Branch or subsidiary: which one suits you?
A branch keeps your Spanish legal personality: it creates no new company, the parent company is liable and the file is lighter. A subsidiary is an independent local company with its own capital and limited liability.
The decision is not ideological, it is numerical: where your customers are, how you want to hire, what image you need and which tax regime applies in each case.
Key points
- Branch: same legal entity, parent company liable, no minimum capital in most countries
- Subsidiary: local company, limited liability, better to grow under your own brand
- Branch: a single consolidated group picture, with separate local books
- Subsidiary: its own corporate obligations (accounts, audit where applicable)
What does Filnet prepare for the branch file?
We collect and translate the parent company documentation (deed, articles, powers, certificate of good standing), check the format the destination registry requires and draft what has to be filed.
We also prepare the application for the branch tax number, the VAT registration and, where local rules require it, the appointment of a tax representative. The client or their notary signs and files.
What the branch has to keep up with every year
The branch keeps separate local accounts and files its own taxes: corporate tax or equivalent, VAT and withholdings if there are employees. Late filing penalties land on the parent company.
At Filnet the branch accounting and tax sit in the same monthly plan as the rest of the group, with a local advisor who answers in Spanish.
When to choose a branch and when a subsidiary
A branch fits one-off operations, projects with a single legal structure or a first few months of testing a market. A subsidiary wins when there is stable local hiring, customers who want a local company, or risk you want to ring-fence.
The exit matters too: a branch is closed with fewer formalities, while a subsidiary requires dissolution, liquidation and final accounts.
