A SOCIMI (Sociedades Anónimas Cotizadas de Inversión Inmobiliaria) translates as Listed Corporations for Investing in the Real Estate Market and is similar to a Real Estate Investment Trust in the UK. SOCIMIs are public limited investment companies, created to encourage long-term investment in the Spanish property market through investment in Spanish urban real estate for rent such as homes, hotels or commercial premises.
SOCIMIs are limited companies listed on stock exchange markets whose activity is restricted to the use of properties for lease. On the downside, a SOCIMI has higher running costs than some other types of funds, but if the fund is large enough, the tax advantage more than compensates for this.
In addition to properties in Spain, SOCIMI can have real estate properties anywhere in the world, and may have up to 20% of their investment portfolio in non-real estate assets, although to that percentage different tax rules apply.
See one of our major case studies Acquisition of Edificio Plaza España Madrid
SOCIMIS are attractive investment vehicles which benefit from:
In addition to one of the most dynamic real estate investment vehicles, SOCIMIS offers one of the most efficient, fiscally speaking, asset structures in Europe.
The law around SOCIMI has evolved and partially relaxed over the years, most recently being amended in 2016 with the removal of some of the regulatory barriers and improvement in their tax treatment.
There are various legal requirements a SOCIMI must comply with including:
The SOCIMI must annually distribute dividends to its shareholders as follows:
SOCIMIs are an interesting investment vehicle given their stable profitability, liquidity and certain significant tax advantages given that they are protected by a special tax regime based on a 0% Corporate Tax rate. Notwithstanding specialist legal and tax advice is required to ensure they have fulfilled the necessary legal requirements and tax compliance.
Del Canto Chambers’ dual-qualified, multilingual tax lawyers have handled over 500 complex cases from Europe, the Middle East, Latin America, and Asia. Discerning London-based and international clients, corporations, solicitors, and tax advisors count on our expertise.
You can more about what clients have to say, about working with Del Canto Chambers here below.
The Beckham Rule is a special Spanish tax regime for expatriates. It allows qualifying individuals to pay a flat tax rate on employment income and to be treated as non-residents for certain other tax purposes.
Any individual who moves to Spain for professional reasons and has not been tax resident in Spain during the five previous tax years may apply. This includes employees, remote workers, directors, and certain entrepreneurs.
Qualifying income is taxed at a flat rate of 24% up to €600,000. Income exceeding that threshold is taxed at 47%.
You must not have been considered a tax resident in Spain during the five tax years immediately preceding your relocation.
Your move to Spain must be for genuine employment or professional reasons, such as:
Holding an employment contract with a Spanish or foreign companyWorking remotely from Spain under a Digital Nomad Visa
Acting as a highly qualified professional or entrepreneur conducting a business activity in Spain
Serving as a director of a company, provided that—if the company is asset-holding—you hold no more than 25% of its shares
You must apply for the regime within six months of registering with the Spanish Social Security system (Seguridad Social). This deadline is strictly enforced.
The regime applies for a total of six tax years: the year you become a Spanish tax resident and the following five full years.
The regime applies for a total of six tax years: the year you become a Spanish tax resident and the following five full years.
Under the Beckham Rule, all employment and professional income is taxable in Spain, regardless of where it is earned. However, income from non-Spanish sources—such as interest, dividends, investment income, and capital gains—is not subject to Spanish tax.
You are only subject to Wealth Tax and Solidarity Tax on assets located in Spain. Foreign assets are excluded from the Spanish tax base during the six-year period.
Your spouse and dependent children under 25 (or of any age if legally disabled) may also benefit from the regime, provided they meet the requirements and file separate applications.
If you move to Spain to act as a director, you may apply regardless of your shareholding. However, if the company is an asset-holding entity, your ownership must not exceed 25%.
If you cease to be tax resident in Spain before completing the six-year period, you will automatically lose the benefits of the regime. From that point onward, you will be taxed under the general Spanish tax system, which includes progressive rates and worldwide income taxation.
Del Canto Chambers has a specialised team ready and eager to support you to apply for Spanish nationality. If you are interested in applying and would like to know if you are eligible, we would be delighted to help you.
Del Canto Chambers specialists are constantly up to date with new legislative changes and aware of any Spanish tax and legal implications. Contact our Spanish legal and tax specialists to find out the best tax planning and corporate structures in your circumstances.
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