Holding Companies in SpainUpdated on Friday 25th November 2016
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A holding company designates a legal entity that is registered for the sole purpose of controlling the assets of other larger or smaller companies. A holding company in Spain can be considered a parent - company for other legal entities, as it owns voting rights in the respective companies to an extent to which the holding company has the legal right to control the management and investment policies carried out by the other companies. A holding company is differentiated by other types of companies in Spain as it can’t undertake commercial activities. Our team of Spanish lawyers can offer legal assistance on the main provisions related to a holding company in Spain.
Spain, an attractive market for holding companies
Foreign investors are welcomed to register a holding company in Spain, as the country represents one of the most attractive jurisdictions for the domiciliation of this type of entity. Spain is one of the top countries which implemented a very attractive fiscal system for holding companies, that can be compared with the one available in other major financial centres, such as Luxembourg or Belgium.
ETVE in Spain
Holding companies registered in Spain are named Entidad de Tenencia de Valores Extranjeros (ETVE). The name stands for “holding company of foreign participation".
A holding company set up here can control other companies operating in Spain, as well as companies registered in another country.
An ETVE in Spain can be set up under one of the following legal entities:
• limited liability company;
• public limited company.
It is important to know that the Spanish holding company can benefit from numerous tax exemptions, which makes this entity very appealing. There are several conditions that must be fulfilled in this sense and our team of lawyers in Spain can provide more details.
Tax exemptions for Spanish ETVE
Because the holding company is registered under one of the above mentioned legal entities, the company will be liable to corporate tax, but there are several tax exemptions applicable in this case.
A Spanish holding company is exempt from:
• taxation on qualified foreign source dividends;
• taxation of capital gains deriving from foreign sources;
• the distribution of profits to the company’s foreign shareholders is not taxed in Spain.
Businessmen can find out more details on the Spanish holding company from our law firm in Spain. Please contact our attorneys for legal advice.