The holding company in Spain is a legal entity that administers holdings in other companies and/or foreign subsidiaries. Usually this type of company does not have other economic activities apart from managing and organizing resources in other legal entities. However, holding companies that wan to perform other business activities can do so if they notify the relevant Spanish authorities of their actions.
Our company registration agents in Spain can help you open a holding company and manage this type of entity. In Spain, a holding company is called Entidad de tenecia de valores extranjeros.
Benefits of a Spanish holding company
The Spanish holding company is incorporated as any other type of business entity. It can take the form or a private limited liability company or a public limited liability company. The required minimum share capital and minimum number of shareholders and directors depend on the chosen type of company to form a holding. The required capital is larger for a public limited company than for a private one.
More details on the Spanish holding company are available in the video below:
The Spanish holding company benefits from certain tax exemptions for the received income (dividend and capital gains) if certain conditions are met. Also, the holding company has access to the reduced withholding tax rates from the double tax treaties signed by Spain and other countries.
Holding company taxation regime in Spain
Dividends and capital gains derived from a foreign source and paid to non-resident companies by a holding company are exempt from the withholding tax only if the recipient is not located in a tax haven. Dividends paid by a Spanish holding company to its parent company abroad do not have a withholding tax imposed on them in Spain.
Because it is a member of the European Union, Spain observes the provisions of the EU Parent-Subsidiary Directive. This means that if a Spanish holding owns at least 10% of the shares in an EU subsidiary for at least one year, dividends received by the holding from the subsidiary are exempt from the withholding tax. A Spanish holding company still has to observe the corporate income tax on its worldwide income.
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