COVID-19: the legal implications for businesses in Spain (as of 15 June 2020)

On 14 March 2020 the Spanish Government passed Royal Decree 463/2020 (‘the Royal Decree’), which declared a state of emergency to confront the health crisis caused by the coronavirus.

The aim of this Royal Decree is to protect the health and safety of citizens, contain the spread of the disease and strengthen the public health system. While the Royal Decree sets out a duration of 15 calendar days for the state of emergency, the Spanish Parliament has already approved six extensions for an additional 15 calendar days each. The Spanish Government has announced that the sixth extension is the last which means that the state of emergency will terminate at 00:00 21 June 2020.

The declaration of the state of emergency has brought with it extraordinary urgent measures aimed at dealing with the economic and social impact of COVID-19 in Spain.

These measures are primarily contained in Royal Decree-Law 8/2020, which entered into force on 18 March 2020, in Royal Decree-Law 11/2020, of 31 March, Royal Decree-Law 15/2020, of 21 April, and in Royal Decree-law 16/2020, of 28 April 2020 and cover different areas such as corporate, restructuring, insolvency, employment or tax matters. In addition, the Spanish Government has adopted additional legislation by means of, inter alia, Royal Decree-Law 9/2020, of 27 March aims to complement and clarify the rules of Royal Decree-Law 8/2020, Royal Decree-Law 10/2020, of 29 March, Royal Decree-law 18/2020, of 12 May mainly covering employment issues, Royal Decree-Law 14/2020, of 14 April, covering tax measures, Royal Decree-Law 19/2020, of 26 May and Royal Decree-Law 21/2020, of 9 June.

As the Spanish Government implements strategies to control the spread of COVID-19 and mitigate its social and economic impact, companies face an uncertain future.

We have published an in-depth briefing on the major legal implications of the COVID-19 pandemic for companies operating in Spain. It provides insights to help you understand the key issues for your business and covers the following eight areas:

Overview

Topics discussed in this briefing cover eight areas:

• Corporate: Measures to simplify the functioning of Spanish companies’ management bodies and shareholders’ meetings and to assure the functioning of the Commercial registry and the provision of notarial services.
• Regulatory and Foreign Investments: Full set of measures to control foreign investments in Spain, suspending deadlines in administrative proceedings across the public sector and concerning public procurement.
• Financial Support Measures: measures aimed at ensuring liquidity requirements to companies and self-employed workers , include the creation of guarantee scheme, an extraordinary credit budget for exporting companies and a moratorium on payments of loans granted by Autonomous Communities and Public Administrations.
• Restructuring and Insolvency: Amendments to the existing Spanish insolvency regime aiming to (i) enable companies that have become insolvent or are facing financial difficulties to continue business operations; (ii) encourage the financing of the debtor; and (iii) fast-track the insolvency proceedings.
• Real Estate: Measures providing for a moratorium on mortgage payments and rent payments, and concerning hotel closures, residential leases, and other matters.
• Data Protection: guidelines from the data protection authority regarding certain measures that may be adopted as a result of the crisis, in particular regarding the processing of health data.
• Employment: Measures aimed at providing flexibility with regard to workforce management during the health crisis and managing employment costs with a clear objective of promoting the maintenance of employment (through furlough/ suspensions) as opposed to redundancies.
• Tax: Measures mainly aimed at preventing lack of liquidity of small and medium-sized enterprises (SMEs) and self-employed workers and extending the deadlines of procedures with the Spanish tax administration.
• Dispute Resolution: Measures that affect dispute resolution procedures, including the suspension of procedural time limits (with limited exceptions), and the suspension of time running under the statute of limitations.
• Antitrust: Measures aimed at providing state support under state aid rules, resuming deadlines in administrative proceedings and providing some flexibility in the application of antitrust rules.

Download the full briefing (PDF).

As this is a fast-moving crisis, this briefing will be updated on an ongoing basis.

Additionally, to support your decision-making at this challenging time, we have also collected the best of our thinking on our coronavirus alert hub.

Please visit the site and tell us what you think. If there are important questions we haven’t answered, let us know.

 We hope that, by bringing together our teams, we can help you navigate whatever lies ahead for your Business.

Authors:

•  Armando Albarrán (global transactions: corporate)
•  Iñaki Gabilondo (global transactions: finance)
•  Fernando Soto (global transactions: real estate)
•  Silvia Paternain (tax)
•  Rafael Murillo (dispute resolution)
•  Raquel Flórez (people and reward)
•  Álvaro Iza (antitrust, competition and trade)