Family Business Succession Planning
Passing a family business to the next generation is rarely just a business decision — it is also, unavoidably, a family law and inheritance question. This becomes more complex when the business is based in Spain but family members hold different nationalities or live in different countries. We help family-owned businesses plan an orderly succession that protects both the business and family relationships.
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Why family businesses need more than a standard will
Spanish law reserves a fixed share of an estate for certain heirs, typically children, regardless of what a will says. Applied to a family business without planning, this can mean shares end up divided among heirs who may not agree on how the business should be run — or who may not want to be involved in it at all.
How much is reserved depends on which regional law applies. Spain does not have a single rule. Under the Civil Code, which governs most of the country, two thirds of the estate are reserved for descendants. Several regions apply their own succession law and the difference is substantial: in Catalonia the reserved share is one quarter and takes the form of a monetary claim rather than a share in the assets themselves; in Navarre it is purely formal, with no economic content; in the Basque Country it is one third, with wide freedom to choose among descendants; in Aragón it is one half, collective in favour of descendants; and the Balearic Islands apply different rules from island to island.
This matters a great deal for business planning. A structure that looks impossible under the Civil Code may be perfectly achievable under Catalan or Navarrese law, and the reverse is equally true. Establishing which law governs your estate is therefore the first step, not a technical detail.
The family business protocol
A family business protocol is a document, agreed among family members, that sets out rules for how the business will be governed, how shares can be transferred, who is eligible to work in the business, and how future succession will be handled. While it is not automatically binding as such, it can be structured together with corporate and testamentary documents to have real legal effect, and it gives the family a shared reference point that reduces disputes when a transition eventually happens.
Coordinating succession law with business structure
An effective plan usually needs to bring together several elements at once:
- Wills that account for forced heirship while reflecting the family’s actual wishes for the business as far as legally possible
- Corporate arrangements, such as share classes or shareholder agreements, that separate economic rights from management control where appropriate
- Lifetime transfers of shares or business assets, planned in advance rather than left entirely to inheritance
- Tax planning, since Spain offers specific reliefs for the transfer of family businesses under certain conditions — we work alongside your tax advisors on this, without providing tax advice directly
When family members live in different countries
International family businesses often face an added layer of complexity: heirs with different nationalities, living in different countries, potentially subject to different succession laws depending on where each family member is habitually resident. We help identify which law governs each family member’s situation and how that interacts with the succession plan for the business as a whole.
When the family or the business crosses borders
A family business rarely stays neatly inside one jurisdiction. A parent retires to Spain while the company remains in Germany; one sibling emigrates and the others stay; the holding company is Spanish but the operating subsidiary is not. Each of these facts changes the legal analysis, and the single most important question is which law will govern the succession.
Under Regulation (EU) No 650/2012, applicable to the estates of persons who died on or after 17 August 2015, the default rule is the law of the State where the deceased had their habitual residence at the time of death, and that one law governs the succession as a whole. The Regulation also allows a person to choose the law of the State of their nationality to govern their succession, a possibility known as professio iuris. For the owner of a family business this is not a technicality: the choice of law determines how much freedom you have to allocate shares, and therefore whether the succession plan you have in mind is achievable at all.
Two cautions are worth stating early. The Regulation does not apply in Denmark or Ireland, and it never applied in the United Kingdom, which held an opt-out before Brexit. Where those jurisdictions are involved, the analysis runs through national private international law and, where relevant, bilateral instruments. Company law is also outside the Regulation: the transfer of shares remains governed by the law applicable to the company itself, which is why a succession plan and a shareholders’ agreement have to be drafted looking at each other.
Coordinating the plan across jurisdictions
Where heirs or assets are spread across several EU Member States, the European Certificate of Succession created by the same Regulation allows heirs, legatees, executors and administrators to prove their status and exercise their powers in another Member State without any further procedure. In a family business context this can be the difference between a smooth handover and months during which nobody can lawfully act for the company.
Tax is a separate matter from succession law and is not governed by the Regulation. Inheritance taxation depends on national rules, on the autonomous community involved in Spain, and on any applicable double taxation treaty. We tell you where the tax question begins and work alongside tax advisers rather than pretending the two analyses are one.
How we help
- Drafting or reviewing a family business protocol tailored to your family’s structure and goals
- Aligning wills and corporate documents so they work together rather than in conflict
- Advising on lifetime transfers of shares or assets as part of a gradual succession plan
- Resolving disputes between family members when disagreements arise during a transition
Frequently asked questions
Can I leave the business to only one of my children?
Not entirely freely, if Spanish forced heirship rules apply to your estate, since a fixed share is generally reserved for all children — although how large that share is, and whether it must be satisfied in assets or can be paid in money, depends on which regional law governs your succession. However, planning tools exist — such as lifetime transfers, compensating other heirs with different assets, or structuring share classes — that can help you achieve a workable outcome. We review what is realistic for your situation.
What is a family business protocol, exactly?
It is an agreement among family members setting out governance rules, succession criteria, and expectations for the business, designed to prevent disputes when a generational transition happens.
Our family is spread across several countries. Does that complicate succession planning?
It can, since different family members may be subject to different succession laws. We help map this out early, so the plan for the business accounts for it rather than being disrupted by it later.
When should we start planning this?
Earlier than most families expect. Succession plans put in place well before they are needed tend to be far more effective than those drafted under time pressure or during a health crisis.
Speak with a family lawyer in Spain
Tell us about your situation. We will review the international elements of your case and explain the legal steps and documentation required.