COMI Determination in Spain

COMI determination in Spain is the process by which a Spanish insolvency court establishes whether a debtor';s centre of main interests is located in Spain, thereby confirming Spanish jurisdiction over the insolvency proceedings. The outcome directly affects which law governs the case, which creditors can participate, and how assets across multiple countries are treated. This guide explains the legal framework, the procedural mechanics, the evidentiary standards applied by Spanish courts, and the practical implications for both debtors and creditors operating across borders.

COMI is the abbreviation for "centre of main interests," the connecting factor used in cross-border insolvency law to allocate jurisdiction between countries. In Spain, the concept is anchored in EU Regulation 2015/848 on insolvency proceedings (the Recast Insolvency Regulation), which applies directly and takes precedence over domestic rules whenever the debtor';s interests span more than one EU member state.

The COMI concept rests on a simple premise: insolvency proceedings should be opened in the country where the debtor conducts the administration of its interests on a regular basis and in a manner ascertainable by third parties. For companies and legal persons, EU law establishes a rebuttable presumption that the COMI is located at the place of the registered office. For individuals, the presumption points to the habitual place of residence. Both presumptions can be displaced by evidence showing that the actual centre of administration lies elsewhere.

Why does this matter in practice? Spanish courts that confirm COMI in Spain open what the Regulation calls "main proceedings." These proceedings have universal scope - they cover the debtor';s assets worldwide and bind creditors in all EU member states. A court in another EU country that opens proceedings after Spain has already done so can only open "secondary proceedings," limited to assets physically located in that other country. The stakes are therefore high: the COMI determination shapes the entire architecture of a cross-border insolvency.

Spain';s domestic insolvency statute, the Ley Concursal (consolidated and substantially reformed by Royal Decree-Law 16/2020 and later by Law 16/2022 implementing Directive 2019/1023), incorporates the COMI framework and assigns jurisdiction to the Juzgados de lo Mercantil - the specialist commercial courts - to make these determinations. The commercial court in the province where the debtor';s COMI is located has exclusive jurisdiction over the main insolvency proceedings.

Three overlapping legal instruments define the rules Spanish courts apply when determining COMI.

EU Regulation 2015/848 is the primary source. It defines COMI, establishes the presumptions, sets out the rules for challenging a COMI determination, and governs the coordination between main and secondary proceedings. Because it is an EU regulation, it applies directly in Spain without the need for transposition.

The Ley Concursal (Texto Refundido, approved by Royal Legislative Decree 1/2020) is Spain';s domestic insolvency code. It governs procedural matters that the EU Regulation leaves to national law, including how the insolvency petition is filed, what documents must accompany it, how creditors are notified, and how the insolvency administrator is appointed. The Ley Concursal was significantly restructured by Law 16/2022, which transposed the EU Restructuring Directive and introduced pre-insolvency restructuring plans alongside the traditional concurso de acreedores.

The Reglamento de Insolvencia and the case law of the Tribunal Supremo (Spain';s Supreme Court) and the Court of Justice of the European Union (CJEU) fill interpretive gaps. CJEU decisions such as Eurofood, Interedil, and Rastelli have shaped how Spanish courts weigh evidence of COMI, and Spanish commercial courts routinely cite these rulings when resolving contested jurisdiction disputes.

A non-obvious requirement is that Spanish courts must verify COMI of their own motion before opening main proceedings. Even if no creditor challenges jurisdiction, the court must satisfy itself that the debtor';s COMI is genuinely in Spain. This is not merely a formality: judges at the Juzgados de lo Mercantil have dismissed petitions or transferred cases to courts in other provinces when the evidence pointed to a different location.

The assessment of COMI is fact-intensive. Spanish courts look at a cluster of objective, ascertainable factors rather than any single criterion.

For corporate debtors, the starting point is the registered office presumption. If the debtor';s registered office is in Spain and there is no evidence of a disconnect between the registered address and the actual place of management, the court will typically confirm Spanish COMI without detailed inquiry. The presumption is strong but not irrebuttable.

Courts will look beyond the registered office when there are signs that the real centre of administration is elsewhere. Relevant factors include:

• Where the board of directors meets and takes decisions
• Where senior management is physically based
• Where the debtor';s main bank accounts are held and operated
• Where the debtor';s principal contracts are negotiated and performed
• Where employees are located and payroll is administered

The ascertainability requirement is critical. The CJEU has consistently held that COMI must be identifiable by third parties - particularly creditors - before the insolvency petition is filed. A debtor that moves its registered office to Spain shortly before filing, without any genuine relocation of management or operations, will face serious scrutiny. Spanish courts have refused to accept COMI in Spain in cases where the move appeared designed to take advantage of Spanish insolvency law rather than reflecting a genuine change in the debtor';s economic centre of gravity.

For individual debtors, the habitual residence presumption applies. Spanish courts examine where the individual actually lives, works, and maintains their primary economic relationships. A foreign national who owns property in Spain but lives and works abroad will generally not have Spanish COMI, even if they hold a Spanish tax identification number.

In practice, founders should consider documenting their COMI carefully before any financial difficulty arises. Contemporaneous records - board minutes, lease agreements, employment contracts, utility bills, bank statements - are far more persuasive than retrospective declarations.

The procedural pathway for COMI determination in Spain follows a defined sequence under the Ley Concursal and the EU Regulation.

The debtor or a creditor files an insolvency petition (solicitud de declaración de concurso) with the Juzgado de lo Mercantil in the province where the COMI is alleged to be located. The petition must include a statement of the debtor';s COMI and supporting documentation. For corporate debtors, this typically means the deed of incorporation, current registered office details, and evidence of where management is conducted. For individuals, it means proof of habitual residence.

The court reviews the petition and the COMI evidence before issuing the auto de declaración de concurso - the order opening insolvency proceedings. If the court is satisfied that COMI is in Spain, it declares the proceedings open and publishes notice in the Registro Público Concursal (the public insolvency register) and, for cross-border cases, in the European Insolvency Register. Publication triggers the obligation for courts in other EU member states to recognise the Spanish proceedings as main proceedings.

If a creditor or another interested party challenges the COMI determination, the court holds an inter partes hearing. The challenger must produce evidence rebutting the presumption or showing that the debtor';s actual centre of administration is elsewhere. The burden of proof shifts: once the presumption is engaged, the challenger bears the burden of displacing it.

A common mistake made by foreign creditors is failing to challenge COMI at the outset. Under the EU Regulation, a creditor who does not raise a COMI objection promptly - typically before or at the first hearing - may lose the right to challenge jurisdiction later. Spanish procedural law is strict on this point, and late objections are routinely rejected.

Timelines vary. An uncontested insolvency petition in Spain is typically resolved within a few weeks of filing. A contested COMI dispute can extend the process by several months, particularly if the court orders expert evidence or requests information from courts in other member states through the European Judicial Network.

If you are advising a client on a cross-border restructuring with a Spanish element, early legal analysis of the COMI position is essential. Contact info@vlolawfirm.com - we can help structure the setup correctly the first time.

COMI shifting refers to the deliberate relocation of a debtor';s centre of main interests from one jurisdiction to another before filing for insolvency. It is a controversial practice that Spanish courts and EU law treat with considerable scepticism.

The EU Regulation addresses COMI shifting directly. It provides that if a company moves its registered office within the three months before the insolvency petition is filed, the presumption in favour of the new registered office does not apply. For individuals, the relevant period is six months before filing. These look-back periods are designed to prevent opportunistic forum shopping.

Spanish courts have applied these provisions strictly. In cases where a company transferred its registered office to Spain shortly before filing, courts have examined whether the move was accompanied by a genuine relocation of management, staff, and operations. Where the evidence showed that the company continued to be managed from abroad, Spanish courts have declined jurisdiction or transferred the case to the courts of the country where the actual management remained.

A practical scenario illustrates the risk. A holding company incorporated in another EU member state moves its registered office to Madrid three months before filing a concurso petition. The board continues to meet in the original country, the management team remains there, and the company';s bank accounts are still operated from abroad. A major creditor challenges COMI. The Spanish court, applying the EU Regulation';s look-back rule and the ascertainability test, finds that COMI has not genuinely shifted to Spain and declines to open main proceedings.

A contrasting scenario: a technology company with genuine operations in Barcelona - a local management team, Spanish employees, Spanish bank accounts, and a lease on office space - files for insolvency after relocating its registered office from another EU country eighteen months earlier. The court finds that COMI is in Spain because the relocation was genuine, predated the look-back period, and was ascertainable to creditors through public records and commercial activity.

The distinction between genuine relocation and tactical forum shopping is ultimately a question of evidence. Many underestimate the depth of inquiry Spanish courts are willing to conduct, including requests for foreign corporate documents, bank records, and witness evidence from directors.

For creditors, the COMI determination in Spain has direct and immediate consequences for how they participate in the insolvency, what law governs their claims, and what protections they can rely on.

Once a Spanish court opens main proceedings, all creditors - regardless of their nationality or the governing law of their contracts - are bound by the Spanish Ley Concursal. This means Spanish rules on the ranking of claims, the treatment of secured creditors, the avoidance of pre-insolvency transactions, and the discharge of debts apply to the entire estate. A creditor holding a contract governed by English or German law does not escape Spanish insolvency law simply because of the choice-of-law clause in its agreement.

The EU Regulation does provide some protections for creditors located in other member states. Creditors have the right to lodge claims in the Spanish main proceedings, and the insolvency administrator is required to notify known creditors in other EU countries individually. The notification must be in the official language of the creditor';s country or in a language the creditor is likely to understand, and it must include a deadline for lodging claims.

Creditors should be aware that Spanish insolvency law distinguishes between privileged claims (créditos privilegiados), ordinary claims (créditos ordinarios), and subordinated claims (créditos subordinados). The ranking of a creditor';s claim under Spanish law may differ significantly from its ranking under the law of the contract. A creditor that holds a senior secured position under its own national law may find that the Spanish classification of its security interest produces a different outcome.

A non-obvious risk for foreign creditors is the application of Spanish avoidance rules (acciones de reintegración). The insolvency administrator can challenge transactions entered into before the insolvency if they are deemed detrimental to the general body of creditors. Spanish law applies a presumption of prejudice to certain transactions within a defined period before the insolvency declaration. Foreign creditors who received payments or security in that period may face clawback claims governed by Spanish law, even if the underlying transaction was governed by a different law.

What evidence does a Spanish court require to confirm COMI in Spain?

Spanish courts require objective, contemporaneous evidence that the debtor';s centre of administration is in Spain and ascertainable by third parties. For companies, this typically includes the deed of incorporation, evidence of where board meetings are held, employment contracts for Spanish-based management, lease agreements for Spanish premises, and bank account records. For individuals, courts look at lease or ownership documents for a Spanish residence, Spanish tax filings, and records of professional activity in Spain. Declarations by the debtor alone are insufficient; courts look for corroborating documentary evidence that creditors could have identified before the insolvency. The stronger and more consistent the documentary record, the less likely a COMI challenge will succeed.

How long does a COMI dispute typically take to resolve in Spain, and what are the costs involved?

An uncontested COMI determination is resolved as part of the initial insolvency order, typically within a few weeks of filing. A contested dispute - where a creditor or another court challenges jurisdiction - can add several months to the process, depending on the complexity of the evidence and whether the court requests information from foreign jurisdictions. Professional fees for contested COMI litigation in Spain can reach significant amounts, particularly when expert witnesses, foreign document production, or coordination with insolvency practitioners in other countries is required. State filing fees are relatively modest compared to the professional costs. Creditors considering a COMI challenge should weigh the cost of litigation against the practical benefit of shifting proceedings to a different jurisdiction.

Can a debtor choose Spanish insolvency law by moving its COMI to Spain before financial difficulties become acute?

In principle, a genuine relocation of COMI to Spain before insolvency is permissible, and Spanish insolvency law may offer advantages in certain restructuring scenarios, including the pre-insolvency restructuring plan introduced by Law 16/2022. However, the EU Regulation';s look-back periods - three months for companies, six months for individuals - mean that a move made close to the insolvency filing will not benefit from the registered office presumption. Courts will examine whether the relocation was genuine and ascertainable. A debtor that moves its registered office to Spain without relocating its actual management and operations faces a high risk that Spanish courts will decline jurisdiction. Genuine, well-documented relocation well in advance of any insolvency filing is the only reliable approach.

COMI determination in Spain is a technically demanding area where procedural timing, evidentiary quality, and knowledge of EU insolvency law intersect. Spanish commercial courts apply the EU Regulation rigorously, and both debtors and creditors face significant consequences if they misread the COMI position at the outset of proceedings. Early legal analysis, careful documentation, and prompt action in contested cases are the foundations of an effective strategy.

VLO Law Firms advises international clients on bankruptcy and insolvency matters in Spain. We can assist with COMI analysis, insolvency petition preparation, creditor claim lodging, avoidance action defence, and cross-border coordination with insolvency practitioners in other jurisdictions. To request a consultation, contact: info@vlolawfirm.com