French companies in Spain: SAS, SARL or Spanish SL.
Same corporate tax rate, very different cost of employing people. For French companies the Spanish subsidiary question is usually decided by labour economics rather than by tax.
France and Spain share a land border, a corporate tax rate and a great deal of trade. French companies are among Spain's most established foreign investors, and French managers generally arrive with fewer illusions than most about how European administration works.
What they do arrive with is a French frame of reference for the cost of employment — and that frame is the single largest variable in the decision. A French company weighing whether to serve Spain from Toulouse or from a Spanish subsidiary is, more often than it realises, making a labour cost decision dressed as a structuring one.
Which French form maps to what.
France offers more entity choice than Spain does, and French founders often expect an equivalent range. Spain is simpler: for practical purposes the SL covers what both the SAS and the SARL are used for.
| French form | Character | Spanish equivalent |
|---|---|---|
| SARL | Closely held, statutory governance, gerant | SL — the natural match |
| SAS / SASU | Highly flexible statutes, president, favoured by startups | SL, though with less statutory flexibility than an SAS |
| SA | Larger, board structure, higher capital | SA — rarely needed at entry |
| Succursale | Branch of the French company, no separate legal person | Sucursal — same concept, same limitation |
| Auto-entrepreneur | Individual, simplified regime | Autonomo — a person, not a company |
Spanish statutes are less freely drafted than an SAS.
The SAS is prized in France precisely because its statutes can be tailored almost at will. A Spanish SL operates within a more prescriptive framework, and governance flexibility that would sit in the statutes of an SAS often has to live in a shareholders' agreement instead. This is a drafting adjustment, not an obstacle, but it surprises French founders who expect equivalence.
The labour cost question.
Both countries tax corporate profit at 25%, so the rate tells you nothing. Where the two diverge materially is in what it costs to put a person on a payroll — and for service businesses, where labour is most of the cost base, that difference compounds through every year of operation.
The honest caveat: Spain is not a low-cost labour market in absolute terms, and the difference narrows sharply for scarce technical roles in Barcelona and Madrid. The saving is real for volume roles — support, operations, sales, administration — and considerably smaller for senior engineering.
Serving Spain from France: the border problem.
Proximity is why French companies delay creating a Spanish entity longer than more distant entrants do. Barcelona is closer to Toulouse than to Madrid; Bilbao is a short drive from the border. A French sales team can cover northern Spain without anyone thinking of it as international expansion.
Regular presence without a structure
Sales staff crossing weekly, contracts effectively concluded in Spain, a small office or warehouse, technicians on client sites. Each element is individually unremarkable and collectively a permanent establishment.
A Spanish SL selling as principal
The same commercial reality, deliberately structured: the SL contracts with Spanish customers, employs the Spanish staff, and settles with the French parent at arm's length. Same activity, filed rather than discovered.
Tax and social security do not follow the same rules.
A French employee working regularly in Spain raises an income tax question governed by the treaty and a social security question governed by EU coordination rules. They can produce different answers in different countries, and having one right does not mean the other is. Cross-border workers need both analyses and the correct posting documentation.
Where French companies land.
A Spanish SL for a French group, without travelling.
The deed signed by proxy under a French power of attorney, apostilled and sworn-translated. Incorporation, NIF, tax activation, VAT and ROI and a bank-ready file as one engagement.
Flows between the French parent and the SL.
- Dividends — potentially 0% under the Parent-Subsidiary Directive, subject to holding, period and anti-abuse conditions
- Interest and royalties — potentially 0% under the Interest and Royalties Directive between associated companies
- Goods — intra-community supply, requiring both entities registered for intra-community operations
- Management and service fees — deductible where genuine, priced at arm's length and documented
- Tax residence certificate — required from the French authorities before Spain applies a reduced rate
- Related-party reporting — a separate Spanish obligation that groups frequently overlook
Is there a Spanish equivalent of the SAS?
Can we serve Spain from our French company?
Is it genuinely cheaper to employ in Spain?
What about our employees who work across the border?
How long does setting up take from France?
The France-Spain cluster.
Same tax rate. Different cost of a person.
Book a free call ↗Alexander Baranov
Seventeen years designing and delivering cross-border corporate structures — incorporation, tax, holding, banking and market entry — for founders and companies expanding into Spain and the EU. Author of professional books on entering the Spanish market.
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