In addition to the forms of business enterprise created under Spanish law that constitute separate legal entities a foreign investor may operate in Spain through a branch.

The formation of a branch requires the execution of a public deed that must be registered at the Mercantile Register. From the foreign investment legislation viewpoint, the branch must have an assigned capital, which is not subject to any minimum amount requirement.

The branch must have a legal representative who is empowered by the home office to administer the affairs of the branch. Apart from this requirement, there are no formal administration or management bodies.

Except for the obvious differences in terms of internal structure and organization, a branch operates much like a corporation in its dealings with third parties.

The choice between forming a branch or a legal entity in Spain may be affected by commercial reasons; for example, a company may be deemed to provide a more "solid" presence than a branch.There are also other differences which are addressed in. different chapters of this publication.