Partners - Spain

Updated 11/2010

Legal requirements

The body of law regulating the various types of business cooperation in Spain consists of a series of very diverse laws, some of which incorporate the corresponding European directives or regulations. The following section sets out the main laws for each type of business cooperation.

Types of cooperation

Going into partnership with other businesses (joint ventures) is a popular way of setting up a business, as it allows risks to be shared and resources and experience to be pooled. The most commonly used forms of joint venture in Spain include the Economic Interest Grouping (EIG), the European Economic Interest Grouping (EEIG), the temporary joint venture (TJV) and the partnership agreement.

Economic Interest Groupings
Law on the tax system for temporary joint ventures and groupings
Commercial Code - Partnership agreements

It is also possible to enter the Spanish market, without having to physically establish an operations centre in Spain, in the following ways:

distribution agreements;
operating through an agent or broker;
setting up a franchise.
Law on agency agreements
Law on the retail trade

Spain has a large number of franchises, particularly in the hotel sector, which has the most. More information on opportunities for establishing franchises in Spain is available through the following link:

Forms of business cooperation

New types of business structure in Europe

The aim of the European Economic Interest Grouping (EEIG) is to facilitate or develop the business activity of its members and improve or increase the profits from this activity, by pooling resources, activities and skills.

European Economic Interest Grouping
Economic Interest Groupings

The European Company offers businesses established in different EU countries the possibility of merging or creating a European Company with shared capital, thus avoiding legal and practical difficulties resulting from differences between national law.

European Company
Transposition of Directive 2001/86/EC: Law on the involvement of employees in European Companies and European Cooperative Societies

The European Cooperative Society allows cooperative societies to operate internationally through collaboration, cooperation or mergers between existing cooperative societies in different Member States, or by setting up new European cooperative societies.

European Cooperative Society
Transposition of Directive 2001/86/EC: Law on the involvement of employees in European Companies and European Cooperative Societies
Finding partners - European Union

Other options for expanding your business are taking over an existing one, merging with another company or opening a branch in another EU country.

Administrative procedures

Registration

In Spain it is compulsory to register in the public Franchise Register , which is held by the Directorate-General for Domestic Trade (part of the Ministry of Industry, Tourism and Trade), prior to starting any franchise activities that will be carried out in the territory of more than one Autonomous Community.

Franchise Register
Registration in the Franchise Register

Taxation: How to avoid double taxation

There are two types of double taxation: legal and financial.

Legal double taxation: this involves a taxpayer paying similar taxes in two (or more) States for the same taxable object and over the same period of time.
Financial double taxation: this involves the same financial transaction, income or balance sheet item being taxed by two or more States during the same period but by different tax collecting bodies.

The best way of combating this phenomenon is by signing agreements to avoid double taxation. This type of agreement is essential to promote foreign investment, whether foreign investment in Spain or the investment of Spanish capital abroad, as it provides investors with legal certainty and reduces taxation on such investments.

Spain currently has 74 double taxation agreements in force, and another 14 at various stages of negotiation.

Double taxation agreements signed by Spain

The Corporation Tax Law establishes a series of measures to alleviate double taxation as far as possible, using two methods: deductions on payments and exemptions applicable to the tax base.

Corporation Tax

Check also the legislation on this topic in:

Partners - Spain