Cross-border mergers and acquisitions (M&A) have experienced significant growth in recent decades, driven by the quest for opportunities beyond national borders.
In this context, Spain and Belgium are among the European economies actively involved in such operations. However, cross-border M&A transactions present certain legal challenges that must be addressed to ensure the success of the transaction and the protection of the interests of the parties involved.
Legal framework in Spain and Belgium
In Spain, mergers and acquisitions are mainly regulated by the capital companies act and the commercial code, along with additional provisions in tax and labor matters. On the other hand, in Belgium, the Belgian companies act and the commercial code are the main legal frameworks governing these operations, supplemented by specific regulations in areas such as competition, employment, and taxation.
Tax and fiscal aspects
The tax implications of a cross-border transaction can be complex and must be carefully addressed to optimize tax efficiency and comply with legal obligations in both the countries. This includes considerations regarding corporate taxes, international tax treaties, and the treatment of capital gains.
It is necessary to assess the double taxation treaties between Spain and Belgium to determine the taxation applicable to the transaction, especially concerning income taxes, dividends, interests, and royalties. Likewise, it is necessary to review the implications of VAT in the transaction, especially regarding the transfer of assets and services between Spanish and Belgian companies, as well as possible applicable special regimes.
In such cases, it is ideal to design an efficient structure, taking into account the differences in tax laws and bilateral treaties between Spain and Belgium.
Competition regulation
Detailed competition analyses must be conducted to assess the potential impact of the transaction on relevant markets in Spain, Belgium, and at the European level. This involves identifying the relevant market and the consequences in terms of prices, quality, and innovation in accordance with the Treaty on the Functioning of the European Union (TFEU), CJEU case law, and national legislation.
Based on the specific analysis, options for divestment, adjustments in the transaction structure, or changes to address competition regulations may be considered.
Data protection and privacy (GDPR)
Compliance with data protection laws, such as the General Data Protection Regulation (GDPR) of the European Union, is fundamental in cross-border M&A to avoid legal risks and protect data privacy.
Under the GDPR, conditions for the M&A, contractual clauses, and approval from data protection authorities must be evaluated.
Conducting thorough due diligence encompassing the mentioned aspects to identify and assess risks related to regulatory compliance, security breaches, and other issues that may affect the transaction is paramount.
At Navas & Cusí, we specialize in Commercial and International Law, providing comprehensive legal counsel and expertise to guide clients through every aspect of cross-border M&A transactions.
Our team is dedicated to assisting clients at every stage of the process, helping them achieve their objectives efficiently and effectively in the marketplace.
