What is an ETVE?
The ETVE (Entidad de Tenencia de Valores Extranjeros) is a Spanish company subject to Spanish corporation tax (at a rate of 30%) on its Spanish trading income, but exempt from taxation on qualified foreign-source dividends and capital gains.
Why are ETVEs attractive?
Tax benefits play a large part, but there are other reasons why ETVEs can be such an Interesting tool:
- Spain has entered into an array of tax treaties with more than 70 countries. These include most countries in the American continent: Canada, USA, Mexico, Cuba, Jamaica, El Salvador, Colombia, Venezuela, Ecuador, Brazil, Bolivia, Argentina, Chile. (Treaties with Costa Rica, Peru and Uruguay have been signed but are not yet in force).
- Spain has signed Bilateral Investment treaties with many Central and South American countries that protect Spanish investments stating that they cannot be treated worse than domestic investments.
What are the main tax benefits?
- No corporate income tax on dividend income received.
- No capital gains tax on the sale of shares in qualifying non-resident Subsidiaries.
- No withholding tax on outgoing dividends subject to the following requirements:
Dividends are distributed out of exempt dividends or capital gain obtained by the ETVE from qualifying subsidiaries. Dividends are paid to a non-resident individual or entity; The recipient is not a resident of a tax haven jurisdiction. - No taxation of inbound dividends subject to the following requirements:
Qualifying subsidiaries must be foreign resident entities outside of tax haven jurisdictions, subject to domestic tax and carry out business activities; The ETVE must hold, directly or indirectly, a 5% participation in the non-resident subsidiaries or it must have an acquisition cost of at least 6 million euros. This participation must be held for an uninterrupted period of at least 12 months. - Extension of no withholding on distributions of profits from permanent establishments. A recent binding ruling extended 0% dividend withholding tax to distributions made by an ETVE out of the profit generated by its US financing branch.
Other features
- Losses derived from the transfer of a participation in a non-resident subsidiary are tax deductible (limitations apply to participations acquired from a company of the same group).
- Capital gains arising from a transfer of ETVE participations by a foreign shareholder are exempt if the gains derive from retained earnings which come from exempt dividends and capital gains obtained from qualifying subsidiaries (if the transferor is not resident in a tax haven jurisdiction).
- Cash contributions are subject to Stamp duty at a rate of 1%; contributions in kind may not be subject to it.
Expand Your Business with Us
The Spanish Entidad de Tenencia de Valores Extranjeros (ETVE) is one of the most powerful tools available for international investors seeking tax efficiency, legal certainty, and global reach. By combining exemptions on foreign-source dividends, capital gains, and distributions with Spain’s extensive tax treaty network, ETVEs provide a unique platform for structuring multinational operations. For companies with subsidiaries across Latin America, the U.S., and beyond, an ETVE offers unmatched advantages—ensuring that profits can flow freely, legally, and with minimal taxation.
At Open a European Company, we help investors and corporations take full advantage of the Spanish ETVE regime. Our team works with expert Spanish lawyers, accountants, and business consultants who understand the nuances of tax law, compliance requirements, and treaty benefits. Whether you’re structuring a holding company, expanding into Europe, or optimizing cross-border investments, we provide the guidance and local expertise to maximize results.
Spain’s ETVE structure is an opportunity too valuable to overlook. Begin your journey today with our Company Formation in Spain services and secure a holding structure that gives your business lasting international strength.
