SPAIN Law and Practice Contributed by: Miguel Cases, Toni Barios, Joaquín Fabré and David Navarro, Cases & Lacambra
hold on account of the non-resident the correspond- ing tax through the filing of tax forms 216 and 296.
a general rule, security interest should only secure one main obligation. Depending on the class of asset on which security is to be created, a specific instru- ment and formalities for its validity and perfection are required. Generally, for any asset to be eligible as col- lateral, it needs to be situated in Spain, or the originat- ing agreement for credit rights should be governed by Spanish law. Some regional laws in Spain might have specific rules for assets in those areas. The most com- mon type of security comes in the form of mortgages and pledges with or without transfer of possession. The chosen form of security relies on the nature of the asset being secured, those being the following. Mortgages Mortgages are used for real estate and moveable assets. They need to be documented in a public deed ( escritura pública ) and registered in the applicable public registry for their perfection. A stamp duty, usu- ally between 0.5% and 2% of the secured amount, depending on the region of Spain where the asset is located, is generally applicable to the mortgage deed. Some of the most relevant assets given as security by means of a mortgage are the following. • Real estate assets – mortgages over real estate are given as collateral in transactions where the real estate property is a key element of the company or business. This is avoided when the company has other key assets, as otherwise it gets an expensive security interest as it attracts stamp duty at a rel- evant amount. The public deed ( escritura pública ) of mortgage needs to be presented and registered in the relevant Land Registry where the property is located. Despite the general rule mentioned above, floating mortgages securing multiple liabilities (not multiple assets) are available under Spanish law if the secured parties are financial institutions. • Intellectual and industrial property rights – this covers assets such as patents, trade marks, trade names, industrial designs, software, literary or artistic works, etc. In any case, intangible assets must be registered in the Intellectual Property Reg- istry. The mortgage on industrial property extends to developments or improvements in registered rights; however, in the case of intellectual property assets, the guarantee does not cover their adapta- tions, transformations, translations, etc.
5. Guarantees and Security 5.1 Assets and Forms of Security General Overview
Under Spanish law, various instruments are available to establish valid and enforceable security. However, Spanish law does not recognise the all-assets secu- rity concept. Security can take the form of personal guarantees or in rem security over specific assets. In rem security interest must be granted over identified or identifiable assets, which need to be specified or specifiable in the security document. Security interest and guarantees under Spanish law are ancillary to the main obligation it secures; thus, the nullity or termination of the main obligations implies the nullity or termination of the security interest or Guarantees entitle the beneficiary to make claims against all the borrower’s assets. Typically, these are structured as first-demand guarantees rather than personal guarantees or fianzas . Such guarantees operate independently from the primary obligation, allowing the borrower to request payment from the guarantor under most circumstances, even if the main obligation has not been breached. Under first-demand guarantees, the guarantor does not have the privi- leges of excussion ( excusión ), division ( división ) and order ( orden ), as foreseen for fianzas . The benefit of excussion refers to the right of the guarantor to require that, before proceeding against them, the principal debtor’s assets are pursued first. Division is a benefit by which, if there is more than one guarantor, each one is only responsible for their proportional part of the debt or the commitment undertaken. Finally, the benefit of order refers to the right of the guarantor to determine the order in which the debtor’s assets must be liquidated to satisfy the debt. In Rem Security Interest Spanish law mandates that security interests be individually established for each asset. Likewise, as guarantees. Guarantees
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