Logo Guide to Business in Spain

7Other alternatives for operating in Spain

7.3. Economic Interest Groupings (EIGs)

  • Concept/purpose: EIGs are created with a view to facilitating the pursuit or enhancing the profitability of the activities of their members. EIGs may not act on behalf of their members nor may they substitute them in their operations. Consequently, the EIG is most commonly used to provide secondary services, such as centralized purchasing, sales, information management or administrative services, within the context of a broader association or group of companies.
  • Legal personality: One of the key differences between UTEs and EIGs is that EIGs are commercial entities with a separate legal personality.
  • Formation requirements: Spanish law sets out certain requirements for the formation of EIGs:
    • They may not interfere with their members’ decisions on personnel, finance or investment matters, nor are they allowed to manage or control the activities of their members.
    • They may not directly or indirectly hold stakes in their member companies, unless it is necessary to acquire shares or holdings in order to fulfill the EIG’s purpose, in which case the shares or holdings must be transferred immediately to its members.
    • They must be formed by notarial deed and registered at the competent Commercial Registry.
  • Member liability: EIG members are considered personally and jointly and severally liable for the entity’s debts, albeit secondarily to the EIG’s liability. Their main obligation is to contribute to the EIG’s capital on the agreed terms and to share in its expenses.
  • Governing bodies:
    • The members’ meeting.
    • The managers, who are jointly and severally liable with the EIG for all tax obligations accrued and for any damage caused, unless they are able to prove that they acted with due diligence.
  • Regulation: EIGs are mainly governed by Economic Interest Groupings Law 12/1991, of April 29.
  • European Economic Interest Grouping (EEIG): This has a separate legal identity, with the characteristics regulated by EU Council Regulation (EEC) 2137/85, which establishes the basic rules governing EEIGs.