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How to Purchase Shares in a Spanish Company

How to Purchase Shares in a Spanish Company

The process of purchasing shares in a Spanish company refers to the acquisition of property in that respective company. The purchasing process involves a transfer of the ownership and the procedure will require the assistance of a public notary in Spain. Foreign businessmen who want to acquire shares in a company established in Spain can receive assistance on this matter from our team of Spanish company formation representatives

Types of transfers available in Spain 

Investors who want to purchase various assets in a company have two options. They can purchase the assets (or a share of the assets) of a company, including its liabilities, if it may be the case. The second option refers to the purchase of shares. It is important to know that the transfer of ownership in this case implies a capital gains tax on the seller, which is generally applicable, but investors should know that there are several exemptions available in this situation. 

The transfer of assets will involve the payment of a capital gains tax, applicable to the seller. Investors buying shares in a Spanish company should also know that they will become responsible for the liabilities which may be incurred in the process, but they can also be covered through special provisions agreed upon in the sale/purchase agreementour team of Spanish company formation agents can offer more information on this matter. 

What are the regulations on the transfer of shares in Spain? 

The rights and obligations regarding the transfer of shares of a Spanish company have to be stated in the company’s articles of association, a document that must be completed in the first stages of the procedure of company formation in Spain. As a general rule, the articles of association will state that the company’s shares are freely transferable, but restrictions from this can also be included in this document. Some of the most important steps regarding the transfer of shares are the following: 

  • the purchase of shares in Spain is a procedure that can be completed through a local public notary;
  • in the case of a transfer involving registered shares, the procedure can be done through a certificate of title;
  • in the case of those opening a company in Spain as a listed legal entity, the transfer of shares is done by employing a different method;
  • in this case, the purchase of shares needs to be done through the stock exchange;
  • as a general rule, there are no restrictions in purchasing the shares of listed companies, but exemptions can appear. 

How can an investor purchase assets in a Spanish business?

One of the legal ways for purchasing ownership rights in a Spanish company is by purchasing assets. This procedure is seen as alternative method from purchasing shares of a Spanish legal entity and it can provide various advantages to the seller and buyer, which can come in the form of tax reductions; our team of specialists in company registration in Spain can advise on the steps included in this procedure. Some of the main benefits of the procedure are presented below: 

  • the seller can benefit from specific tax reductions, while the buyer can enjoy from limited risk on the purchased assets;
  • gains obtained from the sale of assets can benefit from a tax deduction of 12%;
  • this is applicable if the assets are sold at a higher value than their book price;
  • the tax deduction is applicable only as long as the profits are used for investments in fixed assets;
  • the regulation is applicable if the investor reinvests the respective sum in a given period of time.  

What are the obligations of a Spanish seller of shares?

When selling the shares of a Spanish company, the seller must comply with a set or rules. As a general rule, the shares are freely transferable and the seller does not need to perform a set of actions, as long as the persons to which the shares are transferred are other members of the company, the spouse, descendants or ascendants of the seller or other companies belonging to the same group with the one of the company selling its shares

However, in any other situations, when a shareholder wants to sell his or her shares, the transfer has to be approved by the company’s managing body. In this case, the seller must provide information on the number or shares to be sold, the identity of the purchaser, the price at which the shares will be sold and any other additional data concerning the transferour team of specialists in company registration in Spain can advise on other necessary procedures. 

What is the data on foreign ownership in Spain? 

Foreign investors can easily open a company in Spain and they can enjoy from the same rights available for local businessmen. A company in Spain can be formed with 100% foreign ownership, and this is applicable to most of the business sectors. Foreign companies seek to set up their business activities in Spain and they are characterized by the following aspects:

  • foreign owned companies in Spain generate approximately 28% of the country’s turnover;
  • in 2014, Spain represented the 9th global jurisdiction on the level of foreign direct investments;
  • in 2017, Spain was the home of more than 12,000 foreign companies; 
  • in comparison, in 2013, the country registered a total of 10,700 foreign enterprises;
  • in the first quarter of 2018, the level of foreign direct investments in Spain grew by 22.2% (compared to the same period of 2017). 

Those who want to start a business in Spain must also take into consideration that, in 2017, the country held the 5th rank as the most important economy in the European Union and the 13th at a global level. It is also an important market for import-export activities (in 2017, it occupied the 11th rank as an exporter of services and the 17th rank as an exporter of merchandise). Our team of consultants in Spanish company formation can advise on the regulations available for trading activities.  

Purchasing shares in Spain 

When purchasing shares in a Spanish company, it is highly recommended to perform due diligence procedures on the respective business. The seller is obliged by the local legislation to disclose relevant financial information to the purchaser, such as the books of accounts and tax returns. At the same time, the seller is allowed to require indemnities and warranties for the hidden liabilities of the company. 

The Spanish legislation does not prescribe any type of local or state taxes for the transfer procedure. Businessmen interested in receiving further details on the procedure referring to share transfer in Spain can address to our team of Spanish company incorporation consultantsOur representatives can provide more information on how to purchase or sell shares in a Spanish business