Establishing a separate local legal entity is often advisable in order to ring fence any liability emanating from the activities of the local subsidiary to that company.
Most countries operate with a simple form of a limited liability company with a lower capital requirement and less onerous management requirements and a more complex structure which is suitable for many shareholders and/or public offering of shares.
Please note that in most European countries there are minimum capital requirements of typically EUR12.500 and that it may often take a bit longer to form a company locally than what we are used to in the UK.