How to Relocate Your UK Company to Spain Post-Brexit

Following Brexit, the UK is now considered a third country and is no longer part of the European Single Market. For this reason, relocating your UK business to Spain is not as easy as it once was.

In this article, we dive into some of these key changes to help you navigate the process of setting up your business in Spain.

The Advantages of Business Relocation to the EU

The single market considers the EU as one region, in which goods and services can be traded freely, without internal borders or regulatory obstacles.

Doing business as a third country, however, means that customs documentation is required for goods moving between the UK and EU member states, which may lead to more inspections and increased time for shipments, along with higher costs.

Furthermore, as borders have become ‘hard borders’, travel delays are more likely.

The free movement of workers also no longer applies, which means the ‘terms of employment’ for EU nationals employed by a UK company will be subject to visa regulations.

All this considered, if you are a UK company doing regular business with the EU, then it may make more sense for your operation to be located in a member state.

What Does Spain Have to Offer?

Relocating a company’s registered office to Spain would mean access to the single market and all the associated benefits, as outlined above.

Additionally, Spain has one of the largest economies and investment markets in the EU, with comparatively low costs of doing business and a huge tourism sector. It is also a gateway to the Latin American market, as well as the 450 million people living in Europe.

Furthermore, there are incentives for entrepreneurs here, with Barcelona and Madrid as European hotspots for startups and tech. Not to mention the excellent weather and high quality of life.

The Process of Relocating Your Business

Article 94 of Spanish law 3/2009 relates to the transfer of a company’s registered office to Spanish territory. This article states that EU-based businesses have the right to relocate to another member state while maintaining the legal personality of the company.

Relocating your company from a third country is still possible, but the process is more complex. You must be able to justify that the company’s net worth covers the amount of capital stock required by Spanish law.

The company may not, however, maintain its legal personality in Spain unless the original country allows it. And since Brexit, there is no existing agreement that UK businesses can move their registered office to Spain and maintain their legal personality.

Therefore, moving a limited company to Spain from the UK would involve the liquidation of the company in the UK and the establishment of a new limited liability company in Spain, known as a Sociedad Limitada (SL).

Alternatively, you could open a Spanish branch, in which case the UK operation would maintain its legal personality. You could also open a subsidiary that would operate as a separate entity, with the capital invested by the UK-based business.

Relocating Employees to Spain

For more information on moving UK employees to Spain, check our article on the highly skilled professional visa.

Need Help?

Moving your business to Spain shouldn’t be any less appealing following Brexit. But it will most likely mean you need some help on the ground. If that’s the case, our team of specialists at Strong Law and Compliance is here to help.