The persons or legal entities owning shares in a Spanish company are allowed to sell them following a set of rules imposed by the Spanish legislation. Shareholders can sell their shares in accordance with the proportion owned in the company and with their statute (minority or majority shareholders). Our team of company formation specialists in Spain can provide legal assistance and advice in this matter.
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Selling shares to a foreign person in Spain
The shareholders are allowed to sell their shares to natural persons or legal entities. When the buyer of the shares is a foreign natural person, the local legislation requires the individual to own a Spanish tax identification number (Numero de Identification Extranjero – NIE), which is issued to all foreigners with financial or social activities in Spain. The NIE is necessary for all foreigners with activities in Spain, regardless if they are citizens of the European Union or of countries outside the Community.
Certify the deed of sale in Spain
The selling procedure signifies the transfer of ownership on the respective shares, which is performed through a deed of sale. The deed of sale is signed in front of a public notary in Spain and the seller and the buyer have to be represented by their legal representatives; our team of company formation agents in Spain can offer assistance in this process.
When performing this action, the buyer should present the following documents: the power of attorney, when applicable, identity documents, presented in original and a declaration of foreign investment. Our team of specialists in company registration in Spain can offer further information on other documents that can be required in this case. This type of document is generally issued in a period of one month since the day in which the company received information regarding the future purchaser.
Selling shares to a Spanish shareholder
Investors also have the possibility of selling the company’s shares to other shareholders of the same company. The procedure is performed under the rules of the Law 1/2010, Article 107. In this situation, the transfer of shares does not involve a transfer tax. The transfer is free and it can be done based on voluntary transfer of shares between the shareholders of a company (for a company set up as a limited liability company).
The same regulation applies when the transfer of shares is done in the favor of specific types of entities. Thus, it applies when referring to the shareholder’s spouse and close relatives (ascendants or descendants); this rule is available during the transfer of shares of businesses that belong to the same group of companies, as stipulated by the same law. In this case, the shareholder does not need the approval of the company’s directors. Provided that the party to which the shares are sold represents a third party, the following apply:
- the transfer of shares is no longer free and it will imply the payment of a transfer tax;
- the shareholder selling his or her shares in the company needs to obtain the approval of the company’s directors;
- the directors will need to be informed on a specific set of information regarding the transfer;
- thus, the shareholder must provide information on the number of shares to be sold;
- the shareholder should also state the share he or she owns in the company and wants to sell and the price at which they are sold;
- the set of data must also offer information on the buyer and the sale of shares will be possible only after it was approved by the company.
When opening a company in Spain, one of the main aspects of the procedure is to draw and sign the company’s statutory documents; the company’s bylaws must also include details on the shareholding structure of the company, the shares owned by each shareholder and their nominal value.
Beside this, the articles of association may also state limitations regarding the rights the shareholders have when selling their shares and additional requirements may be necessary during the transfer of shares, based on the provisions of this document. The procedure is completed through a public notary in Spain, the entity that is also involved in the Spanish company formation procedure.
When the shareholders are legally required to inform the company’s directors on the transfer of shares, they must do so in writing, by providing information on the above mentioned aspects, but also on the conditions in which the transfer will be concluded. The consent of the company must be provided in the form of an agreement, which is voted during the company’s general meeting (it needs to have the majority vote in order for the agreement to be approved).
What are the taxes on the sale of shares in Spain?
Spain does not apply a transfer tax per se, but the transfer of shares, which are seen as assets under the Spanish legislation, is imposed with the capital gains tax. This type of tax is applicable for the transmission of goods to other parties and in this country, it is imposed for the ownership transfer of assets such as: real estate properties, bonds, precious metals and shares.
The tax is imposed based on the nature of the entity which transfers the respective shares (natural persons, legal entities, foreigners). Thus, the capital gains tax can be imposed with various rates. In the case of a natural person, the personal income tax will apply, while in the case of a legal entity, the corporate tax is applicable.
When referring to non-residents, this type of transfer operation will be calculated based on the personal income tax for non-residents; our team of consultants in company registration in Spain can provide more details on the tax system available for corporate and non-corporate entities. However, it is necessary to know that the following apply:
- in the case of natural persons, the personal income tax is applied progressively at rates varying between 19% to 23%;
- in the case of an income below EUR 6,000, the tax is imposed at a rate of 19%;
- income between EUR 6,000 and EUR 50,000 is taxed at a rate of 21%;
- the income of natural persons which is above EUR 50,000 is taxed at a rate of 23%;
- the capital gains tax applicable on the transfer of assets to non-residents in Spain is taxed at a rate of 24%;
- the transfer of shares to non-residents in Spain who are tax residents of countries from the European Union, Iceland and Norway is imposed with a tax of 19%.
As a general rule, the shareholder would need the approval of the other shareholders for the transfer, but when the shares are sold to another associate, the approval of the other shareholders is not necessary. Investors interested in selling shares in a Spanish company can address to our team of consultants in company formation in Spain for representation. Our representatives can provide legal advice on this procedure and may also assist in purchasing shares in a Spanish company.