Are Trusts permitted in Spain?

16 Dec Are Trusts permitted in Spain?

Even though TRUSTS are not a valid legal instrument in the Spanish Law system, its implementation by Spanish natural persons, legal entities, or Spanish residents, is perfectly legitimate. This affirmation, though, due to reasons derived from internal Law as well as from the Spanish International Private Law, shall be circumscribed to the implementation of TRUSTS over assets located outside Spain in a jurisdiction that recognises this legal construction.

The legitimacy of the use of Trusts is similar to that pertaining to other legal instruments available in international legal-economy field. As long as the location of assets or investments abroad is sheltered by the regulations about free flow of goods and capitals, there can be no rule restricting the different legal vehicles Spanish residents can use in foreign countries.

A completely different thing, as in case of any other juridical structure, would be the implementation of TRUSTS to produce a result against the Law (from the Spanish Law point of view). From the Private Law perspective, its use in creditor’s fraud or in damaging the rights of third parties would immediately imply the use of measures to prevent these rights from being harmed.

The basic principle underlying the “inter vivos” juridical actuations is the feasibility of their singular assessment, and also the freedom to choose the applicable law, which would lead to a respectful observation of the chosen rules in the constitutional instrument of the TRUST. In what refers to its Real effects, the transmission effects and property of the trustee over goods located in a jurisdiction admitting the TRUST shall be recognised.