Setting up your Chinese company in Spain

China and Spain in figures

What Spain requires of a Chinese company

Of the obligations set out on our general page, these are the ones that apply to you:

What changes when you come from China

• ·2018 double taxation treaty, in force since 2 May 2021: it limits withholding tax on payments from the subsidiary to the parent company.
• ·Posted technical staff: if your personnel provide services in Spain for more than 183 days in any twelve-month period, on one project or on connected projects, your company has a permanent establishment taxable in Spain; a building site or an assembly project does so if it lasts more than twelve months.
• ·State-owned enterprises: prior authorisation in any sector extends to a group controlled by the Chinese Government or its public bodies, and such control may also be inferred from significant public funding the group receives, subsidies included.
• ·Investment protection: the bilateral agreement, in force since 1 July 2008, guarantees fair and equitable treatment, compensation at market value in the event of expropriation, free transfer of returns and international arbitration if a dispute with the State is not settled within six months.
• ·Parent company documents: business licence (营业执照), which shows its legal representative (法定代表人); resolution of its governing body approving the investment; power of attorney and, for a branch, articles of association (章程). They go before a Chinese notary and bear the apostille of the Ministry of Foreign Affairs or of the authorised provincial office, with no consular legalisation required since 7 November 2023.
• ·Visa: Chinese nationals need one even for a short business trip (except holders of a Hong Kong or Macao passport). Since 15 September 2026, China has prohibited foreign companies from providing entry and exit intermediation services there: we work for your company in Spain and, with Chinese outbound agencies, only with registered ones.
• ·Personal data: as there is no EU adequacy decision for China, sending customer or employee data to the parent company requires safeguards such as the European Commission's standard contractual clauses.
• ·Outflow of capital: before investing, your parent company needs in China, among other formalities, a filing (备案) with the National Development and Reform Commission or its provincial department or, if the investment is sensitive, the approval (核准) of the National Commission; without them, banks will not process the payments.

From China to an operating subsidiary, step by step

1. 1

   Review and quote

   Subsidiary or branch, whether prior authorisation is needed and the timetable, allowing for the filing in China; a fixed-fee quote in writing.

2. 2

   Documents in China

   Business licence, resolution approving the investment and power of attorney, before a Chinese notary and apostilled; then a sworn translation, which we coordinate.

3. 3

   NIF and NIE

   The parent company's NIF and the NIE or NIF of whoever signs or acts as director.

4. 4

   Incorporation or branch

   Company name, deed before a Spanish notary and registration: incorporation of the SL or of the branch. With a Spanish partner, a shareholders' agreement; if you are buying a company, a share purchase.

5. 5

   Investment Register

   Form D-1A within the following month.

6. 6

   Tax registration and notifications

   Form 036, beneficial owner and an authorisation to receive notifications from the Spanish Tax Agency (Agencia Tributaria): any notification that nobody opens within ten days is deemed rejected.

7. 7

   Bank account

   The bank opens it subject to its own requirements; it may require the signatory to appear in person.

8. 8

   Team

   Registration with the Social Security system, employee registrations and permits.

9. 9

   Ongoing compliance

   VAT, Corporate Income Tax, withholdings, annual accounts and corporate books.

Your team in Spain

Each Chinese national who is to work at the subsidiary needs a residence and work authorisation, which the company applies for: we file it on your behalf with the Large Companies Unit (Unidad de Grandes Empresas), which processes it; a decision is issued within 20 days (if there is none, the application is deemed granted), and the company remains registered for three years. Each person then applies for the visa at the consulate.

• ·Intra-corporate transfer: managers, specialists and trainees of the group, with a higher education degree or three years' experience and three months' prior service in the group; for up to three years (one, for trainees).
• ·Highly qualified professional or EU Blue Card: a highly qualified post at the subsidiary.
• ·Family: spouse or partner, minor or dependent children and dependent relatives in the ascending line, in the same application or later (family reunification).

Social Security: under the agreement with China, in force since 20 March 2018, an employee posted by your company continues to contribute in China for pension and unemployment for 72 months, which may be extended, with a certificate from the Chinese Social Insurance Administration; all other contributions are paid in Spain.

Chinese residents in Spain who hold another authorisation, such as a study permit, can often have it changed without leaving Spain; we also prepare their renewals. EU citizens do not need an authorisation.

Taxes: the treaty with China and what is paid in Spain

The reduced rate is applied at the time of payment, against the parent company's tax residence certificate (中国税收居民身份证明), valid for one year; the withholdings are paid in with Form 216. The treaty denies these benefits if obtaining them was one of the principal purposes of the transaction.

The subsidiary pays Corporate Income Tax at 25%; as part of a group, it cannot apply the rate for newly created companies, and the small company rate depends on the group's turnover. Transactions with the parent company must be at market value and, above certain amounts, are reported on Form 232.

A branch is taxed at the same rate, without the 19% supplementary tax on what it remits to the parent company if there is reciprocal treatment. Selling the subsidiary may be taxed in Spain if the parent company held 25% at any time in the preceding 365 days.

What we do for your Chinese company

We are a law firm and gestoría: we file and sign on your behalf before the Tax Agency, the Social Security system, the immigration authorities (Large Companies Unit, MERCURIO platform) and the Registries, with a fixed-fee quote in writing before we start. Notary, official fees, apostille and sworn translation are separate and payable by you.

• ·The set-up, with the powers of attorney and the general manager's contract.
• ·Tax representation, where the case allows it: if the law were to make us liable for your debt, we tell you beforehand and agree the guarantees.
• ·If the subsidiary imports: an import review, an EORI number and binding tariff information, with partners who have an office in China and expert engineers in Spain and in China who inspect the goods and their specifications.
• ·The European Union trade mark.

By law, we identify the beneficial owner of each client before we start work. We do not provide a registered office or an address for notifications, nor do we act as directors, company secretaries or shareholders of your company (nominee or otherwise), customs representative, IOSS intermediary or the person responsible for your products in the EU; we do not apostille documents or sign sworn translations (we coordinate them), nor do we file the Spanish trade mark in the parent company's name. We work in Spanish and English, remotely, and reply to you in writing at any time of day, including during Chinese business hours.