Driving digitization in the corporate environment

In a world where technology is advancing by leaps and bounds, digitization is becoming the driving force behind modernization and efficiency in all sectors. Especially, digitization in the corporate field opens doors to a future full of opportunities and offers a simplification in the bureaucratic processes related to the creation and management of companies.

At CECA MAGÁN we have closely followed the progress towards digitalization in the Spanish corporate sphere, having spoken on another occasion about Law 11/2023, which facilitated the online incorporation of limited liability companies, and marked the beginning of the digital transformation in corporate procedures. 

On this occasion, the real novelty on which we intend to focus is Royal Decree 442/2023. It will be approved in the coming months, expected in May, and will further pave the way towards a complete digitalization of corporate processes in Spain.

Both regulations have been adopted as tools for the transposition of Directive (EU) 2019/1151 of the European Parliament and of the Council of June 20, 2019, whose main objective is to digitize, simplify and streamline the procedures for the creation and management of companies. With them, the efficiency and modernization of the corporate environment in our country will be significantly boosted.

Taking into account the previous efforts of the European Commission to promote digitization and improve the competitiveness of companies in the digital single market, the transposition of the European Union (EU) Directive will bring us a little closer to achieving the interconnection of the commercial registries of the EU Member States, and thus facilitate digitization and interoperability.

- The keys to the digital revolution in companies

Imagine being able to set up branches of foreign companies in Spain with just a few clicks? Now, expanding your company across borders is easier than ever: forget about red tape and endless paperwork. This decree takes digitalization to another level by allowing the online submission of all necessary documentation for registrable acts.

In addition, in a digitalized world, there are several crucial aspects, such as transparency and information exchange. The implementation of Royal Decree 442/2023 will allow this and much more. We explain it below.

- Most relevant aspects for the digitization of the corporate environment

Royal Decree 442/2023, of June 13, will amend the Commercial Registry Regulations to partially adapt them to Directive (EU) 2019/1151, which promotes digitalization in the field of company law in the European Union.

As of its entry into force next May, it will impose the obligation for the Mercantile Registries to interconnect with the European central platform, in order to facilitate access to information on registered companies.

Creation of online branch offices under Royal Decree 442/2023

With this Royal Decree, corporate digitalization in Spain is promoted in a more intense way, by allowing the creation of branches in a completely digital way. This process, based on the simplification and streamlining of procedures, offers companies from other European Union member states the possibility of establishing branches in Spanish territory quickly and efficiently.

The process to create an online branch is clear and straightforward. Firstly, interested foreign companies can start the process from the comfort of their offices, using an electronic procedure similar to that used for the incorporation of limited liability companies. All required documents and information will be submitted in full through electronic platforms, thus eliminating the need for physical appearances before authorities.

The documentation required for the online creation of a branch office includes, among other documents, those proving the existence of the company and the establishment of the branch office, its domicile, the activities it will engage in, and the representatives it will have.

Once the complete documentation is submitted, the Commercial Registrar will be responsible for processing the application within a maximum of ten working days. This commitment to efficiency guarantees a fast and reliable response to applicants, allowing them to expand their operations securely and without the traditional obstacles associated with face-to-face procedures.

The European Unique Identifier (EUID) for corporations

The European Unique Identifier (EUID) allows the unequivocal identification of capital companies and branches of companies from other member states in the European Union. This identifier is composed of a country prefix (ES), the code of the Commercial Registry, the unique identifier of the company or branch, and a check digit.

From the entry into force of the Royal Decree, an EUID will be assigned to all companies that are registered or branches of existing companies that are established. This process will be mandatory in accordance with the provisions of Article 94 bis of the Mercantile Registry Regulations.

- Navigating into a digitized future

In short, Royal Decree 442/2023 will usher in a new era for Spanish companies, an era where digitalization will be the norm and innovation the currency. With measures that simplify procedures, encourage competitiveness and promote transparency, this decree paves the way towards a future where opportunities are endless and where the key word is "digitalization".

However, although the way processes are simplified, the procedures and planning for the creation and internationalization of companies still require experts who are familiar with the applicable legal framework. Our lawyers specializing in commercial and corporate law can help you. Contact them here.

Borja Pellejero

Lawyer in the commercial area