Introduction
Spain—the euro-zone’s fourth-largest economy—serves as both a gateway to the EU and a natural bridge to Latin America. For that reason, joint ventures (JVs) have become the preferred landing strategy for many multinationals and scale-ups that want to enter the Spanish market while sharing risk, resources and upside with a local partner. They are equally attractive for Spanish companies seeking to join forces with global groups to tackle major projects or break into new sectors.
In today’s world of internationalisation, digital transformation and fierce competition, knowing how a JV really works in Spain is critical. This guide walks you through every step—choosing the legal form, drafting the shareholders’ agreement, handling regulatory clearances, and managing tax, compliance and operational risks—so your alliance starts on solid ground and avoids future disputes.
What Exactly Is a Joint Venture—and Why Is It So Appealing?
A joint venture is a collaboration in which two or more companies pool assets, technology or expertise to carry out a project or ongoing business activity. The alliance may be temporary or open-ended and may involve setting up a stand-alone entity or simply signing a contractual cooperation agreement.
For a foreign company, a JV offers instant local insight, government contacts and licences, while the Spanish partner gains fresh capital, international networks or a powerful brand. JVs accelerate market entry, spread risk and unlock synergies without the cost and complexity of a full acquisition or merger.
Legal Structures Available for a JV in Spain
Your first strategic decision is which legal vehicle to use—each has distinct implications:
1. Forming a New Joint Venture Company
The common route is to create a brand-new company with both parties as shareholders, typically a private limited company (Sociedad Limitada, S.L.) or, for larger operations, a public limited company (Sociedad Anónima, S.A.). This provides a separate legal personality, limited liability and a clear governance framework. It does require notarised articles of association, registration with the Mercantile Registry, and ongoing accounting and tax filings, but it signals long-term commitment and keeps the JV’s assets ring-fenced from the parent companies.
2. Setting Up an Economic Interest Grouping (Agrupación de Interés Económico, AIE)
An AIE is a not-for-profit entity designed to boost or streamline the members’ own activities—perfect for sharing services or R&D programmes. Profits (or losses) flow directly to the members under a transparency regime.
3. Creating a Temporary Business Union (Unión Temporal de Empresas, UTE)
Popular in construction and public-tender projects, a UTE has no separate legal personality and exists purely for one contract or project. Once the job ends, the UTE dissolves. It is quick and flexible—but the member companies are jointly and severally liable.
4. Purely Contractual Collaboration
Alternatively, the parties can sign a detailed cooperation contract without forming any new entity. This is cheaper and fast to launch, yet riskier if liability, profit-sharing, IP ownership or exit terms are not meticulously regulated. It suits short-term or limited-scope ventures.
The Shareholders’ Agreement—Heart of the Deal
Whatever structure you choose, the shareholders’ agreement (also called the JV agreement) is the key success factor. It should spell out:
Each partner’s contributions—cash, assets, technology, personnel.
Decision-making rules, voting thresholds and any veto rights.
Deadlock-resolution mechanisms if partners disagree.
Profit- and loss-sharing arrangements.
Transfer restrictions: who can sell, when, and to whom.
Exit routes and valuation formulas—buy-sell options, drag-along, tag-along.
Non-compete, exclusivity and confidentiality clauses.
Applicable law and dispute-resolution forum (arbitration often preferred).
A well-crafted agreement prevents misunderstandings and keeps the partners aligned when pressure mounts.
Regulatory Hurdles You Need to Clear
Competition (Antitrust) Notification
If the JV qualifies as an economic concentration—because it will operate autonomously and durably—Spanish merger-control rules may require filing with the National Markets and Competition Commission (CNMC). Trigger thresholds include:
The new group capturing more than 30 % of any Spanish market or
Combined turnover above €240 million in Spain, with at least two parties posting individual Spanish sales over €60 million.
The CNMC review can last one to three months; build this into your closing timetable.
Foreign Direct Investment (FDI) Screening
Since Royal Decree 571/2023, non-EU/EFTA investors buying 10 % or more of a Spanish company—or acquiring control—must obtain prior approval when the target operates in “strategic sectors” such as defence, AI, energy or critical data. Many technology-heavy JVs trigger this screening; factor in a one-to-three-month approval window.
Tax Treatment of Different JV Vehicles
JV Companies (S.L./S.A.) pay Spanish Corporate Income Tax at 25 % (15 % for the first two profitable years) and can claim R&D and Patent-Box incentives.
AIEs and UTEs enjoy fiscal transparency—profits or losses are allocated directly to each member, who applies them in their own tax returns.
Contractual Alliances: each party reports its share of income and expenses. Multijurisdictional accounting can be complex; bilateral tax treaties and withholding-tax relief must be checked so dividends and royalties move efficiently cross-border.
Common JV Risks—and How to Tackle Them
Strategic misalignment: Conduct robust due diligence and agree shared KPIs before signing.
Unequal contributions: Document each input clearly and—where appropriate—use escrow or earn-in mechanisms.
Decision deadlock: Build “Russian Roulette” or “Texas Shoot-Out” clauses into the agreement.
IP leakage: Register key intellectual property beforehand and license it on conditional terms.
Contentious exits: Pre-set valuation formulas and buy-sell options to avoid court battles.
Proactive planning saves time, money and relationships.
Why Compliance Matters in a JV
Spanish corporations have been criminally liable for certain offences since 2015. In a joint venture, misconduct by one partner can expose the entire venture—and its shareholders—to fines, public-contract bans or even dissolution. Implementing a criminal-compliance programme aligned with the 2025 edition of UNE 19601 is now the gold standard. Key steps include:
A customised criminal-risk map (bribery, fraud, anti-competition, environmental, labour safety).
Whistleblowing channels compliant with Act 2/2023 on whistle-blower protection.
Annual audits and documented monitoring.
Strong compliance not only mitigates legal exposure but also enhances the JV’s reputation with regulators, lenders and customers.
The 90-Day Fast-Track Checklist
Define the business case and joint KPIs.
Perform mutual legal, fiscal and workplace due diligence.
Pick the optimal structure (company, AIE, UTE or contract).
Draft and sign a binding term-sheet.
Identify all required regulatory clearances (CNMC, FDI, sector-specific).
Negotiate and finalise the shareholders’ agreement and articles.
Incorporate and register the entity before a notary and the Mercantile Registry.
Roll out a UNE 19601 compliance model.
Secure IP registrations and licences.
Launch operations and hold quarterly steering-committee meetings.
Conclusion—Success Lies in the Details
A well-structured joint venture is an excellent door into the Spanish market, but its success depends on rigorous legal drafting, sound tax planning and transparent partner governance. Dr. Frühbeck Abogados has spent decades guiding Spanish and international businesses through the birth, life and dissolution of joint ventures in sectors ranging from energy and distribution to tech and healthcare.
If you’re considering a strategic alliance in Spain, engage our team from day one. We will craft your legal and fiscal roadmap, draft the shareholders’ agreement and support you throughout negotiations and implementation.
Ready to explore your JV? Book an initial consultation with our Commercial & Company Law specialists and receive a tailor-made action plan within 48 hours.