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Other alternatives for investing in Spain

8.1. Acquisition of shares of an existing corporation or of a limited liability company

The following Table 15 summarizes the fundamental legal steps involved in the acquisition of shares of an existing corporation or limited liability company.

Table 15

LEGAL STEPS AND COSTS

FORMALITY S.A.
Attestation by public authenticating officer Necessary where required by Spanish law or by the bylaws or where so agreed by the parties.
Documentation to be provided to the notary
  • Title to the shares being transferred.
  • Powers of attorney, as the case may be, to appear in the name of the buyer or seller, as appropriate. If the powers of attorney were granted abroad, they must be duly legalized (see requirement 5 under section 4 above).
  • N.I.E./N.I.F. or Spanish national identity card of the buyer and the seller (see section 3 above).
  • Declaration regarding the beneficial owner, from both the buyer and the seller, if legal entities: a notarial document containing representations by the beneficial owner may be provided or a declaration made in the deed itself (see requirement 4 under section 4 above).
  • Documentary evidence of payment and how the payment was made (specifically, if the price was received before execution of the deed, the amount and whether it was paid by check or any other money transfer document, or by bank transfer).

Subsequent declaration of the investment to the DGCI

Filing of form D-1A at the Ministry of Economy and Competitiveness.

This form must include the protocol number and date of the public document formalizing the investment, must be signed by telematic means by the individual or legal entity making the investment and countersigned by the public authenticating officer, and filed by telematic means via the website of the Directorate-General for International Trade and Investments (DGCI).

In some cases, a prior declaration is required (Chapter 1, section 8 for further information).

Payment of transfer tax and stamp tax under the “transfers for consideration” heading See Chapter 3
Costs Depending on the Spanish public authority before which the acquisition is made:

  • Notary fee: the scale applicable for the formation of a branch is also applicable here.
  • Fee of Spanish Consul abroad: the fee will be determined in the legislation in force on notarial fees.

In relation to this form of investment, with effect from January 1, 2017, shareholders of limited liability companies and (unlisted) corporations are recognized a right of withdrawal if at least one-third of the legally distributable profit obtained from pursuit of the corporate purpose in the preceding year is not distributed as a dividend29. In particular, this right is recognized as from the fifth year following the registration of the company at the Commercial Registry to shareholders who voted in favor of the distribution of dividends, who will have a period of one month as from the date of the annual shareholders’ meeting in which to exercise this right.

8.2. Acquisition of real estate located in Spain

Set out below are the main legal formalities to be performed for the acquisition of real estate located in Spain (Table 16).

Table 16

ACQUISITION OF REAL ESTATE LOCATED IN SPAIN

FORMALITY ACQUISITION OF REAL ESTATE LOCATED IN SPAIN
Attestation by public authenticating officer The acquisition must be formalized before a Spanish notary or Spanish Consul abroad.

Documentation to be provided to the notary

  • Title to the property.
  • Powers of attorney, as the case may be, to appear in the name of the buyer or seller, as appropriate.
    If the powers of attorney were granted abroad, they must be duly legalized. (See requirement 5 under section 4 above).
  • N.I.E./N.I.F. or Spanish national identity card of the buyer and the seller.
  • Declaration regarding the beneficial owner, both for the buyer and the seller, if legal entities: a notarial document containing representations by the beneficial owner may be provided or a declaration made in the sale and purchase deed itself (see requirement 4 under section 4 above).
  • Documentary evidence of payment and how the payment was made (specifically, if the price was received before execution of the deed, the amount and whether it was paid by check or any other money transfer document, or by bank transfer).
Subsequent declaration of the investment to the DGCI

In some cases, prior declaration is required (see Chapter 1, section 8 for further information).

Taxes See Chapter 3
Registration at the relevant Property Registry The acquisition must be registered at the relevant Property Registry as soon as the sale and purchase deed has been formalized and the related taxes have been paid in order to ensure that acquirer’s property rights are duly protected.
Costs
  • Notary fee: the scale applicable for the formation of a subsidiary is also applicable here.
  • Fee of Spanish Consul abroad: the fee will be determined in the legislation in force on notarial fees.
  • Property Register fees: for guidance purposes, the official rates amount to €24 if the value of the property does not exceed €6,010, plus a variable rate of between 0.00175% and 0.0002% . The total fee is capped and may not exceed €2,181.

8.3. ACQUISITION OF A BUSINESS

As an alternative to the sale and purchase of shares in Spanish companies, the investment in Spain could be made by acquiring a business, either through an agreement for the sale and purchase of the assets and liabilities of a Spanish company, or through a global transfer of the assets and liabilities of a company (Table 17).

Table 17

ACQUISITION OF A BUSINESS

FORMALITY SALE/PURCHASE OF ASSETS AND LIABILITIES GLOBAL TRANSFER

Requirements

If the seller or buyer is a legal entity and the sale or purchase, respectively, are of an essential asset (i.e. the amount of the transaction exceeds 25% of the value of the assets that appear in the last approved balance sheet), the transaction must be approved by the shareholders’ meeting of the selling company or of the buying company, as appropriate.

Under the Structural Modifications Law:

  • Global transfer plan, drawn up by the directors of the transferring company;
  • Report applying and justifying the global transfer plan drawn up by the directors of the transferring company;
  • Approval of the global transfer by the shareholders of the transferring company;
  • Publication of the resolution on the global transfer approved by the shareholders of the transferring company in the Official Gazette of the Commercial Registry and in a large circulation newspaper in the province where the transferring company has its registered office.
  • Expiration of the statutory period for objection by creditors: one month from the date of publication of the last notice of the global transfer resolution.
  • Execution of a public deed before a notary (see formality below “Documentation to be provided to the notary”).
  • Registration at the Commercial Registry of the transferring company (effectiveness of the transfer) (see formality below “Registration at the appropriate Registry”).

Attestation by public authenticating officer

The acquisition must be formalized before a Spanish notary or Spanish Consul abroad.

Documentation to be provided to the notary
  • Title of ownership of the assets.
  • Powers of attorney, if applicable, to appear on behalf of the seller and buyer, as appropriate. If granted abroad, it must be duly legalized (see requirement 5 of section 4 above).
  • Spanish N.I.E./N.I.F./D.N.I. of the seller and buyer.
  • Declaration regarding the beneficial owner, both for the buyer and the seller, if legal entities: a notarial document containing representations by the beneficial owner may be provided or a declaration made in the sale and purchase deed itself (see requirement 4 under section 4 above).
  • Documentary evidence of payment and how the payment was made (specifically, if the price was received before execution of the deed, the amount and whether it was paid by check or any other money transfer document, or by bank transfer).
  • Title of ownership of the assets.
  • Powers of attorney, if applicable, to appear on behalf of the transferor and transferee. If granted abroad, it must be duly legalized (see requirement 5 of section 4 above).
  • Spanish N.I.E./N.I.F. of the transferor and transferee.
  • Declaration regarding the beneficial owner, both for the buyer and the seller, if legal entities: a notarial document containing representations by the beneficial owner may be provided or a declaration made in the global transfer deed itself (see requirement 4 under section 4 above).
  • Documentary evidence of payment and how the payment was made (specifically, if the price was received before execution of the deed, the amount and whether it was paid by check or any other money transfer document, or by bank transfer).
  • Certificate of the resolution of the shareholders’ meeting or the decision of the sole shareholder of the transferring company approving the global transfer
  • Notice of the transfer in the BORME and in a large circulation newspaper in the province where the registered office is located, if applicable.
Subsequent declaration of the investment to the DGCI In some cases, prior declaration is required (see Chapter 1, section 8 for further information).
Taxes See Chapter 3
Registration at the appropriate Registry As soon as the purchase deed has been formalized before a notary and the related taxes have been paid, it will be necessary to register the immovable property at the appropriate Property Registry, as well as the movable property at the Movable Property Registry, in order to ensure that the acquirer’s property rights are duly protected. The transfer will take effect upon registration at the Commercial Registry pertaining to the registered office of the transferring company. If the company is extinguished as a result of the transfer, its registry entries will be cancelled.
In addition, the directors of the participating companies must submit a copy of the global transfer plan for filing at the Commercial Registry.
Costs
  • Notary fee: the scale applicable for the formation of a subsidiary is also applicable here.
  • Fee of Spanish Consul abroad: the fee will be determined in the legislation in force on notarial fees.
  • Property Register fees: for guidance purposes, the official rates amount to €24 if the value of the property does not exceed €6,010; thereafter rates of between 0.175% and 0.02% are applied. The total fee is capped and may not exceed €2,181.
  • Movable Property Registry fee: for guidance purposes, the fee amounts to €2.40 if the value of the property does not exceed €60; thereafter rates of between €6 and €13 apply up to a property value of €18,000. For any excess over €18,000, a fee of €1.20 will apply to each €3,000 of excess.
  • Commercial Registry fee: for guidance purposes, the fee amounts to €6.010121 if the value of the assets does not exceed €3,005.06; thereafter rates of between 0.1% and 0.005% apply. In any event, the overall fee may not exceed €2,181.673939.

8.4. VENTURE CAPITAL ENTITIES

Another way to invest in Spain is to take up temporary stakes in the capital of companies established in Spain (i.e. non-real estate, non-financial and unlisted companies) by forming venture capital entities. Venture capital is defined as those investment strategies that channel financing directly and indirectly to companies, maximize the value of the company through management and professional advice, and divest from the company with a view to earning high gains for the investors. Through this channel, it is possible to invest both in start-up business projects (venture capital), and in already mature companies with a proven track record of profitability (private equity).

The current regulation of venture capital in Spain, contained in Law 22/2014 of November 12, regulating venture capital entities, other closed-end collective investment undertakings and the management companies of closed-end collective investment undertakings (the “Venture Capital Law”), relaxes the legislative framework for these entities with, among others, the aim of helping them to raise more funds to be able to finance a larger number of companies.


29 Article 348.bis of Legislative Royal Decree 1/2010, of July 2, 2010, approving the Revised Capital Companies Law, the application of which was suspended until December 31, 2016.