THE ECONOMICS OF THE INDEPENDENCE PROCESS

Only 12% of companies have completed the transfer of their headquarters

Although almost 3,000 had begun the process, as of the end of November, only 332 companies had actually completed it

Between 2 October and 12 December, a total of 3,004 companies with their headquarters in Catalonia had initiated the steps necessary to move their registered office outside of Catalonia, according to figures provided yesterday by the Association of Registrars. However, at present only a tenth of them have actually changed their headquarters. Between 1 October and 30 November, only 332 companies had completed the formalities required to carry out the move, according to Catalan government statistics based on Mercantile Registry figures, which ARA has had access to. This is almost 12% of the little more than 2,800 that had initiated the procedure at the end of November. Companies have up to three months to complete the transfer process once they have begun.

In other words, many of the companies that started the procedure over the last two months since the 1-O referendum have not completed it. Nevertheless, they still have time to do so, as the certificate is valid for three months, meaning they still have time to finalise the transfer, if they wish. The Association of Registrars has been releasing information on the companies that have initiated the procedure, but does not expect it will have the figures on the actual number of transfers until the end of January, when it will have readied the statistics for the fourth quarter of the year, according to Registrars' Association sources yesterday.

It is possible to get an overview of the type of companies that have finalised the transfer process. Few foreign-owned companies have left Catalonia, and most of those that have done so are from the financial sector or regulated industries, such as the insurers Axa and Allianz.

Madrid, the top destination

Analysing the 332 companies that have completed all the formalities, it can be seen that Madrid is the top destination, accounting for 56% of the total. The areas bordering Catalonia, such as Aragon and Valencia, are next on the list, at 11% and 9% respectively. They are followed by the Balearics (6%) and Andalusia (5%).

According to the Association of Registrars’ figures, the number of companies that have initiated the procedure to move their headquarters has declined. It reached a peak on 19 October, when 268 companies started the procedure in one day, while last week it declined to a minimum, with 24 companies on Monday 4 December, 23 on 5 December and 18 on Thursday 7.

In October, 96 companies had finalised the relocation of their headquarters, while in October last year 61 had done so, according to Ministry of Economy sources. In November there was a marked difference, rising from 43 last year, to 236 this year. In short, between October and November last year 104 companies left Catalonia, while this year more than triple, 332, have done so.

In spite of the exodus of companies from Catalonia, there are also those that undertake the journey in the opposite direction. Between October and November, 73 companies from other Spanish regions relocated to Catalonia, while 79 did so last year during the same period. Interestingly, more than half (53%) moved from Madrid.

The effect on reputation

Apart from the exodus of companies, the Catalan political situation has an economic cost for Spain as a brand name, although one that is hard to quantify. According to the consultancy Reputations Institute, it could amount to €12 billion, due to a 15% drop in visitors to Spain and an almost 2% decline in direct investment in Spain as a whole.

The institute’s report states there was a five percent drop in people’s intention to visit Spain in November compared to March, down to 82.4% for European respondents, and also four points in regard to investing in Spain, down to 60%. Six out of every ten Europeans claim that Spain’s image has been affected by the conflict with Catalonia, and four out of every 10 European executives surveyed say that Catalonia and Spain’s appeal as a place to invest have diminished.

Barcelona’s reputation has suffered the most, since the intention to visit the city has dropped 5.2 percent, the intention to invest 7 percent and the intention to work and live here have fallen by 8.1 and 6.8 percent respectively.

THE KEY DETAILS

1. How does a firm begin the procedure to leave?

The company’s administrators must go to a notary to draw up a deed requesting a change of domicile. They then must visit the Mercantile Registry nearest to where their headquarters is located to register their request. The registrars used figures related to this procedure to conclude that 3,004 companies had moved their headquarters to another location in Spain as of 2 December. However, the process has not yet been completed, and the registrars say they will not have the final data until January.

2. What is the deadline for completing the process?

Once the move has been registered, the registrar at the place of origin verifies that the company has nothing pending. If the company is given the all-clear, the registrar issues what is known as a literal certificate, which is valid for three months. If a business fails to register the new address with the registry office in their new location within this time period, the company remains in its original location, though it can also request a new certificate in order to complete the procedure. According to the registrars, this three month leeway means some companies are waiting to see what happens on 21-D.

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