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DIKEOS advises on relocation from Catalonia

Madrid, 10 September 2017

On 6 September 2017, the Catalan Parliament decided to hold a referendum on the Catalan division from the Spanish Kingdom. If on 1 October 2017, a majority of the 5.4 million electors vote for the independence, the Catalan Government intends to announce the separation from the Kingdom of Spain within 48 hours and to convoke a constitutional assembly.

According to constitutional principles, the referendum could be unlawful. In addition, there are doubts whether the referendum can be carried out in the legal form. Several majors have already announced that they do not intend to put election ballot boxes at the disposal of the referendum.

However, the political process of a split has never been as advanced as it is now. If the referendum is successful, the Spanish central government will probably no longer be able to enforce the constitutional unity of Spain.

This creates considerable uncertainties for companies based in Catalonia or that have their production sites in such territory. In the case of a spin-off, economic activity would no longer take place in Spain, and neither in the European Union.

The companies would probably even be exposed to very different legal frameworks within a short time. In particular, a currency changeover, import and entry formalities, the economic decoupling from the Spanish social security and pension system, restrictions on capital freedoms, etc. This situation will most likely lead to a delay in upcoming investment decisions.

DIKEOS advises on the legal consequences resulting from a Catalan spin-off, as well as the necessary steps to move the economic activities out of Catalonia. In particular, as regards administrative and labour law, many questions may arise. Amongst others, whether the simple risk of a Catalan division is already a justified reason for a relocation of the business and of the company from a labour law point of view.

Our lawyers are at your disposal to discuss upcoming issues and questions.

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