The Spanish Tax Regime for Foreign-Securities Holding Companies, known in Spain as entidades de tenencia de valores extranjeros (ETVE) is considered as one of the most competitive holding regimes in the European Union. The companies under the ETVE Regime are Spanish resident companies whose corporate purpose must include "the supervision and management of securities issued by companies non resident in Spain". Although they may also include any other activity (i.e. carrying on business activities in Spain or overseas). The company itself is a regular Spanish corporate entity, and it is subject to Spanish coporate income tax.
The main advantages are:
1. When an ETVE owns a share in a foreign qualifying participation, the dividends and capital gains received by the ETVE are totally exempt from Spanish corporate income tax.
2. Furthermore, capital gains arising from the sale of the shares of the ETVE are not subject to taxation in Spain when certain conditions are met.
3. In addtion, and this is extremely attractive to investors from all over the world, the distribution of dividends from Spain from the ETVE to a non-resident shareholder, are not subject to withholding tax in Spain.
Above that, companies under the ETVE Regime are Spanish resident companies and therefore, they may benefit from the Spanish wide network of treaties for the avoidance of double taxation. Spain has one of the most extensive treaty networks in the world.
Europe: Spain has a double tax treaty convention with almost all European countries. Additionally, the Spanish ETVE may take advantage of the Parent-Subsidiary Directive: 0% withholding tax for dividends received from subsidiaries resident in other European Union countries.
Latin America: For clients wishing to invest into Latin America, the use of Spanish holding companies is extremely popular. The main driver is Spain's extensive network of double tax treaties and bi-lateral investment treaties with just about all of the Latin American countries.
The very favourable Spanish tax regime for holding companies combined with these treaties makes Spain the juridiction of choice for structuring Latin American inward investments.
With more than 15 years of experience in ETVE's, David Mülchi & Asociados can undertake all the steps required for the incorporation of a Spanish company in Madrid, Barcelona, or any other Spanish city. PRIVATIA CONSULTING SL, our own trust & corporate services company makes us able to provide the full range service. DM&A will coordinate all legal and fiscal aspects of the creation of an ETVE in Spain, providing all the required management, administrative and legal services and will designate and work directly with other professionals if necessary.
