This newsletter provides a selection of regulatory news and comments from our SPANISH legal experts on interesting policy developments, recent case law, and new regulatory directions of major industry practices. The aim is to provide an up-to-date tool for quick and easy consultation on the most current and important topics at a SPANISH level.

1. Legal news on foreign investments

On September 1, 2023, Royal Decree 571/2023, of July 4, concerning foreign investments (the "Royal Decree"), came into effect, repealing Royal Decree 664/1999 and further developing the provisions of Law 19/2003, of July 4, on the legal framework for capital movements and economic transactions with foreign countries (the "Law 19/2003").

The Royal Decree establishes mechanisms for controlling foreign investments. Articles 14 to 17 of the Royal Decree introduce a prior administrative authorization regime for certain foreign investments, particularly in strategic sectors of Spain. This control is grounded in Article 7 bis of Law 19/2003.

The Royal Decree also introduces new provisions regarding intragroup financing. This refers to loans or capital injections between companies within the same corporate group when one of the parties is foreign.

1.1 Requirements and obligations

The concept of investment has been expanded as follows:

• Foreign investments in Spain: When a foreign company finances a Spanish entity or branch.
• Spanish investments abroad: When a Spanish company finances a nonresident company within the same group.

Declaration Requirements:

1. Amount exceeding €1,000,000.
2. Amortization period exceeding one calendar year.

Declaration Obligation:

Intragroup financing transactions meeting the aforementioned criteria must be declared to the Investment Registry of the Ministry of Economy, Trade, and Industry.

Who is responsible for the declaration?

• The non-resident company if it finances a Spanish entity.
• The resident company if it finances a foreign entity.

2. New technical and functional specifications for electronic billing systems

Order HAC/1177/2024, published in the Official State Gazette (BOE), sets forth the technical, functional, and content specifications that electronic and computer systems used for billing by entrepreneurs and professionals must comply with. Its primary objective is to ensure that these systems adhere to the security and transparency standards established in Royal Decree 1007/2023 and Royal Decree 1619/2012.

2.1 Main objective of the Order

The goal is to prevent electronic systems from enabling the manipulation or concealment of accounting, billing, or management data, ensuring that records are:

• Intact: Without unauthorized modifications.
• Preserved: Accessible for consultation.
• Readable: In standard formats that can be interpreted by the Administration.
• Traceable: With the ability to track the history of each record.
• Unaltered: Free from interpolations or undocumented omissions.

2.2 New tax obligations and legal context

The electronic systems must guarantee these characteristics and be duly certified. Invoices generated will include a QR code and, in some cases, a phrase identifying their validity.

This order is based on the new formal tax obligation set forth in Article 29.2.j) of the General Tax Law, which requires manufacturers, marketers, and users of these systems to comply with the necessary security and functionality requirements.

In summary, this order regulates and standardizes billing systems to prevent tax fraud and improve data control by the Administration.

This newsletter provides a selection of regulatory news and comments from our SPANISH legal experts on interesting policy developments, recent case law, and new regulatory directions of major industry practices. The aim is to provide an up-to-date tool for quick and easy consultation on the most current and important topics at a SPANISH level.

What is the Golden Visa?

The Golden Visa is a residence permit granted to non-EU citizens who make a real estate investment in Spain. This permit offers the opportunity to live and work in the country, providing a fast and efficient way to obtain legal residency.

Benefits

• It is the fastest method for obtaining residency.
• It greatly facilitates real estate investment and the ability to start businesses in Spain.
• With the Golden Visa, you can travel within the Schengen Area as easily as European Union citizens.
• The direct relatives of the Golden Visa holder can also obtain residency quickly.
  Requirements for obtaining it
  The conditions for obtaining the Golden Visa vary depending on the type of investment made by the applicant.
  For real estate investments, it is granted to those who purchase property worth 500,000 or more euros.

For capital investments, a minimum of one million euros must be invested in investment funds, venture capital funds, bank deposits, or shares in a Spanish company. The Golden Visa will also be granted to those who undertake business projects that generate employment, have a significant socio-economic impact, or involve scientific advances.
Lastly, those who invest more than two million euros in Spanish government bonds will also be eligible to apply for the Golden Visa.

The acquisition process

The process for obtaining the Golden Visa is simple and easy to follow. and can be completed by following these steps:

1. All necessary documents, such as proof of investment, passport, and criminal record certificate, must be gathered.
2. The application must be submitted to the apporpiate spanish agency.
3. The Spanish authorities will review the provided documentation and, if the requirements are met, grant the Golden Visa.

When will the Golden Visa be eliminated?

The Spanish government believes that foreign investment hinders residents’ access to housing. Therefore, in order to “guarantee the right to decent and affordable housing,” it plans to eliminate the Golden Visa. However, there is currently no set date for this proposal. For this reason, we suggest that those interested in acquiring residency proceed with the application process as soon as possible.

On 12 August, Regulation (EU) 2024/2019 of the European Parliament and of the Council of 11 April 2024 (the “Regulation”) was published in the Official Journal of the European Union, introducing several substantive and/or procedural amendments to Protocol no. 3 on the Statute of the Court of Justice of the European Union (the “Statute” and “Court of Justice”).

Below is a summary of the amendments introduced by the Regulation.

1. Granting of preliminary ruling jurisdiction in specific matters to the General Court

The Regulation introduces Article 50-ter conferring jurisdiction on the General Court of the European Union (the “General Court”) to hear and make references for a preliminary ruling under Article 267 of the TFEU falling within one or more of the following matters:

1. the common system of value added tax;
2. excise duties;
3. the Customs Code;
4. the tariff classification of goods in the Combined Nomenclature;
5. compensation and assistance to passengers in the event of denied boarding or delay or cancellation of transport services; and
6. the greenhouse gas emission allowance trading scheme.

Regarding points (a) to (d), Recital 9 of the Regulation clarifies that “Those area cover, at the time of the adoption of this Regulation, matters such as the determination of the tax base for the assessment of value added tax or the conditions for exemption from payment of that tax; the interpretation of the general arrangements for excise duty and of the framework relating to duties on alcohol, alcoholic beverages, tobacco, energy products and electricity; the elements on the basis of which import or export duties are applied in the context of trade in goods, such as the Common Customs Tariff, the origin and customs value of goods; import and export procedures, including the incurrence, determination and extinction of a customs debt; specific customs arrangements; the system of relief from customs duties as well as the interpretation of specific tariff headings and the criteria for the classification of certain goods in the Combined Nomenclature laid down in Annex I to Council Regulation (EEC) No. 2658/87”.

With reference to point (e), recital 10 of the Regulation clarifies that these matters “cover matters that are at the time of the adoption of this Regulation regulated by Regulations (EC) No. 261/2004 [air transport], (EU) No. 1177/2010 [maritime transport], (EU) No. 181/2011 [bus and coach transport] and (EU) 2021/782 [rail transport] of the European Parliament and of the Council”.

With reference to point (f), recital 10 of the Regulation clarifies that this scheme “at the time of the adoption of this Regulation is regulated by Directive 2003/87/EC of the European Parliament and of the Council and by the acts adopted on the basis of that Directive”.

Notwithstanding the foregoing, pursuant to paragraph 2 of the new Article 50-ter, the Court of Justice will retain jurisdiction to hear and make references for preliminary rulings raising “independent questions concerning the interpretation of primary law, public international law, general principles of law or the Charter of Fundamental Rights of the European Union”.

Furthermore, under paragraph 3 of the new provision, references for preliminary rulings under Article 267 must be made to the Court of Justice. The Court – “as soon as possible” and in accordance with the procedures laid down in its Rules of Procedure – will then determine whether the request falls exclusively within the matters under the General Court’s jurisdiction and, if so, will transfer the case to the General Court.

• Participation in the proceedings by the European Parliament, the Council and the European Central Bank

The Regulation amends Article 23 of the Statute to stipulate that, where a matter is referred for a preliminary ruling, the decision of the national court or tribunal to stay the proceedings must be notified by the Registry of the Court. This notification must be made not only to the parties involved, the Member States, the Commission and the Union institution or body or entity that adopted the act whose validity or interpretation is being challenged, as already provided for in Article 23 – but also to the European Parliament, the Council and the European Central Bank.

Under the newly added paragraph 2, if the European Parliament, the Council and the European Central Bank consider that they have “a particular interest in the questions raised by the reference for a preliminary ruling”, they may submit statements of case or written observations within two months of receiving the notification.

Under the new paragraph 3, pleadings or written observations submitted by an interested party will be published on the website of the Court of Justice “within a reasonable time” after the case is closed, unless that interested party objects to the publication of its pleadings or written observations.

• Election of Advocates General to handle references for preliminary rulings assigned to the General Court

The Regulation introduce Article 49-bis of the Statute, establishing that, in the handling of references for a preliminary ruling, the General Court shall be assisted by one or more Advocates General, elected for a term of 3 years – with the possibility of one renewal - from among the Judges of the General Court.

• Establishment of the Intermediate Chamber of the General Court

The Regulation amends Article 50 of the Statute to introduce, with reference to the composition of the General Court, an intermediate chamber positioned between the chambers composed of five judges and the Grand Chamber.

According to the wording of the new Article 50, the General Court may convene in: (a) chambers of three or five judges; (b) an intermediate chamber; and (c) the grand chamber. In addition, consistent with the existing provisions, the General Court may in some cases make decisions by a single judge.

The new provision provides that, in proceedings relating to a matter referred for a preliminary ruling, the General Court will convene in an intermediate chamber at the request of a Member State or an institution of the Union involved in the case.

• Referral of cases to the Court of Justice or the General Court for preliminary rulings

The Regulation amend Article 50 of the Statute to establish, in line with the provisions regarding the handling of cases:

• if the General Court determines that it lacks jurisdiction to hear a reference for a preliminary ruling, it shall refer the case to the Court of Justice;
• if the Court of Justice finds that it lacks jurisdiction to hear a reference for a preliminary ruling, it must refer the case back to the General Court, which cannot refuse jurisdiction in such instances.

In connection with the above-mentioned referral mechanism, recital 18 of the Rules of Procedure further clarifies that “the General Court may, pursuant to Article 256(3), second subparagraph, TFEU, refer to the Court of Justice a case that falls within its jurisdiction but requires a decision of principle likely to affect the unity or consistency of Union law”.

• Expansion of the procedure for the prior admission of appeals

The Regulation revises Article 58a to broaden the scope of the procedure for prior admission of appeals by the Court of Justice. This expansion includes:

• appeals against a decision of the General Court regarding the decision of an independent Board of Appeals of a body or entity of the Union which, as of 1 May 2019, had such a Board of Appeals but was not expressly covered by the previous version of Article 58a.

These Union bodies/entities include: (a) the European Union Agency for the Cooperation of Energy Regulators; (b) the Single Resolution Board; (c) the European Banking Authority; (d) the European Securities and Markets Authority; (e) the European Insurance and Occupational Pensions Authority; and (f) the European Union Railway Agency; and

• litigation concerning the enforcement of contracts containing an arbitration clause.

• Introduction of the consultation procedure for applications or proposals to amend the Statutes

The Regulation introduces Article 62-quinquies which mandates that before submitting an application or a proposal to amend the Statute, the Court of Justice or, where appropriate, the Commission must first conduct “extensive consultations”.

*

The Regulation will enter into force on 1 September 2024 and includes a transitional arrangement as follows:

- any references for preliminary rulings pending before the Court of Justice on 1 October 2024 will in any event continue to be handled by the Court of Justice itself;

- appeals concerning:

(i) decisions of the General Court relating to a decision of a Board of Appeals of one of the bodies/entities of the Union listed in points (a) to (e) of paragraph 6 above; and

(ii) decisions concerning the enforcement of a contract containing an arbitration clause

that are before the Court of Justice on 1 September 2024 shall not be subject to the aforementioned procedure of prior admission of appeals.