• The new regulation originates from the principle of company freedom and its purpose is to facilitate the free establishment of trade distribution services.
• The application of this regulation will mean greater liberalisation of the sector and simplification of administrative processes; it will increase legal security, reduce costs and contribute to the creation of employment.
• The new Act is based on strict compliance with the Community Services Directive, while respecting the exclusive competencies of the Autonomous Regions on matters of domestic trade.

According to estimates from the sector itself, the reform could contribute to the creation of some 50,000 jobs in the coming years and will generate indirect investment of around 4,000 million euros.

The Lower House of Parliament [Congreso] has approved the reform of Act 7/1996 on Retail Trade Regulation, although this Act had already been amended many times in order to bring its content into line with the constant process of globalisation of the economy and with the need for regulation in this field to be adapted to the reality of the markets.

The new Act amends the retail trade regulation thereby adapting it to the provisions of the “Omnibus” Act [access to service businesses and their operation], responsible for the transposition of Directive 2006/123/EC, relative to services in the domestic market. The Spanish trade model is noted for a high trade density which is characteristic of the Mediterranean countries and for the particular way of structuring urban centres around shopping areas. The aim of the legislative amendment is, without losing these values, to increase the value generated by commercial distribution through liberalisation of the provision of services and the restriction of charges on companies.

The new Act respects the exclusive competence of the Autonomous Regions on matters of domestic trade, although the State is authorised to establish a national regulation to serve as a base so that the Autonomous Regions can implement the regulation appropriate to them in the exercise of their competencies. The new text, together with the provisions of the “Umbrella Act”, will constitute the reference framework for the regional regulation.

The new regulation originates from the principle of company freedom and its purpose is to facilitate the free establishment of trade distribution services through a framework where the various trading formats may freely compete.

The economic impact of the reform will be significant, as according to estimates from the sector, the anticipated indirect investment is around 4,000 million euros and could contribute to the creation of some 50,000 jobs in the short and medium term.

Most relevant amendments introduced in the Act

• The freedom to set up a business as a general principle, eliminating the compulsory trading licence. Nevertheless, an authorisation system may be established, justifying it in accordance with the principle of proportionality and objectively identifying the reasons for the establishment of the same and the estimated impact.
• The restrictive economic criteria of competition are abolished, as well as the participation of competitors in the authorisation processes. Parliamentary processing has entailed the detailed inclusion of the requirements of a financial nature that are banned in the granting of licences; this will contribute to increasing transparency in the procedures and the legal security of the operators.
• Autonomous Regions will be setting up an authorisation procedure that will incorporate all the necessary processes. This will mean bringing forward the start-up of trading activity, saving costs for operators.
• The definition of a large retail business is abolished, thereby avoiding discrimination from State legislation on the various trading formats, since no reference whatsoever is made to the square metres of the establishments. The only relevant aspect will be the environmental or urban impact, or the impact the establishment has on historical-artistic heritage, depending on the area or territory, without taking account of the area involved.
• Prior authorisation for vending machines is abolished, and only the approval of the models is required.
• The duration of permits for street trading is limited so as to guarantee the rotation of competitors due to the scarcity of road space available, in any case guaranteeing street traders the recovery of their investments. The highlights amongst the new features in the text following its parliamentary processing are the automatic renewal of licences granted prior to the Act coming into force and the competence of Autonomous Regions and Local Councils to determine the terms.
• The obligation to officially register before starting up a business is replaced by the need for a communication to the Registry for distance selling and franchisers after the start-up.
• In cases where Spain could be fined in proceedings under European law, whose origin lies in regional trade legislation, any possible fines will be transferred to the corresponding Autonomous Region.