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.
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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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Del Canto Chambers is a leading London Anglo Spanish firm specialising in Law, Tax & Legal Advice. Our dual-qualified, multilingual lawyers specialise in international law and tax and have worked on over 500 cases globally. Our main focus are legal and tax related issues in Spain.
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