish to offer the company a high degree of credibility internationally, and grant that all mail, phone calls and faxes addressed to your company by any entity, client, provider, … will be always received by you. In your specific case, this Virtual Office is highly recommended:
Mailing address with mail re-forwarding services – Euros 680.00/annual
Telephone Number in Madrid – Euros 550.00/annual
Fax Number in Madrid – Euros 550.00/annual
OPTIONAL MARKETING SERVICES
At your option, we can also be in charge to register your own web domain for this Spanish company, build and host the web site at an offshore server.
Web Domain – Euros 40.00 first year
Design and Construction of the web site – from Euros 300.00
Ongoing Maintenance Contract to your Web Site, for any change or up date whenever required – from Euros 30.00/month – One year contract
Hosting the web site – Euros 85.00 per year including 15 personalized web mail addresses type < abc@yourdomain.com >.
Please request us full information file.
OPENING OF CORPORATE BANK ACCOUNTS
Recommended banks:
Banco Santander Central Hispano, Madrid
TIME TO INCORPORATE A BRANCH
The incorporation of a Branch will take approximately 2 to 3 weeks time, including the application for the VAT registration number
HOW TO START INCORPORATION PROCESS
We only need an email from you, with your order, confirming the required optional services, if any. A Proforma invoice will then be delivered to you with our banking coordinates so that you may settle the payment, so that we may start incorporation.
DOCUMENTS REQUIRED
(1) We shall need certified copies of all statutory documents, namely:
(a) Certificate of Incorporation of mother company
(b) Memorandum & Articles of Association
(c) Board Resolution deciding the opening of the branch (we shall provide you required draft)
(d) Certified copy of Passport of the Director to be appointed for the Spanish Branch (Legal Representative)
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