Relocation to Spain under Beckham law?

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HelloFreeLiving

New member
I've found a few threads on the forum about Spain and the Beckham law, but curious since my situation seems to be a bit different.

I'm an entrepreneur with different private equity interests in profitable private businesses in a smaller EU country. These have been built up over the last 5+ years. Management is outsourced and I'm not really involved in the day-to-day, just strategy. My country of residence has no exit tax. My wife and I are considering relocating to a country around the mediterranean, with Spain being our preferred destination from a lifestyle PoV. She is a Spanish citizen with dual citizenship.

I'm aware Malta and especially Cyprus seem to offer better tax benefits, but they are further away and less connected to the rest of Europe and the world (e.g. harder to take a short flight to Paris, London, etc).

Does anyone have experience basing themselves in Spain, as a self employed person / entrepreneur, for the duration of the Beckham law? We would likely base ourselves in Barcelona for the 6 years and then depart.

Professionally, I will eventually be able to exit my equity interests tax free through my holding company (holding company enjoys participation exemption on gains). Right now most of my 'consulting' income from these businesses (about mid 6 figures/year) is invoiced into a personal management company, in our country of residence, from which I draw dividends. Our net tax is about 35%.

Is it possible to set up a management company (in Spain) and re route these management fees into said company, and have them paid out under the Beckham law to me personally?

My thought would be to set up a Spanish entity to put myself within the application of the law, but where I own, say, 20% of the equity. Does the Spanish tax code contain any avoidance provisions against this? I'm aware the Spanish hacienda seems to be trigger happy when it comes to tax investigations..

Aside from these interests I have a broad (low risk) investment portfolio in Irish based ETFs that pay out dividends which are exempt from withholding tax. Given our current tax rate is about 35%, I honestly don't care so much about the reduction to 24%. But I do care about the exemption from the local wealth tax, and the exemption on foreign capital gains and dividends.

Thoughts welcome! (But please, no random "avoid Spain" quotes. :D). No crazy things -- I do everything legitimately and above board. Obscurity is not a strategy.

I will consult a tax lawyer in both my country of residence and Spain, but doesn't hurt to check.
 

HelloFreeLiving

New member
Tax isn't the main driver for relocating. But our current location of residence just does not offer enough sunshine. Spain is more native and would be easiest for my wife, who speaks Spanish and perfect English. We also spend part of the year in Latin America (wife's second citizenship, non resident)
 

JohnnyDoe

Mentor Group Gold
Tax isn't the main driver for relocating. But our current location of residence just does not offer enough sunshine. Spain is more native and would be easiest for my wife, who speaks Spanish and perfect English. We also spend part of the year in Latin America (wife's second citizenship, non resident)
Interesting. So you are looking for sunshine and a Spanish speaking country. Did you consider the Dominican Republic?
 

HelloFreeLiving

New member
We're looking for a sunny country within Europe (main residence will stay in Europe), preferably where they speak Spanish. :) We have already spent much time on various islands in the Caribbean and those are not particularly exciting to us.
 

JohnnyDoe

Mentor Group Gold
We're looking for a sunny country within Europe (main residence will stay in Europe), preferably where they speak Spanish. :) We have already spent much time on various islands in the Caribbean and those are not particularly exciting to us.
So if you are looking for an European country where Spanish is spoken and it’s sunny and warm, it can only be Spain. Good luck with it.
 

marzio

Mentor Group Gold
A Gibraltar holding company would suit you best.

Zero tax on foreign income as well as zero tax on dividends that you pay yourself from that foreign income.

Yes, technically they speak english but in less than 1 hour you are in Marbella.
 
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GeneralGogol

New member
Spain is a tax hell, do not ever relocate there officially.

Plenty of sunny places that are tax havens or very close to it, even in Europe. You can spend time in Spain in the summer but if you officially become a resident there you're playing with fire.

It has been discussed multiple times on this forum. I bet Shakira regrets ever spending more than 180 days a year in Spain and if she knew that she'd face jail she would've locked herself up in her Bahamas house and never leave.

Don't be stupid. Come to Spain on vacation but never officially move to a tax hell.
 

JohnnyDoe

Mentor Group Gold
Spain is a tax hell, do not ever relocate there officially.

Plenty of sunny places that are tax havens or very close to it, even in Europe. You can spend time in Spain in the summer but if you officially become a resident there you're playing with fire.

It has been discussed multiple times on this forum. I bet Shakira regrets ever spending more than 180 days a year in Spain and if she knew that she'd face jail she would've locked herself up in her Bahamas house and never leave.

Don't be stupid. Come to Spain on vacation but never officially move to a tax hell.
The guy says he doesn’t care :oops:
Some people like to play with fire.
 

blockchain4ever

Active Member
I've found a few threads on the forum about Spain and the Beckham law, but curious since my situation seems to be a bit different.

I'm an entrepreneur with different private equity interests in profitable private businesses in a smaller EU country. These have been built up over the last 5+ years. Management is outsourced and I'm not really involved in the day-to-day, just strategy. My country of residence has no exit tax. My wife and I are considering relocating to a country around the mediterranean, with Spain being our preferred destination from a lifestyle PoV. She is a Spanish citizen with dual citizenship.

I'm aware Malta and especially Cyprus seem to offer better tax benefits, but they are further away and less connected to the rest of Europe and the world (e.g. harder to take a short flight to Paris, London, etc).

Does anyone have experience basing themselves in Spain, as a self employed person / entrepreneur, for the duration of the Beckham law? We would likely base ourselves in Barcelona for the 6 years and then depart.

Professionally, I will eventually be able to exit my equity interests tax free through my holding company (holding company enjoys participation exemption on gains). Right now most of my 'consulting' income from these businesses (about mid 6 figures/year) is invoiced into a personal management company, in our country of residence, from which I draw dividends. Our net tax is about 35%.

Is it possible to set up a management company (in Spain) and re route these management fees into said company, and have them paid out under the Beckham law to me personally?

My thought would be to set up a Spanish entity to put myself within the application of the law, but where I own, say, 20% of the equity. Does the Spanish tax code contain any avoidance provisions against this? I'm aware the Spanish hacienda seems to be trigger happy when it comes to tax investigations..

Aside from these interests I have a broad (low risk) investment portfolio in Irish based ETFs that pay out dividends which are exempt from withholding tax. Given our current tax rate is about 35%, I honestly don't care so much about the reduction to 24%. But I do care about the exemption from the local wealth tax, and the exemption on foreign capital gains and dividends.

Thoughts welcome! (But please, no random "avoid Spain" quotes. :D). No crazy things -- I do everything legitimately and above board. Obscurity is not a strategy.

I will consult a tax lawyer in both my country of residence and Spain, but doesn't hurt to check.
I talked to a tax lawyer about this a few years back, and he basically said that in Spain there is quite a lot of interpretations of the law, so you can't assume it works the way it is written.

For example, a "management company" doesn't work in Spain he said. You need significant offices and a significant staff. You need to do stuff that "makes sense". It is completely different to what you would expect in the UK for example. So if you do things that follows the letter of the law, but not the spirit, it won't work. At least that's how I understood it.

Also, he told me, what everybody does is this: You let your wife move to Spain, but you don't relocate yourself. For the extreme rare case where you will be stopped by the police, you will show a ticket that is less than 90 days old that you entered the country as you cannot stay for more than 90 days. I assume you are allowed to move freely within Schengen. Personally you keep residence in a low tax jurisdiction.
 

Konstanz

Entrepreneur
Have you considered moving to Andorra? It's Spanish speaking country. Barcelona is 3hours drive.
tax is 10% , but n theory you can avoid and pay 0%. They don't have CFC etc..
At the same time you can spend much time in Spain being Andorra resident.
 

JohnnyDoe

Mentor Group Gold
Have you considered moving to Andorra? It's Spanish speaking country. Barcelona is 3hours drive.
tax is 10% , but n theory you can avoid and pay 0%. They don't have CFC etc..
At the same time you can spend much time in Spain being Andorra resident.
Andorra doesn’t have “enough sunshine” for OP
 

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