Setting up a branch in Spain: key questions for foreign companies
When a foreign company wants to operate on a stable basis in Spain, one of the first decisions is choosing the appropriate structure: incorporating a
Transparency as to who ultimately stands behind a company has become an essential part of anti-money laundering policies. In Spain, this transparency is articulated, among other instruments, through the Register of Beneficial Ownership (RETIR) and the Central Register of Beneficial Ownership (RCTIR).
However, the obligation to identify and report the beneficial owner does not amount to general and unrestricted publicity of all corporate information. The issue requires distinguishing between beneficial owner, shareholder, registry information, personal data protection and access based on legitimate interest.
This matter is directly connected to corporate governance and corporate secretarial services, since the correct identification and update of beneficial ownership forms part of the orderly maintenance of a company’s corporate structure. It is also particularly relevant in processes for the incorporation of companies in Spain by foreign investors, investment transactions and corporate reorganisations.
RETIR is the Register of Beneficial Ownership, managed by the Spanish Association of Registrars, which is fed by beneficial ownership information held in the Commercial Registries. It is also one of the sources of information for the RCTIR.
The RCTIR, for its part, was created by Royal Decree 609/2023, of 11 July, with the aim of centralising information on the beneficial ownership of legal persons and certain entities or structures without legal personality.
In practice, both instruments should be understood within the Spanish system for identifying beneficial owners and complying with corporate obligations, especially in corporate processes, investment transactions and reviews of KYC and AML requirements.
For these purposes, it should be recalled that beneficial owner and shareholder are not equivalent concepts.
As a general rule, the beneficial owner is the natural person who ultimately owns or controls, directly or indirectly, more than 25% of the capital or voting rights of a company, or who exercises control by other means. Where no natural person meets these criteria, the regulations provide for the concept of an assimilated beneficial owner, which will generally be the company’s management body.
This distinction has important practical consequences. A company may have another legal entity as a shareholder and, nevertheless, there may be one or more natural persons who qualify as its beneficial owners because they indirectly control that shareholding.
Therefore, information on who is a shareholder of a company and who is its beneficial owner reflects two different legal realities. A shareholder may be a natural or legal person holding a formal interest, whereas the beneficial owner is always a natural person who ultimately holds or exercises control.
The regulations require companies subject to this obligation to obtain, keep and update information relating to their beneficial owners. The required data include name and surname, date of birth, country of residence, nationality, the criterion determining beneficial owner status and, in certain cases, the ownership percentage and the indirect ownership structure.
However, the fact that information must be communicated to a register does not mean that all such data automatically become available to anyone. The purpose of the register is to allow the identification of beneficial owners in the context of anti-money laundering and counter-terrorist financing, not to replace the general regime of commercial registry publicity or to make all shareholder information public.
The access regime depends on who requests the information and the purpose of the consultation. Competent authorities have particularly broad access for the exercise of their functions. In addition, obliged entities under anti-money laundering regulations may access the information necessary to comply with their due diligence obligations.
For other persons or organisations, by contrast, it will generally be necessary to prove a legitimate interest. This nuance became particularly relevant following the judgment of the Court of Justice of the European Union of 22 November 2022, which declared invalid the EU rules providing for general public access to beneficial ownership information. This issue is also addressed in our analysis of Directive 2024/1640 and the challenge of legitimate interest in beneficial ownership registers.
As a result, the access regime was reviewed and adapted under Spanish law. The current system seeks to reconcile two interests that may conflict: on the one hand, the transparency required to combat money laundering and, on the other, the right to protection of the personal data of the natural persons identified as beneficial owners.
One of the main sources of confusion lies precisely in the distinction between these two categories.
Information on shareholders and information on beneficial owners do not necessarily have the same publicity regime. The Commercial Registry may contain information on the corporate structure, directors and other registrable circumstances. However, this does not mean that any third party can obtain, through RETIR, complete information on a company’s shareholding structure.
The distinction is particularly relevant in complex corporate structures. For example, knowing that one company holds a stake in another does not necessarily make it possible to identify, without further analysis, the natural person who exercises ultimate control. This requires analysing the ownership chain and determining who meets the legal criteria for beneficial ownership.
Accordingly, the publicity of beneficial ownership should not be confused with general and unrestricted publicity of shareholdings.
The existence of registry publicity mechanisms does not exclude the application of data protection rules.
The RCTIR provides specific mechanisms to object to the processing of data or to request the exclusion of certain information, as well as procedures to report discrepancies and file the relevant appeals.
This does not mean that a beneficial owner may freely request the removal of their data from the register simply because they do not want it to be known. The retention and processing of this information respond to legal obligations linked to anti-money laundering. Any request for opposition or exclusion must therefore be analysed in light of the applicable rules and the specific circumstances.
For companies, the practical conclusion is clear: beneficial ownership must be correctly identified and kept up to date. The regulations require the information to be adequate, accurate and current, and assign specific responsibilities to the management body.
In addition, failure to update the information is not a merely formal issue. The RCTIR regime provides update mechanisms and certain registry consequences in the event of non-compliance, including the possibility of registry closure in the cases legally provided for.
Therefore, in the event of a change in the shareholding structure, an acquisition, a corporate reorganisation or any change in the chain of control, it is advisable to review the corporate composition, beneficial ownership and information recorded in the relevant registers together. This review may also be relevant in M&A transactions and investment processes, where UBO identification is a standard part of due diligence and KYC procedures.
From a practical perspective, companies should review at least the following issues:
In short, RETIR and RCTIR strengthen transparency regarding the beneficial ownership of companies, but they do not imply unrestricted access to information on shareholders and beneficial owners.
Proper management of this data requires distinguishing what information must be reported, where it is recorded and who may access it, while reconciling transparency obligations with personal data protection, corporate governance and legal risk management.
For companies, this obligation should be integrated into a periodic review of their control structure and corporate documentation. It is not merely a registry requirement, but a way to maintain a reliable and updated picture of who ultimately controls the entity.
RETIR is the Register of Beneficial Ownership managed by the Spanish Association of Registrars. It is fed by beneficial ownership information held in the Commercial Registries and is one of the sources of information for the RCTIR.
RCTIR is the Central Register of Beneficial Ownership, created to centralise information on the beneficial ownership of legal persons and certain entities or structures without legal personality.
No. A shareholder is the person or entity holding a formal interest in the company, whereas the beneficial owner is the natural person who owns or controls, directly or indirectly, more than 25% of the capital or voting rights, or who exercises control by other means.
Among other data, companies must keep and update name and surname, date of birth, country of residence, nationality, the criterion determining beneficial owner status and, in certain cases, the ownership percentage and indirect ownership structure.
Access depends on who requests the information and the purpose of the consultation. Competent authorities and entities obliged under anti-money laundering regulations have broader access, while other third parties must generally prove a legitimate interest.
Not necessarily. Publicity of beneficial ownership should not be confused with general and unrestricted publicity of shareholdings. Shareholder information and beneficial ownership information correspond to different legal realities.
The RCTIR provides mechanisms to object to data processing, request the exclusion of certain information, report discrepancies and file appeals. However, such requests must be analysed in accordance with the applicable rules and the specific circumstances.
In the event of a shareholding change, acquisition, corporate reorganisation or change in the chain of control, it is advisable to review the corporate composition, beneficial ownership and information recorded in the relevant registers.
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