Establishing a presence in a foreign country first requires a strategic decision: subsidiary or branch? The choice shapes taxation, legal liability, commercial image and operational complexity throughout the entire lifecycle of the operation.
Subsidiary vs Branch: key differences
Independent legal entity
A company with its own legal personality in the destination country. Liability limited to the share capital. Taxed as a local entity. Higher incorporation and maintenance costs but complete asset protection.
Extension of the parent
Without its own legal personality. The parent is liable with all of its assets. Taxed as a permanent establishment. Quicker and cheaper to set up, but total exposure of the parent's assets.
What we do in a setup
- Preliminary feasibility study: optimal jurisdiction, legal form, shareholder structure, expected taxation in the short and medium term.
- Incorporation: drafting of bylaws, notarial appearance, registration with the relevant commercial registry, obtaining a tax number.
- Corporate structure: appointment of management bodies, drafting of shareholder agreements where applicable, shareholder registry.
- Tax registration: census of taxpayers, VAT registration, withholding agent registration.
- Employer registration: where applicable, registration as a contributing employer with the local social security system.
- Opening of bank account: management and support with local financial institutions.
- Initial compliance: accounting, official books, first tax year.
Most common corporate forms
Sociedad Limitada (SL)
Minimum capital 3,000€. The most widely used form in Spain for SMEs and subsidiaries. Liability limited to capital.
Sociedad Anónima (SA)
Minimum capital 60,000€. For larger operations, market listings or complex capital structures.
Società a Responsabilità Limitata (SRL)
Italian equivalent of the SL. Minimum capital 10,000€ (1€ in the "semplificata" variant). The most common form in Italy.
Società per Azioni (SpA)
Italian equivalent of the SA. Minimum capital 50,000€.
S.A. de C.V.
Sociedad Anónima de Capital Variable. The most widespread corporate form in Mexico for foreign subsidiaries.
S. de R.L. de C.V.
Sociedad de Responsabilidad Limitada de Capital Variable. Alternative when you want to limit the number of shareholders.
Subsidiary in Spain: 3-6 weeks from the signing of the mandate. In Italy: 4-8 weeks. In Mexico: 6-10 weeks (SAT timelines are more unpredictable). These timeframes assume complete client documentation from the outset.