Redomiciliation of Foreign Companies to Spain

Other News, Fiscal News

When we speak of redomiciliation or transfer of registered office of a company, it is not just a change of the effective address or a change of the tax address of the commercial company. It is also about transforming the corporate form of the entity to adapt it to the commercial and statutory rules that govern the country of destination. For this, the company must change its nationality, modify its bylaws, adapt the capital stock to the minimum required by the destination law, change its currency if necessary, and the legal form of the aliquots into which the social capital is divided. These changes must be previously agreed by the general meeting. On many occasions, it will also be necessary to increase the share capital, prior to or simultaneously, to the adoption of the residence transfer agreements to reach the legal minimum required by the destination country.

There are many reasons that motivate a redomiciliation to Spain or abroad, among others a change in the strategy or in the direction of the company or group of companies, the need to expand to new markets or the need to simplify the structure. It should also be noted that recently there has been an increase of redomiciliations of offshore companies to Spain given the existing anti-fraud regulations of the Organisation for Economic Co-operation and Development (OECD).

The international transfer of entities that change their registered office abroad is regulated in Title V, Chapter I of Law 3/2009 of April, on structural modifications of commercial companies.

Articles 95 to 103 set out in detail the requirements to be met by Spanish entities that intend to transfer their registered office abroad, but on the other hand, the requirements that foreign companies must meet for their transfer to Spain are barely defined. The latter are included in article 94 of Law 3/2009 of April, on structural modifications, as well as in article 309 of the Regulations of the Mercantile Registry in which it is indicated that when a foreign entity transfers its domicile to Spain, it will include in the first registration all the acts and circumstances that are mandatory in accordance to Spanish regulations and are in force in the foreign Registry. In addition, the simultaneous deposit in the Mercantile Registry of the annual accounts corresponding to the last year ended.

As indicated in article 93 in relation to Spanish companies, the transfer of the domicile of a company abroad may only be carried out if the State, to whose territory the company is transferred, allows the maintenance of the legal personality of the company. It is also a sine qua non requirement in almost all foreign jurisdictions when the registered office is transferred to Spain.

For this, the Spanish Mercantile Registrar usually requires the Registrar of the Country of origin to expressly certify that, in accordance with its commercial laws, the entity is authorized to transfer its registered office to Spanish territory, thus continuing there with its commercial obligations.

If, on the contrary, the company were liquidated during the transfer process, losing its legal personality and interrupting the continuity of its commercial activities, the legal and tax consequences of the transfer could change radically.

As with foreign companies that transfer their registered office to Spain, Spanish companies may not transfer their domicile abroad if they are in liquidation or bankruptcy (article 93.2)

In the case of the countries that are governed by the “Common law” to be able to accredit it before the Spanish authorities, a “certificate of good standing” is usually provided, issued by the commercial registrar of the country of origin, which certifies that the company is not in liquidation or in bankruptcy, nor in the process of merging with other entities and that it is up to date with its commercial obligations.

It is noteworthy according to article 94 law 3/2009 that “foreign capital companies that intend to transfer their registered office to Spain from a State that is not part of the European Economic Area must justify with an independent expert report that their net worth covers the figure of the capital stock required by Spanish law. ” In other words, the net worth of the company must cover at least the 3,000 Euros of minimum share capital required by Spanish Commercial Law and for this an account auditor, appointed by the commercial registry of the new registered office where the company is to be located, must analyze the assets and liabilities of the company.

To determine whether is part of the European Economic Area or not, it will be necessary to check what international treaties say.

Once the redomiciliation process has concluded, the country of origin will request a certificate from the destination commercial registrar to prove that the company is duly registered and thus close the registration form in the origin commercial registry.


Susana Vázquez Ayala

Lawyer specialized in Commercial Law

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