In the process of buying a company or its stakes from Spain internationally, multiple participants can be engaged. Actually, company acquisitions in Spain are much more common than purchasing a business through selling assets. This approach means that ownership of a business is transferred partially instead of a complete sale. It is still an alternative option in Spain as well.
In the Kingdom of Spain the procedure of buying a company or its assets mainly depends on several factors:
- The number of buyers;
- Whether negotiations are involved;
- Whether an auction was conducted.
These can also be considered as the steps of the procedure. If we talk about a major transnational corporation, each of these steps will take more time.
M&A transaction regulation
Contractual terms usually regulate M&A transactions in Spain. Although these terms include some provisions about asset trade regulation, the basic terms of M&A agreements can have higher importance. In addition, while Spanish laws are valid to regulate most M&A transactions, laws from other countries can be also applied.
The states or assets acquisition process in the Kingdom of Spain requests the fulfillment of certain formalities that depend on whether it is the case of LLC stakes on JSC stakes. Moreover, the purchase of the stakes leads to obtaining these rights:
- To sell or transfer stakes;
- To be a part of GSMs and voting;
- To receive reports of a company’s activity;
- Receiving dividends and other rights.
The purchase of shares entitles a buyer to have full legal protection. However, a buyer takes over an obligation to pay off any substantial debts that a company had while an M&A operation was processed. It is also important to note that Spanish tax authorities have a right to demand information disclosure connected to unpaid debts.
Restrictions
In the Kingdom of Spain, an LLC company owner must offer a stake to other shareholders if they want to sell it. Only after that, an owner can propose it to a 3rd party. Nevertheless, this rule is not valid for JSCs.
Taxes
In Spain, property transfer tax is not normally applied when it comes to a company transfer. That means that transfer tax is collected if immovable assets to which VAT is not applicable are involved in a deal. To sum up, the property transfer tax is applied mostly for the cases when a company is majorly consisting of real estate.
Employees
For the occasion when someone buys stakes of a Spanish company, it does not affect the personnel at all. The reason for that being that the employer stays unchanged. Yet if we speak about an acquisition of a whole business from Spain, the new employer becomes responsible for giving social security, jobs, and pension payment to the company’s employees.
COREDO is here to help you perform an M&A transaction if you are planning to buy a company in Spain. We will provide you with all the details of the regulation conditions and necessary advice.