The Spanish Holding Company

Overview Related Resources Spain Key Elements



The ETVE (Entidad de Tenencia de Valores Extranjeros) is a regular Spanish company which falls within the scope of general tax law and therefore benefits from the double taxation treaties and the European tax directives.

Its object is to administer and manage participations in non-resident entities.

Legal Form

An ETVE company can be constituted either as a “sociedad de responsabilidad limitada” (private limited company- SRL) or a “sociedad anónima” (public limited company- SA).


The minimum share capital for incorporation of an ETVE is €3.006 for a private limited company and €60.121 for a public limited company.

For a company incorporated as a private limited company the share capital must be fully paid up, while for companies incorporated as public limited companies only a minimum of 25% of the share capital must be paid up.


An ETVE is fully subject to tax on its worldwide income at a normal rate of 30%.

Companies with yearly sales of less than €8 million may qualify for certain tax incentives:

  • A tax rate of 25%, applicable on the first €120,202 of taxable income
  • Accelerated depreciation of certain fixed assets.
  • A 10% tax credit for investments and expenses in internet, information technology and communications.


Corporate income tax is charged on the annual financial statements prepared under generally accepted accounting principles subject to adjustments.

Dividends Exemption

As a member of the EU Spain is governed by the provisions of the EU’s parent/Subsidiary directive with the effect that where a Spanish Holding Company holds a minimum of 5% of the shares of the EU subsidiary for a period of not less than one year any dividends remitted by the EU subsidiary to the Spanish Holding Company are free of withholding taxes.

Shares to have been held for a minimum of one year.

The subsidiary must be:

  • A non-resident corporate entity with no business activity in Spain.
  • Subject to a similar corporate tax system to Spain.
  • Not resident in a country blacklisted by the Spanish Tax Authorities.
  • The income received by the ETVE must be from profits earned from core corporate activities and not from passive income.
Capital Gains Exemption

Capital gains from the sale of shares are exempt from tax if the same conditions that apply to dividends are met.

Interest and Royalties

See income above.

Some Advantages of the ETVE

Besides the common advantages of a holding company, the ETVE may also enjoy from the following:

Exemption from Withholding Tax on Payment of Dividends

Dividends and capital gains from foreign source paid to non-residents by an ETVE are exempt from withholding tax provided the recipient is not located in a tax haven.

Outgoing dividends paid by an ETVE to its non-resident parent company are free of withholding taxes in Spain.

The standard rate of withholding tax for non qualifying companies is 19% on outgoing dividends unless a double tax treaty applies which will reduce the rate from between 5% and 15%.

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Double Tax Treaties

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Legal Form: Private limited company (SRL) Public limited company (SA)
Minimum Subscribed Capital: €60,121 (SA)
€30,006 (SRL)
Minimum Paid-Up Capital: €15,025 (SA)
€3,006 (SRL)
Number of Shareholders: 1 (SA)
1 (SRL)
Type of Shares: Registered
Substance Requirements: Yes
Capital Duty: 1%
Net Worth Tax: 0%
Corporate Income Tax: 30%
Double Tax Treaties: 70+
Dividends Exemption: 100%
Holding Requirements: 5% for 1 year and €6M acquisition cost
Capital Gains Exemption: Yes
Holding Requirements: 5% for 1 year and €6M acquisition cost
Tax Credit: Yes
Relief of Losses: Carry forward 15 years
CFC Rules: Yes
Debt-to-Equity Ratio: 3:1
Withholding Taxes
Dividends: EU Parent Co- 0%2
Treaty Countries- 0%-15%
Others- 19%
Interest: EU Parent Co- 0%2
Treaty Countries- 0%-15%
Others- 19%
Royalties: EU Parent Co- 0%2
Treaty Countries- 0%-15%
Others- 25%
Liquidation: Nil

1Losses carry forward may only be offset against 75% of the profits of the year.

2If conditions are met.

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