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What do Temporary Joint Ventures consist of?

If you are one of those who have ever thought about starting a business in Spain and are looking for different alternatives, Temporary Joint Ventures may be the option that fits your needs. Do you want to know what they are all about? Read on to find out!

What are Temporary Joint Ventures?

Temporary Joint Ventures, also known by their acronym UTES, correspond to collaboration systems to develop a project of a work, service or supply between businessmen, for a previously determined period of time, and without having a legal personality.

In this sense, Temporary Joint Ventures have a clear objective: to allow several companies to operate in a work, service or supply inside or outside Spain.

In addition, it is understood that this modality is most frequently observed in projects related to engineering and construction works, since this is their main focus of action, excluding other business sectors.

Regarding the duration of the joint ventures, the time must be established based on the duration of the work to be performed, with a maximum of 25 years. On the other hand, contracts related to the execution of works and exploitation of public services are exempted, since they imply a maximum duration of 50 years.


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Characteristics of Temporary Joint Ventures

When we talk about Temporary Joint Ventures, there are certain characteristics that identify them and distinguish them from other business modalities in Spain. Here are the most important aspects:

  • As already mentioned, the UTES are not companies per se and do not have legal personality.

  • The liability of the partners is unlimited and joint and several.

  • Must have a single manager

  • As a collaboration between companies, they often achieve results that would be difficult to achieve individually.

  • There is no limit on the number of companies to create a joint venture. However, there are usually two members.

  • Founders can be either individuals or legal entities.

Regulations involved in Temporary Joint Ventures

Temporary joint ventures are regulated by Law 18/1982 on the Tax Regime for Groupings and Temporary Business Associations, thus admitting contractual collaboration systems without the need to establish their own legal personality.

Subsequently, these regulations were repealed by Law 12/1991, of April 29, 1991, on Economic Interest Groupings, together with Law 43/1995, on Corporate Income Tax, and Law 62/2003, on Tax, Administrative and Social Order Measures.

Public deed

With respect to the formalization of Temporary Joint Ventures, the regulations establish that it must be presented before a public deed containing the following information:

  • Name, surname and company name of applicants

  • Name and surname of the selected manager

  • Nationality and domicile of applicants

  • Specify the willingness of the grantors to form the Union

  • Date of duration of the activity to be performed

  • Tax domicile in Spain

  • Liability to third parties for acts and transactions

  • Contributions to the common operating fund and how the project will be financed

  • Method to determine the participation of each of the companies in the distribution of the results, income and expenses to be realized

  • Time criterion for allocation by cost and revenue involved

  • Lawful covenants and special conditions deemed necessary by applicants


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Tax regime for Temporary Joint Venture Companies

Although the UTES do not have legal personality, it is necessary to formalize their incorporation by means of the public deed previously explained and opt for the corresponding tax transparency regime.

These companies must register with the Special Registry of UTES, of the Ministry of Finance, and will have to comply with accounting requirements similar to common Spanish companies.

With respect to the Tax Administration, Temporary Joint Ventures are subject to withholdings on account of Personal Income Tax or Corporate Income Tax, as well as indirect taxes applied according to the activity to be carried out.

Production, Services and Import Taxes

In the cities of Ceuta and Melilla there is a 99% bonus on business operations, provided that they are for the fulfillment of the purposes for which the joint venture was formed.

Corporate income tax

For this type of tax, the UTES must be taxed according to the provisions established for Spanish Economic Interest Groupings. In addition, there are three situations to be presented:

  • Joint ventures that do not comply with Law 18/1982 will not be considered as taxpayers of this tax and will be taxed according to the income attribution regime.

  • The UTES that comply with the requirements of this law and are registered in the Special Registry will be considered as taxpayers of the Corporate Income Tax and will be taxed for it.

  • The UTES that comply with the requirements of the law, but are not registered in the Special Registry, will also be considered taxpayers of the Corporate Income Tax and will be taxed under the General Regime.

Value Added Tax

In the case of VAT, Temporary Joint Ventures are considered as taxable persons, and it is understood that they do not present any particularity in relation to companies.

Transfer Tax and Stamp Duty

The following operations will be exempt from this tax:

  • Constitution

  • Expansion

  • Reduction

  • Dissolution

  • Liquidation

  • Preparatory contracts


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At TAS Consultoría we offer you personalized attention from our tax, accounting and legal experts so that you can operate in Spain in the right way. Do you need advice to start your procedures? Don’t wait any longer and contact us at!


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