Know-How Transfer Agreement Spain (Acuerdo de Transferencia de Know-How)

A Know-How Transfer Agreement Spain (Acuerdo de Transferencia de Know-How) is a formal written contract under which one party — the transferor (cedente or licenciante) — grants another party — the transferee (cesionario or licenciatario) — the right to use, exploit, and benefit from proprietary technical knowledge, trade secrets, processes, formulas, methods, and expertise (know-how) that are not publicly available. Know-how transfer agreements in Spain are governed principally by the Código Civil (Real Decreto de 24 de julio de 1889) Article 1255, which establishes the principle of autonomía de la voluntad allowing parties to freely structure the transfer of know-how, and by the Ley 1/2019, de 20 de febrero, de Secretos Empresariales, which implements Directiva (UE) 2016/943 on the protection of undisclosed know-how and business information and defines the legal framework for trade secret protection, licensing, and enforcement in Spain.

The Ley 1/2019 de Secretos Empresariales defines a secreto empresarial (trade secret) as information that: (i) is secret — not generally known or readily accessible to persons in the relevant sector; (ii) has commercial value by reason of its secrecy; and (iii) has been subject to reasonable measures by its holder to keep it secret — Article 1 Ley 1/2019. Know-how typically falls within this definition: manufacturing processes, formulas, recipes, software algorithms, customer data analysis methodologies, operational procedures, and technical specifications that give their holder a competitive advantage but are not patented.

Know-how transfer agreements differ from patent licensing agreements — patents are publicly disclosed and subject to the Ley de Patentes (Ley 24/2015) and European Patent Convention (Convenio sobre la Patente Europea — CPE), while know-how relies on secrecy for protection. A know-how agreement may be structured as: (i) a pure assignment (cesión) — the transferor permanently transfers ownership of the know-how to the transferee, who becomes the sole holder; or (ii) a licence (licencia) — the transferor grants the transferee the right to use the know-how for a defined period and territory, while retaining ownership. Licence structures may be exclusive (exclusiva — the transferor cannot grant identical rights to other licensees or use the know-how itself in the licensed territory), sole (en solitario — only the transferor and licensee may use), or non-exclusive (no exclusiva).

For Spanish tax purposes, royalty payments under know-how transfer agreements are classified as rendimientos del capital mobiliario (income from moveable capital) for individuals under Ley 35/2006 del IRPF Article 25, or as ordinary income for companies under the Impuesto sobre Sociedades (IS — Ley 27/2014). Spain's IP Box regime — the patent box under IS Article 23 of Ley 27/2014 — provides a 60% reduction of taxable income derived from the licensing or assignment of certain qualifying intangible assets (activos intangibles cualificados) including patents, utility models (modelos de utilidad), software protected by copyright (programas de ordenador), and other IP created through R&D activities. Know-how licensing income may qualify for the IS Article 23 IP Box if the know-how was generated through qualifying R&D activities. The IP Box was modified by the OCDE/G20 BEPS Action 5 recommendations, implemented in Spain through the nexus approach requiring that the qualifying income-generating activity be performed by the Spanish taxpayer.

Cross-border know-how transfer agreements involving Spanish and foreign parties must consider transfer pricing (precios de transferencia) rules under IS Article 18 of Ley 27/2014 and the OCDE Transfer Pricing Guidelines — royalty rates between related parties (partes vinculadas) must reflect arm's length conditions and be documented in the taxpayer's mandatory transfer pricing documentation (documentación de operaciones vinculadas) filed with the AEAT. The applicable withholding tax rate on royalty payments to non-resident entities is determined by Spain's bilateral tax treaty (convenio de doble imposición) with the recipient's country of residence — typically ranging from 0% (EU parent-subsidiary payments under Directiva 2003/49/CE — Interest and Royalties Directive) to 10%–15% under bilateral treaties, vs. the domestic 24% rate under IRNR (Real Decreto Legislativo 5/2004).

Competition law considerations under the Ley de Defensa de la Competencia (Ley 15/2007) and the EU Technology Transfer Block Exemption Regulation (TTBER — Reglamento UE 316/2014) are relevant for know-how licences between competing companies — provisions restricting the licensee's freedom to set prices, territory, or customers may violate Article 101 TFEU and LDC Article 1 unless they fall within the TTBER safe harbour.

A Know-How Transfer Agreement Spain is needed whenever a business wishes to monetise, transfer, or protect its proprietary technical knowledge, trade secrets, or processes through a formal contractual arrangement.

The agreement is required when a Spanish manufacturer licences its proprietary production process or formula to a third party — enabling the licensee to produce goods using the transferor's know-how in exchange for royalty payments (regalías) under a defined territory and exclusivity arrangement governed by the Ley 1/2019 de Secretos Empresariales.

A Know-How Transfer Agreement is needed when a franchisor (franquiciador) provides its operational manual, trade secrets, customer service methodologies, and brand standards to a franchisee (franquiciado) as part of a franchise agreement — the know-how licence is a core component of the franchise relationship alongside the brand licence (licencia de marca) under the Ley de Marcas (Ley 17/2001).

The agreement is necessary when a company acquires another business and the target's principal value consists of know-how — operational procedures, recipes, algorithms, or customer relationship methodologies — rather than patented technology. The know-how transfer agreement documents the assignment (cesión) of trade secrets from the seller to the buyer as part of the M&A transaction under the Ley de Sociedades de Capital (RDL 1/2010).

A Know-How Transfer Agreement is required when a Spanish company enters a technology transfer relationship with an international partner — transferring technical expertise to a joint venture partner, distributor, or manufacturing licensee in another country — subject to transfer pricing compliance under IS Article 18 of Ley 27/2014 and the OCDE Transfer Pricing Guidelines.

The agreement is needed when an entrepreneur or inventor has developed valuable know-how outside a corporate context and wishes to licence it to a company for commercial exploitation, retaining ownership while receiving ongoing royalties — the agreement protects the licensor's rights under Ley 1/2019 and defines the commercial terms.

A Know-How Transfer Agreement is also required when a technology company or software developer licences its proprietary algorithms, data processing methods, or AI training methodologies to a client company — the agreement must address the intersection of know-how protection under Ley 1/2019, software copyright under the Ley de Propiedad Intelectual (RDL 1/1996), and any personal data processing implications under the RGPD (Reglamento UE 2016/679) and LOPDGDD (Ley Orgánica 3/2018).

Under the Ley de Sociedades de Capital (LSC) RDL 1/2010, the Registro Mercantil maintains the register of Spanish companies. The Código de Comercio 1885 governs commercial obligations. The Agencia Estatal de Administración Tributaria (AEAT) administers Impuesto sobre Sociedades (IS) under Ley 27/2014. The Comisión Nacional de los Mercados y la Competencia (CNMC) enforces competition law. The Código Civil governs general contractual obligations under Article 1255.

A valid Know-How Transfer Agreement Spain under the Ley 1/2019 de Secretos Empresariales and Código Civil must include the following essential elements.

Identification of Parties: Full legal details — name, NIF/DNI/NIE, Registro Mercantil registration (for companies), and address — of the transferor (cedente/licenciante) and the transferee (cesionario/licenciatario). For cross-border agreements, include the country of incorporation and tax residence, as these determine the applicable withholding tax rates under Spain's bilateral tax treaties (convenios de doble imposición) and the transfer pricing documentation requirements under IS Article 18 of Ley 27/2014.

Definition and Description of Know-How: A precise description of the know-how (know-how or conocimientos técnicos) subject to the agreement — technical processes, formulas, methods, software methodologies, operational procedures, or other proprietary information. The definition must be specific enough to satisfy the Ley 1/2019 requirements (secret, commercially valuable, subject to reasonable protective measures) and to delineate the scope of the licence or assignment. The description is typically contained in a technical exhibit (anexo técnico) appended to the agreement.

Transfer Structure — Assignment or Licence: Explicit statement of whether the know-how is being: (i) assigned (cedido) — permanent transfer of ownership to the transferee; or (ii) licensed (licenciado) — the transferor retains ownership and grants a defined right to use. For licences, specify: exclusivity (exclusiva / no exclusiva), territory (territorio), permitted uses (usos permitidos), sublicensing rights (derechos de sublicencia), and duration (plazo).

Secrecy and Protection Obligations: Obligations on the transferee to maintain the secrecy of the know-how consistent with Ley 1/2019 de Secretos Empresariales — including implementing reasonable protective measures (medidas razonables para mantener el secreto), restricting access to need-to-know personnel, and training employees on confidentiality obligations. These obligations must survive termination of the licence for the period necessary to protect the commercial value of the know-how.

Royalty and Payment Terms: The agreed royalty rate or licence fee — which may be: (i) a running royalty (regalía variable) — a percentage of the licensee's net sales of products incorporating the know-how; (ii) a fixed periodic fee (canon fijo); or (iii) a lump sum payment (pago único). The royalty rate must reflect arm's length conditions for related-party transactions under IS Article 18 and OCDE Transfer Pricing Guidelines. Royalty payments are subject to IVA at 21% under Ley 37/1992 del IVA for services between Spanish VAT-registered entities. Cross-border royalties are subject to IRNR withholding under RDL 5/2004, reduced by applicable tax treaty rates.

IP Box Qualification: For agreements generating royalty income eligible for the IS Article 23 IP Box regime (60% income reduction) — confirm that the know-how was generated through qualifying R&D activities meeting the nexus requirement under the OCDE/BEPS Action 5 framework and Ley 27/2014. The Ministerio de Ciencia e Innovación's informe motivado may be required to substantiate R&D qualification for IS Article 35 R&D credit and IS Article 23 IP Box purposes.

Technology Improvements and Updates: Provisions addressing improvements (mejoras) to the know-how made by either party during the agreement — who owns improvements, whether improvements must be shared (grant-back provisions), and whether the royalty rate adjusts to reflect updated know-how. Grant-back provisions that require the licensee to assign improvements exclusively to the licensor may restrict competition under the EU TTBER (Reglamento UE 316/2014).

Audit Rights: The licensor's right to audit (auditar) the licensee's records to verify royalty calculations — particularly important for running royalties based on sales figures. The audit right should specify frequency (typically once per year), notice period, and who bears the audit cost.

Termination and Post-Termination: Conditions for termination — including for breach, insolvency, or at the end of the fixed term — and post-termination obligations: the licensee must cease using the know-how, destroy or return all materials containing the know-how, and certify destruction in writing. Post-termination confidentiality obligations continue for the period during which the know-how retains its trade secret status under Ley 1/2019.

Governance and Dispute Resolution: Spanish governing law under Reglamento Roma I (CE 593/2008), jurisdiction before the Juzgados de lo Mercantil or institutional arbitration under Ley 60/2003 — arbitration is preferred for confidential IP disputes. For international agreements, the Corte de Arbitraje de la Cámara de Comercio Internacional (CCI) or the London Court of International Arbitration (LCIA) are alternatives.

Forms-legal.com provides this Know-How Transfer Agreement Spain as a practical starting point for businesses seeking to license or assign proprietary knowledge. Transfer pricing compliance, IP Box qualification, and cross-border royalty withholding are complex areas — the agreement should always be reviewed by a qualified abogado specialising in propiedad intelectual and a tax adviser familiar with AEAT's R&D and IP Box rules.

Under the Ley de Sociedades de Capital (LSC) RDL 1/2010, the Registro Mercantil maintains the register of Spanish companies. The Código de Comercio 1885 governs commercial obligations. The Agencia Estatal de Administración Tributaria (AEAT) administers Impuesto sobre Sociedades (IS) under Ley 27/2014. The Comisión Nacional de los Mercados y la Competencia (CNMC) enforces competition law. The Código Civil governs general contractual obligations under Article 1255.