¡Hola! If you are a business owner based in Spain but operating in the USA, you may already be familiar with the challenges of navigating compliance, legal, and beneficial ownership reporting requirements in a foreign country. From dealing with the Registro Mercantil to understanding the implications of the Ley de Sociedades de Capital, staying on top of these regulations can be overwhelming. In this blog, we will explore how to effectively manage these requirements and ensure that your business remains in good standing both in Spain and the USA. ¡Vamos a empezar!

Registration Requirements

The United States consists of 50 states and 5 territories, each with its own set of business regulations. To operate legally, businesses must adhere to both state-specific rules and federal laws.

State-Level Registration:

When establishing a business presence in the United States, businesses from Spain must complete state-level registration in any state where significant business activities occur. This requirement typically applies if your company:

• Has a physical presence in the state
• Frequently meets with clients in the state
• Derives a significant portion of revenue from the state
• Has employees working in the state

Incorporating your Spanish Company in the US

Even if none of the specific criteria apply, a Spanish company must still choose a home state for registration when conducting business in the US. This involves forming a U.S. entity, such as a corporation, LLC, or other business structure, in that state. This registration ensures that the company is officially recognized and compliant with US regulations, regardless of its level of business activity in any individual state.

The newly formed U.S. entity will operate as a subsidiary of the foreign company. This means that while the U.S. entity is legally independent, it remains under the ownership and control of the parent company based in Spain. This structure allows the company to conduct business in the US while maintaining its international headquarters.

We recommend using Northwest Registered Agent if your foreign company needs to incorporate. They offer expert guidance and can serve as a reliable registered agent for your business, ensuring compliance and smooth operations.

Federal Requirements

In addition to state requirements, Spanish companies must also comply with federal regulations:

• Federal Tax ID: Obtain an Employer Identification Number (EIN) from the IRS. This number is essential for tax reporting and opening U.S. bank accounts.
• Industry Regulations: Companies may need to follow specific federal regulations depending on the industry. For example:
• Import/Export Laws: If the company is involved in importing or exporting goods, it must meet U.S. customs regulations. This includes adhering to rules for tariffs, duties, and necessary documentation.

Beneficial Ownership Information Reporting Requirements

For Spanish businesses conducting operations in the U.S., adhering to Beneficial Ownership Information Reporting (BOIR) requirements is crucial. The Corporate Transparency Act mandates that companies disclose the individuals who own or control them. This applies to most entities, including those that are incorporated or registered in any U.S. state. The goal is to enhance transparency and combat illicit activities such as money laundering and terrorism financing.

A beneficial owner is an individual who controls the company or owns 25% or more of its shares, either directly or indirectly. For compliance with BOIR requirements, businesses must report information about these individuals, including their names, addresses, and identification details. Failure to file this report can result in significant penalties and legal consequences. Therefore, companies from Spain need to ensure they meet these reporting obligations promptly and accurately.

For your convenience, you can file your Beneficial Ownership Information Report directly on our website. Click here to complete the process in just a few minutes and ensure your business complies with U.S. regulations.

Additional Considerations for Spanish Businesses:

Tax Treaties

The tax treaty between the United States and Spain offers significant advantages for Spanish businesses operating in the USA. This agreement helps prevent double taxation and provides clarity on tax obligations for companies engaged in cross-border activities. By establishing clear guidelines for income taxation, the treaty promotes smoother business operations and reduces potential conflicts between the two countries’ tax authorities. For more detailed information about the specific provisions and benefits of the US-Spain tax treaty, click here to access official documents and resources provided by the IRS.

Trade Considerations

When conducting business with the USA, Spanish companies should be aware of the Transatlantic Trade and Investment Partnership (TTIP) negotiations, which aim to reduce trade barriers between the EU and the USA. While not yet finalized, this agreement could potentially impact tariffs, regulations, and market access. Additionally, Spanish businesses must comply with US import regulations, including those set by the Food and Drug Administration (FDA) for food and beverages, and the Consumer Product Safety Commission (CPSC) for consumer goods. It’s crucial to stay informed about any industry-specific regulations, such as those related to agriculture, pharmaceuticals, or technology. Spanish companies should also familiarize themselves with US customs procedures and documentation requirements to ensure smooth import processes. Consulting with trade experts or utilizing resources provided by the Spanish Chamber of Commerce in the USA can help navigate these complexities and stay updated on any changes in trade agreements or regulations.

Your Path to Compliance: Key Takeaways for Spanish Businesses in the U.S.

Operating a Spanish business within the USA requires careful attention to legal obligations, from establishing your home state to incorporating and filing a beneficial ownership report. Meeting these requirements is essential for ensuring compliance and securing your business’s success in the American market. By understanding and adhering to these steps, you can confidently navigate the complexities of doing business in the U.S. and focus on growing your enterprise.

Ready to get started? Click here to file your BOIR in just a few short minutes. We make the process easy, fast, and secure so you can focus on what matters—your business.