Investing successfully in Spain

In this post from Devesa & Calvo Abogados in Alicante, the key aspects to achieve how to invest successfully in Spain from a tax and legal point of view are analysed. Because, as our experience in advising international investors has shown us, there are many aspects to take into account and many legal disciplines involved.

First of all, an investor planning to invest in Spain must be able to comply with money laundering prevention. In this regard, our credit institutions have internal compliance departments designed to verify that natural or legal persons (companies) that wish to open a current account in Spain, comply with all the requirements set out in Law 20/10, of the 28th of April, on money-laundering prevention and terrorism prevention. In this regard, it is essential to prove the origin of the funds to be invested in Spain, the origin balances and the correlation between these balances and the declarant’s capacity to generate income.

Another key aspect for a successful investment in Spain is to analyse the most favourable taxation for the operation or activity that is desired to undertake. Thus, it will be necessary to analyse the comparison between investing and operating directly as a non-resident in Spain or a foreign company or doing so through a subsidiary, a branch or a permanent establishment, for example, also analysing whether or not there is an international double taxation agreement with the country of origin and under what terms.

Within the investor’s strategic approach and in relation to the above tax aspects, we must also take into account whether what the international investor wishes to acquire is a specific asset or a company. It is true that in any case, it is advisable to carry out a due diligence report to analyse possible legal and tax contingencies that may affect the price of the operation when what is being acquired is a company, this process is more intense because the globality of rights and obligations is assumed (with the consequent risk that there may be hidden liabilities).

Another of the tasks that we generally undertake for international investors in the context of this investment in Spain is to obtain for the investor the so-called “golden visa” or residence permit for investment in Spain, which can be extended to family members and dependents of the applicant investor.

In addition to the analysis of the aforementioned key points, there are always many other considerations that require specialised and valuable advice: commercial contracts, administrative law for obtaining the necessary permits or licences to carry out the activity, having a clear understanding of labour and social security legislation when the investor needs to hire employees and managers, as well as many other issues that must be left well tied up, depending on the specific case.

David Devesa Rodríguez.

Founding partner – CEO of Devesa & Calvo Abogados.

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