Acquiring a Company in Spain: Anticipating the Legal, Tax, and Strategic Challenges of a Cross-Border Transaction

It is recommended to consult experts with a cross-border perspective to obtain advice on cross-border acquisition structures. Choosing the investment vehicle is an important preliminary step, which can be a French vehicle, a vehicle created in Spain (a dedicated subsidiary), or even an investment vehicle established in a third country.

The financing of the acquisition must also be examined in terms of its origin and nature (country, bank debt, third-party investors, or equity). The domestic tax laws of both countries must be considered, particularly the limitations affecting the tax deductibility of financial expenses.

Parent-subsidiary tax regimes exist in France and Spain that can have implications for dividend distributions and capital gains on the sale of equity interests. However, it is important to note that Spanish tax law excludes capital gains on the sale of shares held in companies classified as "holding companies."

The management and operation of the future Spanish subsidiary is crucial, as it impacts the taxation of dividends and future capital gains. Regarding the acquisition itself, the acquisition agreement can be drafted according to the chosen legal framework, but the transfer must be executed in authentic form before a Spanish notary.

It is important to consider all these issues before embarking on an acquisition in Spain. The choice of investment vehicle, financing, tax regulations, subsidiary management, and legal aspects must all be carefully examined to ensure the success of the operation.