- 1Spain: An attractive country for investment
- 2Setting up a business in Spain
- 3 Tax System
- 4 Investment aid and incentives in Spain
- 5 Labor and social security regulations
- 6 Intellectual property law
- 7Legal framework and tax implications of e-commerce in Spain
- AI Annex I Company and Commercial Law
- AIIAnnex II The Spanish financial system
- AIIIAnnex IIIAccounting and audit issues
- Different ways of doing business in Spain
- Tax Identification Number (N.I.F.) and Foreigner Identity Number (N.I.E.)
- N.I.E for individuals who are to be shareholders or directors of companies resident in Spain, tax and legal representatives of a branch in Spain, permanent establishments or limited liability entrepreneurs
- N.I.F. for legal entities that are to be shareholders or directors of companies resident in Spain, or owners of branches in Spain or permanent establishments
- Provisional and definitive N.I.F. of the company resident in Spain that is to be set up
- Formation of a company
- Limited liability entrepreneur
- Opening of a branch
- Other alternatives for operating in Spain
- Forms of business cooperation
- Temporary Business Associations (UTEs)
- Economic Interest Groupings (EIGs)
- Silent participation Agreement (C.E.P.)
- Participating loans
- Joint ventures through Spanish corporations or limited liability companies
- Distribution, agency, commission agency and franchising agreements
- Other alternatives for investing in Spain
- Dispute resolution
- Appendix I - Table summarizing the tax treatment given to the various ways of investing in Spain
6Opening of a branch
6.4. Representative Offices
Apart from through a corporation or a branch, a foreign investor in Spain may operate, among other options, through a representative office.
In light of the lack of specific regulations in this respect, a definition may be found in the tax treaties signed by Spain with third countries: a representative office is understood to be a fixed place of business, established by a nonresident company, that pursues purely marketing or informational activities relating to commercial, financial and economic matters but does not conduct any actual business. They are governed by treaties signed with Spain or, where there are no treaties, by Spanish legislation and representative offices are considered permanent establishments.
This form of establishment in Spain allows investors to obtain all kinds of information on which they can base their investment decision, without having to comply with too many legal formalities. A representative office is, therefore, the ideal vehicle for conducting market research, studying the level of competition existing in the industry in which it intends to invest, compiling financial projections and profit estimates for the investment or negotiating the acquisition of companies via purchase of shares or of assets and liabilities.
Representative offices have, inter alia, the following key characteristics:
- Representative offices do not have separate legal personality from their parent.
- The nonresident company is liable for all debts assumed by the representative office.
- Representative offices cannot themselves conduct commercial transactions.
- In general, no commercial requirements need to be met for a representative office to be opened, although mainly for tax, employment and social security purposes a public deed (or document executed before a foreign notary public, duly legalized with the Hague Apostille or any other applicable form of legalization) may have to be executed, recording the opening of the representative office, the allocation of funds, the identity of the tax representative (an individual or legal entity resident in Spain) and its powers. Representative offices need not be recorded at the Commercial Registry.
- Representative offices have no formal managing bodies; the representative of each office performs the activities of the representative office by virtue of the powers granted to that representative.
As regards the main employment and tax aspects of representative offices, please see the corresponding sections in chapters 3 and 5.