The creation of a Subsidiary Company by a foreign Company in Spain implies the creation of a completely new Company, with its own legal personality and independent on the Parent Company. Even though the companies are created with foreign capital, they are considered, in every way, as residents. This is a key factor and makes a big difference with regard to the Branch Offices, which are taxpayers of the Spanish Tax on Non-Residents.
Bearing this in mind, the procedures for creating a Subsidiary Company are very similar to the procedures needed in order to create a new Company. Nevertheless, there are some distinctions, as it is explained below:
- The Parent Company shall carry out an agreement by means of which the creation of a Spanish Subsidiary Company, governed by Spanish rules is approved. This agreement and the Company’s bylaws shall be translated by a sworn translator and then presented to the Spanish Commercial Register.
- The Spanish Consulate in the country of residence of the Parent Company shall certify that the Company is created in accordance to that country’s Laws.
- A negative clearance of corporate name shall be requested to the Central Commercial Register (RMC) in order to give the Subsidiary Company a name that is not in use by other registered Companies.
- The Company capital agreed by the Parent Company shall be paid in any bank. If the Subsidiary Company is a Private Limited Company there is a minimum capital.
- The bylaws of the new Subsidiary Company shall be drafted and the public deed of constitution shall be signed before the Notary Public.
- A provisional Tax ID Number (CIF) shall be requested in the Trasury Department of the address provided by the bylaws, also attaching the public deed of constitution and the ID of the Company’s representative.
- The Spanish tax on Property Transfer and on document duties and registration fees shall be settled (1% of the company capital).
- The Subsidiary Company shall be registered in the Commercial Register of the address provided by the bylaws within two months from the date of the public deed of constitution.
- Once it is created, also a registration in the Foreign Investments Register shall be made.
- Then the final Tax ID Number shall be requested.
11. Once the Subsidiary Company is created it can start operating and it is bound to deposit the annual accounts.
12. The taxation regime of the Subsidiary Company depends on what it is provided be Double taxation Agreements applicable to each case and, where there is none, the Spanish tax on Societies shall be settled.
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