How to invest in a Spanish company – tax matters

Investment in Spain 698 x 400 black and white

Are you thinking of investing in a Spanish Company? Then you are not alone… Spain received a total of €850 Million from Chinese investors in 2015, as we recently published on this blog. Depending on which type of investment you want to make, and from which country you are making the investment, different rules apply; so be sure to seek expert advice.

 

LEGAL & TAX ANALYSIS AND ADVICE

Whether you are a company based abroad wanting to buy a share in a competitor or partner company in Spain, are looking to set up a private equity fund, or are a private investor; you need to get the right legal and tax advice. You may even be considering the creation of a company in Spain as an investment vehicle. Whatever your situation, your local corporate law firm will take you through every step of the investment process.

 

PROTECTIONS, RIGHTS AND RESPONSIBILITIES

Before carrying out due diligence, your lawyer will give you the relevant legal advice on tax, protections, rights and responsibilities, based on your unique case. For example did you know that if you are buying a Spanish company outright, you can limit your responsibilities in specific ways and that your lawyer will apply for an official certificate issued by the Spanish Tax Agency on your behalf? Spanish law states that you must obtain this certificate before proceeding with a company purchase as stated in “artículo 42.1 de la Ley General Tributaria”.

 

DUE DILIGENCE PERIOD BEFORE INVESTING IN SPAIN

The next step is to carry out the due diligence which your lawyer will do on your behalf.

Working to your bespoke case they will

  • Create and send a check list of information and processes to complete to the company you are interested in investing in.
  • Analyse the information and documents received back.
  • Produce an executive report, which will expose whether or not there are any legal grounds to prevent the deal going forward.
  • Deliver a detailed report to you in which findings and options are presented, including whether it is advisable to complete the deal, or to propose alternative solutions and recommendations for future consideration.

The objective is to provide investors with meaningful information and specialist local tax advice to help you make the right decisions about your investment. They will work to complete your investment operation in a time period of 3 to 6 months.

Specialized law firms in Spain have a wealth of experience, to complement any information provided by corporate consultants or investment banks, so you need to get your local lawyer on your side before investing in Spanish companies.

To find out more please contact corporate law firm Argali Abogados.

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