The Flight Of Catalonia’s Companies: Over 2,770 Change Their HQ, About 1,000 Fiscal Residence

banco sabadell palmeras

From October 2 to November 24, 2.773 companies have transferred their headquarters (HQ) from Catalonia to other regions in Spain, according to figures from the College of Mercantile Registers in Spain.

That said, over the last few weeks the trend in companies leaving Catalonia has been on the decline, in line with declarations made by Prime Minister Mariano Rajoy. On several occasions, he has requested that firms remain in the region, after the institutional normalisation facilitated by the implementation of article 155 of the Constitution and the call for elections in the region on December 21.
Furthermore, in some areas talk has started about the so-called “return”, referring to the possibility of those companies which fled Catalonia coming back to their roots. Catalan employers are asking Mariano Rajoy to offer some “incentives” in order to begin this process. The government’s reply came from Economy Minister, Luis de Guindos. He said Catalonia has enough to draw companies back if there is an end to “irrational policies”.

107 companies move to Catalonia

A total of 107 companies from outside Catalonia have transferred their HQs to the region since the independence referendum on October 1, despite the fact that no company moved to Catalonia from another autonomous region.

Thus there are still 26 firms which decided to relocate their HQ to the Catalan autonomous region so far this month.

Since October 2, a total of 90 companies from outside Catalonia have installed their HQ in Barcelona and three in Gerona, while only two transferred their HQ to the province of Lérida. And finally, 12 firms installed their HQ in Tarragona over this period.

The College of Mercantile Registers publishes on a daily basis the names of scores of companies sector-wide which are moving their HQ to other regions, mainly Madrid.

Changing their tax residence as well

The flight of companies from Catalonia has not just been limited to moving their HQ. Since October 1, almost 1.000 firms have also changed their tax residence from Catalonia to other autonomous regions, according to figures released this Tuesday by the Tax Office.

The change in tax residency does not affect the main taxes which companies pay, VAT and corpororate tax, because these are state taxes.

The Tax Office has also analysed the trend in revenues of companies which have their tax residence in Catalonia.

In the first half of October, companies with tax residence in Catalonia accumulated on average 22.4% of total national revenues, a figure which declined almost 3 percentage points to 19.6% in the second half of last month.

The Tax Office highlights that those companies with their tax residence in Catalonia, in sectors like energy, water or construction have reduced their share of national sales by almost 20 points. And financial and insurance companies’ share has fallen by four points.

When the first lot of companies started to leave Catalonia, ex-deputy president of the Generalitat, Oriol Junqueras, now in prison, said their decision was a “temporary” one. But it now looks as if their departure is irreversible, or at least indefinite. For example, Banco Sabadell made it very clear that it was moving to Alicante to stay. The bank’s chairman, Josep Oliú, explained that “Banco Sabadell’s decision to move its HQ has no sell by date.”

And in the opinion of many experts, moving a company’s tax residency always ends up taking part of its operations with it.

About the Author

The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.