Junts proposes penalizing firms not returning to Catalonia

Junts proposes penalizing firms not returning to Catalonia

On October 6, 2017, thousands of companies and the two major Catalan banks announced the transfer of their registered offices out of Catalonia. The press dubbed it Black Friday. Six years later, the investiture agreement between PSOE and Junts includes a plan to "facilitate and promote" their return, with separatist negotiators proposing sanctions for companies keeping their domicile outside the region. Estimates suggest more than 7,000 firms left during the separatist coup. Most affected large companies have already stated they will not return.

What Junts proposes and its legal basis

The measure involves limiting access to grants, exemptions, or public support for companies that do not return once the pact is finalized. Separatists cite Article 9 of the Capital Companies Act, requiring domicile at the center of effective administration. They also reference the 2017 decree by Mariano Rajoy's government allowing seat changes without shareholder meetings. The paradox is clear: they do not ask for its repeal, as that would complicate the very return they seek.

Reading the fine print reveals no expropriation or bans, but conditioned public treatment: those who return receive benefits; those who don't are excluded. This is administrative pressure, not incivil sanction, which introduces initial legal hurdles.

Can companies be sanctioned for domiciling outside Catalonia?

Participants argue this clashes with the legal framework. Public procurement is largely regulated at the European level, explicitly excluding discrimination based on fiscal residence. Barring companies due to their domicile conflicts with EU single market treaties. Regional application might work only for firms heavily dependent on Generalitat subsidies. At the state level, the measure is considered directly illegal.

Consensus suggests the plan will end in European courts rather than official gazettes. Relying on state law to justify unauthorized actions creates weak legal certainty, depending on whether companies comply with political demands.

Large companies show no intent to return

Despite requests from the Círculo de Economía and demands from the Generalitat, relocated companies have not moved. Reasons remain legal uncertainty and political instability. Financial entities like Banco Sabadell and CaixaBank, along with Abertis, Cellnex, Colonial, SegurCaixa, Applus+, Catalana Occidente, eDreams, Banco Mediolanum, Arquia Banca, and Cementos Molins, have hinted at this stance.

Punishing those who left is poor incentive for return. Standard advice suggests lowering taxes and guaranteeing legal certainty. Some argue minimal incentives would suffice for voluntary return.

The scenario neither Madrid nor Catalonia wants

If pressure drives companies to another border, funds may flow to the Netherlands or other nations, bypassing both Spanish and Catalan treasuries. This lose-lose situation fuels anger: penalizing departure accelerates exit.

Meanwhile, some consumers advocate boycotting Catalan products, believing authorities won't act. It reflects the usual deflection: if the state doesn't intervene, consumers must.

Hidden aspects: debt and full tax cession

Amnesty, judicial persecution, and self-determination dominated headlines, but economic terms were substantial. Proposals include Catalan regional debt forgiveness and 100% tax cession, alongside the return plan. Economic clauses are central to the exchange, not peripheral.

Agreement details clarify commitments, determining if Catalonia gains, loses, or merely changes creditors. Companies leaving in 2017 now have further reason to stay put. No major firm has announced a return.