Can a Delaware C-corp own a Spanish subsidiary?

Yes. A US parent can hold 100% of a Spanish sociedad limitada, and this is the standard structure. Your directors will need Spanish tax identification numbers, which are obtained from the US through power of attorney — nobody has to fly over.

Do we need an entity, or can we keep using an EOR?

It depends on four things: whether you need to invoice Spanish customers, how many people you employ here, whether anyone has raised permanent establishment, and whether the team has become permanent. Below three or four people with no Spanish sales, an EOR is often still the right answer and we’ll tell you so.

How does this affect our US taxes?

Your Spanish subsidiary will be a controlled foreign corporation and your intercompany arrangements will matter on both sides. That’s your CPA’s territory and we work alongside them — we handle Spain and give them what they need in the form they need it.

Is there a state-level equivalent we should worry about?

Spain has seventeen autonomous communities, and some taxes genuinely vary between them — closer to the US state model than most Europeans will admit. Corporate income tax is national, so the variation affects individuals more than companies, but where you locate people can matter.

How fast can we be operational?

Six to twelve weeks to be fully operational for a standard subsidiary, and able to invoice from around week six or seven. The deed itself is quick; the tax IDs for your US directors and parent company, and the bank account, decide the rest, which is why we start all of them on day one.

Country desk · United States

Everything you know about employment stops working at the Spanish border.

Tax, payroll and employment in Spain for US companies — run by a Spanish firm that works in English and knows what your CPA and your controller need back.

Spain is one of the best places an American company can put a team right now: senior engineers at a fraction of US cost, a public health care system you don’t pay for, and an EU entity that keeps you selling into Europe. None of that is the hard part. The hard part is that your instincts about employing people will be wrong here, and they’ll be wrong in ways that only show up later.

Talk to us How we price

United States Spain

Employer payroll burden, on top of gross

7.65%

≈ 31%

Ending employment

At-will, almost any reason

A legally recognized reason, or the cost roughly doubles

Separation pay

None by default; severance is a courtesy

Up to 33 days’ salary per year of service, capped at 24 months

Paid time off

A policy choice

30 calendar days by law, plus public holidays — a floor, not a ceiling

Indicative. Your agreement may set more; it cannot set less.

Spain doesn’t have a single body like a state CPA board. Authority is split: the Tax Agency licenses who may file, the Social Security Treasury licenses who may run payroll, and the bar admits who may practice law. We hold all three. The registration numbers are on our credentials page and each one can be verified against a public register.

The one thing to unlearn

There is no at-will employment in Spain.

In the United States, the default is that either side can end the relationship at any time, for almost any reason, with no compensation owed. Nearly everything in an American company’s employment playbook is built on top of that — performance management, the two-week notice, the severance offered as a courtesy rather than an obligation, the idea that a bad hire is a problem you can simply undo.

In Spain, ending employment requires a legally recognized reason and it carries compensation set by formula. If the reason doesn’t hold up, the cost roughly doubles. In a narrow set of cases the outcome isn’t money at all — it’s the employee reinstated.

This does not make Spain a bad place to build a team. It makes it a place where hiring decisions carry more weight and separation decisions have to be planned rather than executed. The companies that find Spain difficult are almost always the ones that learned this after their first termination instead of before their first offer.

What a Spanish employee actually costs an American company.

Employer payroll burden

≈ 31% in Spain · 7.65% in the US

Spanish employer social security against US FICA. Four times the rate, and it’s the line most often missing from a first model.

Separation

Up to 33 days’ salary per year of service, capped at 24 months

Where a dismissal is found unfair. Where it holds up as objective, 20 days per year, capped at 12 months. There is no US equivalent, and it is not negotiable downward in the contract.

Paid time off

30 calendar days of vacation, by law, plus public holidays

A statutory floor rather than a policy choice. Your agreement may set more; it cannot set less.

Indicative figures for comparison. We calculate yours precisely, under the collective agreement that actually applies to you, before you make an offer.

How employment works here →

Five things American companies tell us they didn’t see coming.

A collective agreement sets your terms, and it isn’t a union deal. Around 92% of Spanish workers are covered by a sectoral agreement, set by activity and province, that fixes minimum pay, hours, extra payments and more. American employers hear “collective agreement” and think unionization. It isn’t. It applies from your first employee whether or not anyone is a union member.
Pay is delivered in fourteen installments. Twelve monthly payments plus two extra ones, usually summer and December. Same annual total, different cash flow, and a different number to quote a candidate.
Your employees may elect representatives. Employee representation thresholds arrive with headcount, not with any dispute.
Employee data is governed by GDPR. How you monitor, store and transfer employee information is not a policy decision here.
Performance is not, by itself, a reason. Ending employment for underperformance is possible, and it is a process with evidence requirements rather than a conversation.

The tax your finance team has no equivalent for.

Almost every US company we work with starts out treating Spanish VAT as sales tax with a different name. They are different in ways that matter operationally.

VAT applies to business-to-business sales, not just to end consumers. You charge it, you also pay it on what you buy, and you reclaim the difference — so it flows through your business continuously rather than being collected at the point of retail. It is filed every quarter or every month depending on your size, and the invoice itself is the compliance artifact: what it must contain, how it’s numbered and how it’s issued are all regulated.

That last point is becoming more important. Spain is moving to certified invoicing software, with the requirement reaching corporate income tax payers on January 1, 2027 and everyone else on July 1, 2027. For a US group the practical question is whether the system your parent invoices from can produce compliant Spanish records. Sometimes it can’t, and that is a decision to make early rather than in the final quarter.

What VeriFactu means for a US parent →

International reporting · foreign GAAP

Your parent’s numbers, in your parent’s language.

Spanish statutory accounts follow the Plan General Contable, which is not US GAAP and not UK GAAP, and the differences surface exactly where they hurt — at consolidation, in front of your auditor.

We keep the statutory books correctly here and hand your parent figures it can actually use: converted to your group’s basis, in your format, on your close calendar, in English. Where your group runs SAP, Dynamics 365 or Sage X3, we work inside it rather than emailing spreadsheets for someone to rekey.

It’s the reason some of our clients chose us, and it is the part of this job most Spanish firms do worst.

We work with your US advisors, not around them.

Your Spanish subsidiary is a controlled foreign corporation for US purposes, your intercompany arrangements have to be defensible on both sides of the Atlantic, and your US GAAP reporting needs Spanish statutory figures converted rather than approximated.

What that means in practice: statutory books kept correctly in Spain, a reporting package in your group’s format and on your close calendar, intercompany documentation and Modelo 232 prepared so it holds up in both jurisdictions, and a direct line between us and your CPA so you’re not sitting in the middle translating between two sets of rules.

Most companies come to Spain in stages. Some start with a first hire through an employer of record, some set up a Spanish company from day one, and some arrive with a subsidiary already running and an advisor they’ve outgrown. Each route has its own costs, and its own moment to move on to the next. We work with companies at every stage, and we’ll tell you honestly which one fits where you are now.

Five ways into Spain, and which one suits you →

The United States is the largest real investor in Spain’s productive economy, and the shape of it has changed: engineering hubs, product teams and commercial subsidiaries of ten to fifty people rather than plants and acquisitions.

How we work.

Someone who tells you before, not after.

Before you hire, before you restructure, before you let someone go — you see the number and the consequence while the decision is still yours to make. Most of what this firm does happens ahead of the thing, not in response to it.
Nothing filed from memory.

Every obligation your company owes is held by our own system, with the dates attached, checked daily. Deadlines here run whether or not anyone has opened the letter, so the letter gets opened.
One person, who knows your business better every year.

The same advisor, not a rotating cast. They learn how your group works, what your parent asks for, which decisions you take quickly and which you don’t. That relationship is the thing that compounds — a firm that has run your Spanish company for four years is worth considerably more to you than one that has run it for four months.
A second person who knows it too.

So vacations, sick days and busy weeks are our problem rather than yours.
Answers in English, filings in Spanish.

Your advisor works in your language. Your inspectors, your collective agreement and your Registry are dealt with in ours, by people who do it every day.

How we price →

What American companies ask first.

Can a Delaware C-corp own a Spanish subsidiary?: Yes. A US parent can hold 100% of a Spanish sociedad limitada, and this is the standard structure. Your directors will need Spanish tax identification numbers, which are obtained from the US through power of attorney — nobody has to fly over.
Do we need an entity, or can we keep using an EOR?: It depends on four things: whether you need to invoice Spanish customers, how many people you employ here, whether anyone has raised permanent establishment, and whether the team has become permanent. Below three or four people with no Spanish sales, an EOR is often still the right answer and we’ll tell you so.
How does this affect our US taxes?: Your Spanish subsidiary will be a controlled foreign corporation and your intercompany arrangements will matter on both sides. That’s your CPA’s territory and we work alongside them — we handle Spain and give them what they need in the form they need it.
Is there a state-level equivalent we should worry about?: Spain has seventeen autonomous communities, and some taxes genuinely vary between them — closer to the US state model than most Europeans will admit. Corporate income tax is national, so the variation affects individuals more than companies, but where you locate people can matter.
How fast can we be operational?: Six to twelve weeks to be fully operational for a standard subsidiary, and able to invoice from around week six or seven. The deed itself is quick; the tax IDs for your US directors and parent company, and the bank account, decide the rest, which is why we start all of them on day one.

Before the first offer, not after the first termination.

Tell us what you’re planning in Spain, how many people, and when. You’ll get an honest answer about what it costs, what your instincts will get wrong, and what your CPA will need from us.

Talk to us

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