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A “sociedad anónima” –“public company (S.A.)”- is used in the following circumstances:1- If an activity reserved by the Companies Act will be carried out (banking companies,pharmaceutical companies, pension funds management companies, insurance companies,among others).2- If significant movement of capital is expected.3- If, as a shareholder, who will not take part in the management of the company, theintention is to be especially formal in the performance of the company’s acts, which mayhave greater impact on the investment (for instance: merger, transformation, dissolution,convening an annual general meeting, capital reduction, non-monetary contributions, etc.)In either case, before making a decision, consulting a legal advisor is recommended....branch or subsidiary?A branch office is not a separate legal entity. It is dependent on the head office and doesnot require a minimum allocation. This option may be of interest if the head office wishesto have greater control over the branch’s activity. Keep in mind that the parent companywill be held accountable with its own capital for the activities of its branch.A subsidiary, because it is an independent legal entity, generally has greater flexibility ofaction and shares the risk with its head office....branch or representative office?The representative office will only be useful when no economic activity is to take place inSpain and only if it is engaged in coordination, collaboration or promotion of the parentcompany’s office.The above notes and comments are published as a service to our clients and collaborators onlyfor informative purposes. The object of such comments does not substitute the specific legaladvice that should be required for every case and its transmission does not create any bindingrelation lawyer-client between the sender and the recipient. Bufete B. Buigas, S.L. makes availableto you all the services of its law firm if further or additional information is required on the subjectcontained in this Report.Source of information:ICEX, The Spanish Institute for Foreign Trade.Ministry of Economy and Competition of Spain.45