Monday, July 18, 2016

Investing in Spain

Our lawyers got a vast knowledge in all matters regarding foreign investment in Spain. We can deal all minor and major issues and successfully advice on both general and particular ones. We belive that Spain is a premium destiny for investment, with interesting opportunities and being also a sustainable bridge to LATAM. Indeed we are very proud of being Iberoamericans and masters in law practice across the pond. Let our lawyers to tell you more about our LATAM expertise in our Latinoamérica blog, here.

Right now, according to ICEX information, Spain is the 10th-largest exporter of commercial services worldwide, 4th in the EU, and the 18th-ranked exporter of merchandise trade. Over 12,500 foreign companies are currently located in Spain across all economic sectors and 70 of the FORBES Top 100 companies have branches in Spain according to Thomson Reuters.

It is necessary to bring attention to Special Purpose Vehicles in Spain, highlighting the ETVE (Foreign Securities Holding Companies) company form, ellegible for a privilege tax treatment that we can resume in:

1. They benefit from a Special Tax Regime applicable to Holding companies.
a) No taxation on paid-in dividends.
b) No taxation on paid-in capital gains.
c) No taxation on paid-out dividends/gains.
d) Stable and reliable regime.
e) Wide tax treaty network (88 treaties to avoid double taxation).

2. The attractiveness of ETVEs goes beyond the pure Tax Holding Regime. The ETVE regime is an opportunity for international investors to channel their outbound investments (in Europe, LATAM and other countries) through Spanish HoldCos.

On the other hand, we must highlight the SOCIMI (Spanish REIT´s) company form, which are enjoying a significant boom in Spain due to important tax benefits and the economic rebound of the Spanish property market.

This special regime was introduced in 2009 (Act 11/2009) with the purpose of relaunching the real estate sector. This legal framework was softenedby means of amendments in 2010 and 2012.

This kind of companies are ellegible to be taxed at 0%, although the transfer of assets linked to the business activity once the maintenance period is reached and the income obtained from the lease of urban real estate that has failed to fulfil the maintenance requirement are taxed at the general tax rate (which is 28% for fiscal year 2015 and 25% for fiscal year 2016 and onwards). However, the company will be subjected to a 19% special tax rate on the dividends distributed to shareholders owning a participation of at least 5%, when such dividends are exempt or taxed under a 10% rate at the shareholder level, unless the shareholder is another SOCIMI.

Dividends and other profits distributed by SOCIMI, whether listed or not, are subject to the corresponding withholding tax, regardless of the nature of the shareholder (individuals, legal entities, resident or not). However, from 2014, no withholding tax is due when the shareholder is another SOCIMI.

For over 30 years we have helped companies doing business in Spain and LATAM. For us you are not just one of the bunch, we are experts on bespoke solutions. We advice companies and entrepreneurs on corporate, mergers & acquisitions, finance law, contracts, taxation, transfer pricing, compliance, IP and labor law.
We are lawyers & tax advisors in Málaga, Madrid, Chile, Perú, El Salvador, United Kingdom and Switzerland offering quick solutions and expert advice. We are able to advise in more than 50 countries. At Evolutiza Abogados & Asesores Tributarios we all work for your business to be the key piece of  the big jigsaw.
Call us to  0034 911 697 113 or email us to

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