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How to open companies in Spain and move the staff?

Business Law
How to open companies in Spain and move the staff?

The internationalization process of a company requires specialized advice from corporate lawyers both in the State of origin and in the State of destination. As we will see below, there are very diverse factors that come into play when a company wants to open work centers in Spain and displace its workforce.

Let our presentation serve as an example, since the considerations of International Law that come into play make it essential to study each case in detail and prepare for the expansion of the company in advance.

The opening of the work center in Spain

 Regarding the internationalization of the company, we spoke a few days ago in our article about bringing companies to Spain, to which we refer the reader. In it we made a quick review of the legal figures to which the company can resort to settle in our territory. 

Depending on the legal entity chosen, the company will have to carry out one or other constitution or registration procedures. For example, representative offices require few formalities, due to their low degree of integration, while the opening of a subsidiary will require the processing of a process similar to that of the incorporation of a Spanish company.

When choosing the appropriate legal form and addressing the registration and / or constitution procedures, we cannot but recommend that the company have a specialist lawyer in Corporate Law in the destination territory.

In addition, we must remember that regardless of the chosen legal figure and its constitution, action and tax regime, the company will have to request its own Contribution Account Code if it is going to associate its staff with the Spanish Social Security. Question to which we will dedicate another article in the future.

In summary, opening a work center in Spain may require constitution and registration procedures (carried out before the Notary Public and the corresponding Public Registries), tax (carried out before the AEAT) and Social Security. 

But today we want to focus on the Human Resources aspect, specifically on how to move the workforce to Spain.

Staff posting within the European Union 

Directive (EU) 2018/957 on posting of workers allows companies to temporarily post their employees when:

1.- They have service contracts with recipients that operate in other Member States.

2.- They want to move the staff to a center of their own or of the same group based in another Member State.

3.- Or when it comes to temporary work companies or employment agencies.

This harmonization facilitates the mobility of the workforce within the European Union, guaranteeing one of the main purposes of the organization, which is the freedom to provide services. However, the company will have to comply with some formalities before and after posting its staff.

Who is considered a posted worker?

It should be clarified that people who travel professionally but do not provide services are not considered posted workers. For example, we find ourselves in this situation on business trips, fairs or conferences.

However, professional travel (which is how this type of mobility is called) must also be reported to the Social Security of the State of origin. 

Procedure prior to transfer of the template

Before posting the staff to a Member State of the European Union, their authorities will request a declaration that includes the following elements.

1.- In the first place, the identification of the service provider, as well as the posted workers and the liaison and contact persons. The liaison person will act as a link between the service provider and the destination State, while the contact person will link the former with the social partners of the destination State.

2.- Secondly, the foreseeable duration of the posting. Bear in mind that some of the provisions of Directive (EU) 2018/957 are only applicable to long-term trips, which are those that are extended beyond 12 months (or 18, in some cases). In addition, when the posting exceeds 24 months, it will no longer be covered by the Social Security legislation of your State of origin.

3.- The nature of the services to be provided and the address or addresses of the work centers where such services are to be carried out must also be communicated.

Legal regime during posting

Once transferred, the workforce will comply with most of the labor regulations of the destination State. Among them, those referring to the working day, rest and vacations, salary, hygiene and occupational health ...

This implies, for example, that when determining the salary of posted workers, the minimum guaranteed by the legislation and collective bargaining of the host State must be respected. And the same is applicable in general for the rest of labor rights.

Remember, however, that some of the rules applicable to travel will continue to be those of the sending country. For example, this applies to travel, accommodation and living expenses.

Lastly, the host States may require that at the end of the posting, the company submits documentation such as the employment contract, payroll, time records, etc., in compliance with their labor or social protection legislation.

Displacement from outside the European Union

As we have seen, the European Union promotes the freedom to provide services. Therefore, we are facing a regime favorable to labor mobility, which will allow us to transfer the workforce without too many complications. 

But bringing in employees from outside the European Union can be much more complex. In the first place, we must bear in mind that not all the States of origin accept the same legal regime, since there are International Conventions that can facilitate the mobility of workers. On the other hand, we must consider what kind of activity is going to be developed and what are the profiles used to carry it out.

Differences regarding the country of origin

First, we must consider the existence of International Agreements or Bilateral Agreements. These can affect issues such as the legalization of documents or the applicable Social Security regime.

The relations between the State of origin and destination will also determine the requirements to obtain a residence and work authorization, to be nationalized and even to determine the legal regime applicable to the posted worker.

Due to the length of this article, we cannot delve further into this matter, so we must recommend that you consult with a lawyer specialized in Corporate Law from the country of origin before starting the internationalization process.

Differences regarding the activity to be carried out

The nature of the activity to be carried out by the company also affects the procedures to be carried out. For example, in Spain it will be required to attend to the national employment situation before authorizing the residence and work of a foreign person.

However, this requirement will wane when we are in front of workers who are going to fill positions of trust, before company managers or highly qualified professionals or on the staff of companies or groups of companies located in other countries.

The origin of the workers also affects the application for this permit (there is a privileged regime for citizens of Chile and Peru, for example) or the fact that they are dedicated to investment or are artists of recognized prestige.

Ultimately, a lawyer from the State of destination should study the regime to which the activity to be carried out is subject and the qualifications of the persons to be posted. Thus, it will be easier to move to Spain members who are already part of the company's staff or play highly specialized roles than other workers.

Special rules on posting

Finally, it should be remembered that the States of origin may have labor regulations to take into account before taking the workforce abroad. Thus, in Spain, workers are allowed to terminate their employment relationship if they intend to transfer them for more than 12 months in a reference period of three years (art. 40 Workers' Statute). 

In the event of a transfer for a shorter time, we would be facing a displacement, which grants the right to permits, compensation and other protection rights to the affected persons.

Therefore, the opening of work centers in Spain and the consequent mobility of the workforce requires the specific advice of national lawyers. Contact us, and our lawyers specializing in business law will study your specific case. We Have:

Law firm in Barcelona
Law firm in Madrid
Law firm in Reus