ETVE: your holding company in Spain for investing in Latin America and worldwide

What an ETVE is and why our clients choose it

An ETVE is an ordinary Spanish company (S.L. or S.A.) that opts into a special regime under the Spanish Corporate Income Tax Act. It holds shares in companies in other countries and, if it meets the requirements, offers three advantages:

• 95 % exemption on dividends and capital gains from its foreign subsidiaries: in practice, an effective tax rate of around 1.25 %.
• No Spanish withholding tax on dividends paid to non-resident shareholders out of that income.
• No Spanish tax on the part of the gain on a sale of the holding company that corresponds to that income and to the value of the foreign subsidiaries.

It is a well-established regime, in force in Spain since 1995. It is not a tax haven: the ETVE pays its taxes and files its accounts in Spain.

Designed for entrepreneurs and families from Latin America

Many of our ETVE clients are entrepreneurs and families from Latin America. They choose Spain because:

• They share its language and legal culture. We work in Spanish, English, French and Dutch.
• Spain has double tax treaties with most countries in the region (Mexico, Colombia, Chile, Argentina, Brazil, Ecuador, Costa Rica, Panama, Uruguay, the Dominican Republic and Paraguay, among others) and investment protection agreements with many of them.
• An ETVE is a gateway to Europe and a stable base from which to organise the group, bring in partners and plan succession.
• A holding company that already exists in another country, for example in Panama, can move its registered office to Spain without being wound up.

We coordinate with your local advisers so that the Spanish tax saving is not lost in the shareholders' country of residence.

What we do

• Preliminary review of the group, the shareholders and the countries involved, including their controlled foreign company rules.
• Incorporation of a new ETVE or acquisition of an existing company.
• Contribution of the shares in the foreign subsidiaries to the ETVE.
• Redomiciliation to Spain of a foreign holding company.
• Articles of association, board and Spanish bank account, and notification of the election for the regime to the Spanish tax authorities.
• Substance: designing the human and material resources required by law, in proportion to the size of the group, and an annual file that evidences them.
• Ongoing maintenance: shareholders' and board meetings, minutes, annual accounts, tax returns and dividend distributions.
• Restructurings and sales: partners joining or leaving, sale of subsidiaries or of the holding company itself.

How we work

1. A free initial meeting with René Dechamps Azanza, founding partner of the firm, in Madrid or by video call.
2. A written proposal, in phases, with a fixed fee for each phase.
3. Set-up of the ETVE, with a clear timetable and coordination of notaries, registries and banks.
4. Annual support so that the company complies and can prove it.

Useful initial documents

For an initial assessment it helps to have:

• A group chart: companies, countries and shareholdings.
• Each shareholder's country of tax residence.
• What you want to achieve: reinvest, distribute dividends, bring in partners, sell or plan succession.
• If you already have a holding company in another country, its articles of association and latest accounts.

Frequently asked questions

Do I have to live in Spain to have an ETVE?
No. The shareholders can live in any country that is not a non-cooperative jurisdiction. What must be in Spain is the real management of the company.

Is a shell company enough?
No. The law requires the ETVE to genuinely manage its shareholdings from Spain, with proportionate resources. This is what the Spanish tax authorities check most closely, and what we pay most attention to.

Can I move a holding company I already have abroad to Spain?
Yes, if the country of origin allows it. The company keeps its legal personality and can then elect for the ETVE regime.