International relocation of registered office

Since 2009, in Spain, the international transfer of the registered office is regulated as a structural modification operation (merger, transformation, division, global transfer of assets and liabilities…)

The law on structural measures states (Article 94) that the transfer of registered office does not affect the legal personality. Thus, a company incorporated in accordance with the regulations of another State may, a priori, transfer its domicile to Spain. In order to carry out this transfer, it will be necessary to comply, in Spain, with the requirements analysed below.

What requirements does the Law on Structural Measures establish for relocating the registered office to Spain?

The company being transferred must comply with the requirements of Spanish law. In other words, it must comply with the requirements for incorporation according to the corporate form adopted.

In the case of companies incorporated outside the European Economic Area (EEA), an expert’s report will be required. This report must justify that the company’s net worth covers the share capital required by Spanish law.

The Directorate-General of Registries and Notaries has issued several rulings on this second requirement.

The resolution of 14 March 2014 requiring an expert’s report for the transfer of the domicile of Gibraltar to Spain is especially significant.

In this resolution whether Gibraltar can be considered a territory of the European Union  is analyzed. In such a case, the obligation to submit an expert’s report would not be applicable. The regulations establish that the Member States are as a general rule territories of the EU.

The appellant stated that the Gibraltar’s constitution establishes that its foreign relations are the responsibility of a Member State. Specifically the United Kingdom. On the understanding that the provision established to be considered a territory of the EU would be fulfilled.

In the resolution the Registrar states that the company is invoking a foreign rule to prove its membership of the UE. Rule that under no circumstances has  been proved to be qualified by the registrar together with the transfer of registered office. A rule that does not have to be known by the registrar, since it is not an international treaty.

Under national regulations the registrar could have dispensed with the Report if he had sufficient knowledge of the foreign legislation in question. It is not the case here.

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Which requirements are established by the rules of the commercial register?

According to the rules of the commercial register, this will require a current legal history. In other words, a digital certificate of the current entries in the foreign registry of origin must be provided.

Likewise a deposit of accounts from the last completed financial year have to be provided. This deposit will be made both in the foreign registry and in the Spanish registry.

The resolution of the General Directorate of the Registry and Notaries (GDRN) dated June 25, 2018 refers to the latter requirement.

In this case, the transfer of a Panamanian company’s domicile to Spain is analyzed. The registrar verifies that the capital recorded in the accounts does not coincide with that registered in the registry.

Consequently, he qualifies the transfer as defective which is not exceptional. This determination has already been adopted by several resolutions of the GDRN. Denial of registration when the capital figures do not coincide.

Conclusions

Any foreign company may transfer its registered office to Spain, provided that its regulations of origin permit it. That is providing that the transfer does not involve the dissolution of the company in the country of incorporation.

Certain requirements must be met for the transfer to be effective. These requirements are more demanding when the company comes from a non-EU country:

• Compliance with Spanish regulations regarding the corporate form of the entity being transferred.
• Independent expert’s report for companies incorporated outside the EU. The report must justify that the company has sufficient assets to cover the capital required in Spain.
• Literal certification of the current records of the company in origin.
• Deposit of the accounts of the last financial year in the register of origin and in the Spanish register.

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Is it necessary to justify the transfer of registered office in order for such transfer to be approved?