Establishing a Subsidiary in Spain
Flexible and efficient legal support for creating your new company
What is a subsidiary company?
A subsidiary is a new company incorporated in Spain that is distinct from the foreign entity and has its own independent legal identity. However, it’s controlled by another entity that owns the majority of the shares in the subsidiary. The subsidiary can be incorporated under any legal form permitted by the Spanish legislation.
What documents do I need?How to obtain the Good Standing Certificate and Company’s Bylaws?
Spanish law requires these two documents to create a subsidiary: A Certificate of Good Standing and Company Bylaws. Certificate of Good Standing can be acquired at any commercial registry where the company is originally incorporated. The company bylaws are simply a copy of the existing bylaws.
How can a lawyer help me?
Our corporate lawyers at Lexidy are experts in the processes of creating a Spanish subsidiary. Through Power of Attorney, we will handle all the formal steps in gathering information for submitting documentation on your behalf. When necessary, we will walk you step-by-step through the actions to make the process as easy, simple and understandable as possible.
¨We will be with you each step of your journey.¨
– Immigration Team
What are the requirements?
From the Parent Company:
- Obtain the Parent Company’s Tax ID Number and Digital Certificate.
- Sign of the Establishment Deed at the Notary Office.
- Register the Incorporation Deed with the Company’s Office.
- Pay any of Notary and Commercial Registry fees.
Process of getting established
Establishing a Subsidiary in Spain
- File a “no-coincidence” certificate by requesting the Company’s name with the Central Commercial Registry.
- Draft the Articles of Association, or corporate bylaws in accordance with Spanish legislation.
- Draft of the Establishment of LLC Deed in accordance with to Spanish legislation.
- Open a Company Bank account and obtain a deposit certificate with the initial founding capital (Minimum of €3.000).*Spanish banks require the administrator to be personally present in Spanish territory to activate the bank account for security reasons.*
- Present documentation to a Spanish Public Notary to allow for the Establishment of LLC Deed.
- Obtain a provisional and definitive Número de Identificación Fiscal, or N.I.F.
- Incorporate and register the NEWCO with the Commercial Registry Office by presenting the Deed and related documentation.
- Draft and present the MODEL D-1A – “Declaration of foreign investment in unlisted companies, branches and other forms of investment”. This is compulsory in cases of foreign investment, for example when a foreigner is a shareholder in the Spanish subsidiary.
Parent Company Responsibilities
- Responsible for drafting the Certificate, with the agreement of the Shareholders, to establish a Company in Spain.
- Acquire a Good Standing document from the Commercial Registry of the Parent Company’s place of origin.
- Coordinating of the legalization and translation of the Good Standing and the Certificate agreement, along with the Articles of Association.
- Present the standard foreign Company’s registration form with Spain’s tax authorities to obtain the tax identification number, or NIF, by completing the MODEL 036 form. This requires a Good Standing or similar document from the Companies Registry from the country of origin.
- Register the foreign Company’s Administrator’s NIF by filing a MODEL 030 form with the Spanish authorities.
Foreigners ID Number
- Apply for foreigner ID number, or NIE, by submitting a MODEL EX-14 form with Spanish government authorities.
Draft of the following documentation:
- Letter of Motive.
- Certification of passport.
- Submit a FORM EX-15 with the Spanish government authorities.
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Frequently Asked Questions
The activities that the subsidiary may carry out are not limited to those of the foreign entity.
A power of attorney is a legal document that is used in many European countries by persons who are not able to attend certain events or places but want to be represented by someone to act on their behalf. This can be for signing contracts, making decisions, submitting documents and more.
For forming a company in Spain, Power of Attorney is not essential. However, its speeds up and simplifies the process if the company’s shareholders are not in Spain.
Spain is a decentralised unitary state formed by 17 autonomous communities, and two autonomous cities. Basic commercial law, like company formation, is enacted by Spain’s central government, which has exclusive competence to legislate on these matters.
The process usually takes 4-6 weeks once the shareholders have a NIE. The process may vary depending on the type of formation, whether it’s a new company or setting up a branch, and on the Autonomous Community where the company will be registered. Some regional registries can take longer than others.