Entering the Spanish Market in 2026: Subsidiary SL or Branch, and Founder Residence

A foreign company enters the Spanish market in one of two main ways: it forms a subsidiary SL or registers a branch (sucursal) with the Registro Mercantil. A subsidiary SL is a separate Spanish legal entity with capital from €1 and liability limited to its own assets. A branch is part of the foreign company: the parent answers for its obligations, and profits transferred abroad bear an extra 19% tax. Neither form gives the owner residence: Spanish status is a separate application through ENISA, self-employment, the digital nomad permit or the EU Blue Card. The golden visa was abolished on 3 April 2025.

Last verified 9 October 2026 against the consolidated BOE texts of the Capital Companies Act (LSC), the Mercantile Register Regulation (RRM), the Non-Resident Income Tax Act (TRLIRNR), Ley 14/2013, the Immigration Regulation RD 1155/2024, the Civil Code, and a Spanish consulate's page on the digital nomad visa. Our own fees and turnaround are excluded because they depend on the form and the scope.

Planning to enter Spain? INNOVA compares the forms of presence against your sales model, registers the chosen structure and reviews immigration routes for the owner and the team separately. Request a tailored proposal for Spain.

Subsidiary SL or branch: comparison

Sources: LSC art. 4, RRM arts. 295, 300, TRLIRNR arts. 19, 25.

Subsidiary SL

The most flexible form for selling to Spanish clients, hiring and tendering. A foreign company from any country may be a member; the director may be an individual or a company with no residence requirement. The company has its own NIF, keeps its own books and files with the Registro Mercantil. The foreign parent's capital contribution is reported on form D-1A within a month (Orden ECM/57/2024).

The tax result of a subsidiary SL depends on size. In 2026 a new company with a genuine business pays 15% in its first profitable period and the next one, a micro company 19% on the first €50,000 and 21% on the rest, a small company 23% (LIS art. 29, transitional provision 44). The 15% rate is unavailable when a related party transferred the business or the company belongs to a group. Formation, tax and reporting step by step: Company formation in Spain.

Branch of a foreign company

The Mercantile Register Regulation defines a branch as a secondary establishment with permanent representation and some management autonomy (RRM art. 295). The foreign company registers it with the Registro Mercantil where the branch operates, filing legalised documents on the company's existence, its articles, its directors and the decision to open the branch (RRM art. 300).

For tax, a branch is a permanent establishment and its profit is taxed at corporate tax rates (TRLIRNR art. 19.1). Profit the branch transfers abroad bears an extra 19% tax. It does not apply to companies resident in the EU, nor to residents of treaty countries where the treaty provides otherwise and there is reciprocity (art. 19.2–19.3). Whether this exemption covers a Ukrainian company under the 1985 treaty is reviewed for the specific structure before registration.

A branch suits a parent that wants unified accounts and treats Spain as an extension of an existing business. Where separate liability matters or Spanish partners are expected, a subsidiary SL is the usual choice.

Representative office

If the parent wants to start with a representative office (oficina de representación) to study the market, we review the permitted scope of its activity for the specific model before launch. For sales and hiring in Spain, the working forms are a subsidiary SL or a branch.

Residence for the founder and owner: what exists in 2026

Registering an SL or a branch grants no status. Permits under Ley 14/2013 share general requirements: lawful stay, age 18 or over, no criminal record, health insurance, sufficient means and payment of the fee (Ley 14/2013 art. 62). Family members may apply together or later.

Income figures in 2026

The 2026 minimum wage (SMI) is €1,221 a month, paid 14 times a year (RD 126/2026). For the digital nomad permit the requirement is a percentage: 200% of SMI for the applicant, plus 75% for the first family member and 25% for each additional one. The euro amount depends on how the consulate converts SMI to a monthly figure, so we confirm it against the specific consulate's requirements on the filing date.

The non-lucrative permit uses IPREM. The last value fixed by a budget law is €600 a month (Ley 31/2022, additional provision 90); at that value 400% is €2,400 a month for the applicant. We check the IPREM value with the consulate on the filing date.

A closed route: the golden visa

The golden visa was abolished on 3 April 2025. Organic Law 1/2025 removed investor residence, including the €500,000 property route, from Ley 14/2013. Applications filed before that date follow the old rules, and permits already issued run to the end of their term (Organic Law 1/2025).

Ukrainian nationals under temporary protection

• Temporary-protection TIE cards were automatically extended to 4 March 2027 (Orden INT/96/2026).
• The EU Council extended temporary protection to 4 March 2028 (Decision 2026/1912). As of 9 October 2026 Spain had not published an order extending the cards to that date.
• Since 16 April 2026 holders of temporary protection can apply from within Spain for other permits, including arraigo and every Ley 14/2013 permit: entrepreneur, digital nomad, Blue Card (Immigration Regulation, additional provision 19, as amended by RD 316/2026).

We make no promise that temporary-protection years count towards the 5 years for long-term residence: we found no express rule as of the check date. The plan is built so that the move to a main permit does not depend on that question.

The owner's taxes after relocation

A person becomes Spanish tax resident after more than 183 days in Spain in a calendar year or when the centre of their business or economic interests is in Spain (LIRPF art. 9). People moving on art. 93 grounds (an employment contract, including remote work on a digital nomad visa, appointment as a director, an entrepreneurial activity with an ENISA report) can elect the special regime: 24% on employment and business income up to €600,000 and 47% above, for the year of arrival and the next 5 years, provided they were not Spanish resident in the previous 5 years (LIRPF art. 93). The general approach to the owner's residence is in the guide on tax residency.

Choosing the form: practical questions

1. Who will sell to Spanish clients and hire staff? Active business in Spain needs a subsidiary SL or a branch.
2. Where is the parent resident? For an EU parent the branch profits tax does not apply; for a Ukrainian parent the question is checked under the 1985 treaty.
3. Is separate liability needed? A subsidiary SL ring-fences the Spanish business from the parent.
4. What turnover is expected? It sets the 2026 corporate tax rate: 19/21% for micro, 23% for small, 25% general.
5. Will the owner relocate? Then the structure and the business plan should be prepared with ENISA or self-employment requirements in mind.
6. How will money come out? Dividends from a subsidiary SL to an owner in Ukraine bear at most 18% under the 1985 treaty; the owner's tax residency decides the rest. For a multi-tier structure see the international holding guide.

What INNOVA organises

• A comparison of a subsidiary SL and a branch against your sales model and tax burden;
• SL formation or branch registration with the Registro Mercantil, form D-1A, beneficial-owner data;
• a tax model for the company and the owner, coordination of bookkeeping and reporting;
• a separate review of immigration routes for the owner, family and staff.

Fees and the work plan are set out in a written proposal. Describe your Spain case.

Frequently asked questions

Official sources

• Mercantile Register Regulation (RD 1784/1996)
• Non-Resident Income Tax Act (RDL 5/2004)
• Ley 14/2013 on entrepreneurs
• Immigration Regulation (RD 1155/2024)
• Organic Law 1/2025, end of investor residence
• RD 126/2026, SMI 2026
• Orden INT/96/2026, TIE extension
• Organic Law 4/2000 on foreigners
• Civil Code
• Personal Income Tax Act (Ley 35/2006)