A regime governing Spanish holding companies came into force in 1995 providing an efficient mechanism to structure multinational groups with investments in Latin America, since Spain has the most extensive network of tax treaties with countries in Latin America.
The ETVE is a regular Spanish company subject to Spanish Corporate Tax rules on its Spanish trading income, but exempt from taxation on qualified foreign-source dividends and capital gains. To benefit from this regime, the ETVE structure requires disclosure and notification to the Spanish tax authorities.
Spanish International Investment Companies (Entidades de Tenencia de Valores Extranjeros ETVE), are regular Spanish resident companies involved in “the supervision and management of securities issued by companies non-resident in Spain”. They are international investment companies and are widely used for Latam investment, using Spain, and its Latam treaty network, as a base.
The ETVE structure complies with all EU and OCDE criteria, including the benefit of being located in a double tax treaty jurisdiction and in the EU territory. As such, the ETVE is protected by EU Directives, such as the Parent-Subsidiary Directive and the Merger Directive, and is regarded as Spanish resident for tax purposes.
The broad Spanish tax treaty network, specifically with Latin America, and the European character of the ETVE, makes it an interesting vehicle for channelling capital investments towards Latin America, as well as a tax-efficient exit route for EU capital investments by non-EU companies.
In 1995, the Spanish Corporate Tax Act (Ley 43/1995 del Impuesto de Sociedades), included a chapter devoted to the tax regime of the ETVE, Entidades de Tenencia de Valores Extranjeros (Foreign Securities Holding Companies), which most people know as the International Spanish Holding structure. Over the years, the structure has proved to be robust enough to compete in the international tax planning market for holding companies.
Spanish International Investment Companies (ETVE), “Entidades de Tenencia de Valores Extranjeros”, are extremely tax-efficient international investments structures. ETVE Spanish Holding companies are widely used by UK and international companies to structure investment holdings in Latin America, using Spain, and its treaty network, as the base.
The ETVE regime has been used for more than 20 years and is one of the most tax-efficient international investment vehicles in the world.
The ETVE is a regular Spanish company subject to Spanish Corporate Tax rules on its Spanish trading income, but exempt from taxation on qualified foreign-source dividends and capital gains. To benefit from this regime, the ETVE structure requires disclosure and notification to the Spanish tax authorities. Although formal authorization is not needed, communication is a formal requirement that must be complied with.
The ETVE may apply for a full participation exemption on qualifying investment income coming from dividends or capital gains according to certain rules, such as:
Del Canto Chambers will support and advise you on the creation of an international holding ETVE company in Spain. We can help determine how the ETVE is best structured and organised to serve your aims and our Tax & Legal team will take care of all the tax planning aspects, company formation as well as the accounting and compliance aspects of running the company annually. We can also provide directorship services.
The partner in the original engagement stays involved throughout the work to ensure you experience a seamless service. That connection provides consistency and intimate client knowledge, expertise and proactive advisory services.
We have worked with a variety of projects in Spain, Middle East and Latin America, advising European and American companies. Our team is able to offer turn key solutions managing the whole project with our local partners. At Del Canto Chambers we work with local auditing firms assisting with tax audits and general compliance.
Please contact us so we can explain in more detail the tax advantages of a holding company in Spain so that you can optimise your company’s international taxes.
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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