The situation
An expansion plan for a new country
A Dutch software group is opening in Spain and Poland next year. The board meets in three weeks and wants a memo: branch or subsidiary in each country, and why.
The trade-offs are familiar. The detail is local: how each country taxes a branch, what it takes to repatriate profit from a subsidiary, what the registration looks like. The memo has to be short and right.
What the research has to settle
The rules behind the answer
- A branch is taxed where it operates
- A branch is a permanent establishment of the parent. The host country taxes the profit attributable to it, and the parent remains liable for its obligations.
- A subsidiary is its own taxpayer
- A subsidiary is a separate company, taxed on its own profit, with liability limited to its own assets. Transactions with the parent must be priced at arm’s length.
- Getting profit home
- Dividends from an EU subsidiary to an EU parent can be exempt from withholding under the Parent-Subsidiary Directive when its conditions are met. Branch profits are already the parent’s, though some countries tax them on remittance.
- Losses and the head office
- Whether early branch losses help the parent depends on how the parent’s country treats foreign branch income, by exemption or by credit.
How it runs in azta
From the question to the document
The question, as you would type it
Dutch BV (software, SaaS) plans to enter Spain and Poland in 2027 with a sales and support team of five in each. Compare a branch and a subsidiary in each country on corporate tax, liability, dividend or profit repatriation to the Netherlands, and registration steps.
You start with
An expansion plan for a new country
- 01
Describe the plan
Give the parent’s country, the target countries, the activity and the expected first-year result. azta searches the national tax and company law of each country and the EU directives.
Cited research· Free - 02
Classify the activity
Ask for the activity code to register under in each country, with the reasoning.
Activity-code classification· Free - 03
Draft the memo
Ask for a two-page board memo with a comparison table per country and a recommendation section left for you. Edit it in Canvas.
Canvas · Ask azta· Pro - 04
Format it as the group’s document
On Enterprise, apply the group’s template and share it in the expansion workspace.
Firm templates· Enterprise You send
A board memo comparing a branch and a subsidiary
What you get
A board memo comparing a branch and a subsidiary
Board memo · draft
Market entry, Spain and Poland: branch or subsidiary
Question. Should the group enter Spain and Poland through a branch of the Dutch company or through a local subsidiary?
Tax. In both countries a branch is taxed on the profit attributable to it at the local corporate rate, as a subsidiary would be. The difference lies in repatriation and losses. Dividends from a Spanish or Polish subsidiary to the Dutch parent can be exempt from withholding when the Parent-Subsidiary Directive conditions are met, including the holding period.
Liability and set-up. A subsidiary limits the parent’s liability to its investment and is easier to sell or bring in a local partner. Both forms require registration in the local commercial register and for tax.
Outcomes on your numbers
What azta is worth on this task
Pro pays for itself after
9 minutes a month
At €180 an hour, that is all the time Pro (€27 a month) has to take off your desk to cover its price.
Example figures. Replace them with your own.
- Hours back a year
- 43
- Capacity at your rate
- €7,776
- More market-entry memos a quarter
- 0.8
- Return on Pro
- 24×
- Research
- Drafting
- Your review
A scenario you set, not a promise. The hours that come back go to another client, or deeper into this one.
Want these numbers on your team’s real workload?
Book a demoSources azta searches here
- EUR-Lex · Curia
- BOE
- Dziennik Ustaw
- wetten.overheid.nl
What stays with you
- The recommendation to the board.
- Commercial factors: customers, hiring, the exit plan.
- Engaging local advisors for the registration itself.
Frequently asked questions
- Does azta cover company law as well as tax?
- Yes. It researches tax and business law together, so the memo can cover liability and registration alongside tax.
- Can it compare more than two countries?
- Yes. Name the countries and ask for a comparison table. Each cell cites the national rule.
- Can the board memo use our group’s format?
- On Enterprise, firm templates apply your fonts, letterhead and disclaimers to every document.
