A UK branch or a UK company? Corporation Tax for Spanish groups

When a Spanish company starts trading in the UK it can do so through a branch or through a UK subsidiary. Both work; the difference is in who files, where profits are taxed and how much administration follows.

A branch

The Spanish company registers in the UK as an overseas company and pays Corporation Tax on the profits of its UK permanent establishment. The branch has no separate legal personality, so contracts and liabilities stay with the Spanish company.

A subsidiary

A UK limited company with its own accounts at Companies House and its own Corporation Tax return. Profits up to £50,000 are taxed at 19 % and above £250,000 at 25 %, with marginal relief in between. Dividends paid to the Spanish parent are generally exempt in Spain when the participation conditions are met.

How to choose

A branch is quicker to open and suits a first test of the market. A subsidiary limits risk, looks more local to customers and is easier to sell or bring investors into later. Transfer pricing between the two entities applies in both cases.

We compare both options with real numbers before you register anything. Most of our clients choose in a single meeting.