Guide to business in Spain Guía de negocios en España

INVEST IN SPAIN

7. Other alternatives for operating in Spain


7. OTHER ALTERNATIVES FOR OPERATING IN SPAIN

7.1. Forms of business cooperation

One of the most common forms of business cooperation between companies is the joint venture (J.V.). Spanish law provides for different forms of joint venture, allowing transactions to be performed between one or more parties:

7.2. Temporary Business Associations (U.T.E.s)

  • Concept/purpose: Under Spanish law, U.T.E.s are temporary business alliances set up for a specified or unspecified period of time, for the purpose of carrying out a specific project or service. U.T.E.s allow several companies to operate together on one common project. This form of association is very common for engineering and construction projects but can be used in other sectors as well.
  • Legal personality: U.T.E.s are not companies in the strict sense and have no legal personality.
  • Fiscal transparency regime: While they have no legal personality, in order to qualify for the special fiscal transparency regime provided for U.T.E.s, they must be formed by notarial deed and registered on the Special Register of U.T.E.s at the Spanish Ministry of Finance and Public Administration and must comply with bookkeeping and accounting requirements similar to those of Spanish companies. They may be also registered at the Commercial Registry. Formalities for formalization of a U.T.E are similar to those for a company or branch, adjusted to reflect the special characteristics of this type of arrangement.
  • Regulation: U.T.E.s are governed by Law 18/1982, concerning the Tax Regime of Temporary Business Groupings and Associations and Regional Industrial Development Companies, amended, among others, by Law 12/1991, Law 43/1995 and Law 62/2003.

7.3. Economic Interest Groupings (E.I.G.s)

  • Concept/purpose: E.I.G.s are created with a view to facilitating the pursuit or enhancing the profitability of the activities of their members. E.I.G.s may not act on behalf of their members nor may they substitute them in their operations. Consequently, the E.I.G. is most commonly used to provide secondary services, such as centralized purchasing, sales, information management or administrative services, within the context of a broader association or group of companies.
  • Legal personality: One of the key differences between U.T.E.s and E.I.G.s is that E.I.G.s are commercial entities with a separate legal personality.

Guide to business in Spain

Establishing a business in Spain

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ICEX - Gobierno de España - Ministerio de Economía y competitividad
Elaborado por Garrigues - Abogados y Asesores Tributarios
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