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Buying property in spain through a company

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756,000
* €/m2
Spanish Property Ownership through Corporate Structures
221 m2 | 8 bedrooms | 3 bathrooms | Furnished | Parking place | Swimming-pool | Gardens
Buying a Property in Spain through a Limited Company offers advantages worth studying; learn the do's and don'ts in Spanish Property Law. Owning properties in Spain through limited companies can be an expensive exercise and expert advice should be sought prior to purchasing a property through. Buying a Property through a Spanish S.L. Company. We will assume that a non-​resident intends to buy a property in Mallorca (or else where in Spain) and wishes.

So what does the seller pay? Furthermore, the seller is liable to pay capital gains with certain allowances if the property was purchased before The question now is: who is in the better position when it comes to selling a resident or non-resident? So it is clearly more advantageous to sell as a resident — or take another route as a non-resident. In order to decrease the expenses in the sale of a property one of the best options is to set up a Spanish SL company Limited Company and purchase the property through this company.

If a Ltd. Then differences between this possibility and possibly inheriting a property owned by a non-resident can be huge depending upon the individual circumstances.

Finally one must point out that it is not always advisable to purchase a property through a Spanish SL Company, it is recommended when 2 circumstances come together: when the property has a value higher than Law firms in Spain will have no qualms incorporating a Spanish or foreign company i.

This is perfectly legal. They may even offer them off-the-shelf for a reasonable fee and additionally offer bookkeeping services. The company will then be placed on top of the Spanish real estate.

They will however, following new legislation, be reluctant understatement when it comes to devising and incorporating more complex corporate structures, specifically offshore ones. This fine red line marks the difference between tax avoidance legally acceptable tax planning and tax evasion criminally pursuable.

Affluent families have a mandate to preserve and accumulate wealth for future generations. Some corporate structures i. Scottish ancestral castle. So basically this law marked a turning point no longer allowing a fool-proof system that accommodated the warm mantle of anonymity i. Anonymity is now achieved, yes, but to a certain extent only, at a basic level, as it limits the exposure to third-party information requests.

However, it will remain glaringly visible to the Tax Office, or a judge, if needed be under this new law. Spanish lawyers and financial advisers are under great scrutiny and face stiff penalties, including severe jail terms, if found guilty on devising and collaborating in the set-up of tax avoidance structures. Every week we are treated with an unpleasant new story on how some prominent law firm or lawyer has been found guilty and charged.

For this reason alone Spanish lawyers and law firms in general are now highly reluctant to devise, assist, create or abet in any manner whatsoever such corporate structures. Much less to accept appointing themselves as administrators of said companies. It is open to debate. New treaties, such as the Double-Taxation Agreement with Spain dating from has been recently amended in London on the 14th of March in an attempt to plug existing holes.

Traditionally European countries had the onus of undergoing protracted and expensive multijurisdictional investigations requesting information on a particular individual or company from other European countries to which not all complied with or the information supplied was often scant, incomplete and outdated. This pilot scheme no longer requires the signatory countries to actively pursue the information; it is actually fed back to them on a regular basis automatically on a wide range of companies and individuals falling within certain parameters.

The possibilities this leads to on cross-referencing information are significant if done right. This creates a spectacular perverse incentive as now inspectors have truly a vested interested of their own in targeting tax avoiders. Some regions now incentivize and are more lenient, specifically on inheritance taxation, on having property under your own personal name rather than through structures which is being increasingly more taxed.

In light of the ongoing recession and high levels of unemployment some European countries, i. Spain, are cash-strapped and have become increasingly more aggressive pursuing tax offenders. Not exactly the best of times to be setting up structures to mitigate taxes really. Depending on the structure chosen this can range from several hundred euros a year for basic bookkeeping services to raking up dozens of thousands on more complex structures.

You really have to ask yourself, given your wealth level and coupled with the value of the underlying asset, if you can actually afford or even if it is worth your while engaging in huge annual running costs on the long run that may even come to negate altogether any tax mitigation sought.

So many scary stories over the years it is hard to list them all. When you relinquish control of your asset through a power of attorney in favour of a physical person or a company abroad you better be sure of what you are doing and ensure you are fully aware of the risks this entails that may lead your beneficiaries to lose control of the asset upon your death. Scaremongering, a time-proven sales tactic.

Car and insurance salesmen, in my experience, have always been top of the game at this because they know exactly what makes a customer tick.

I will try to cast away some of these widely held misconceptions. Only in the most extreme cases would you pay such a high amount. Also the beneficiaries of the bulk of the estate are normally children, not non-relatives which do not qualify for tax allowances. The significance this has is that the taxable base the k would then be split amongst the heirs dramatically reducing the IHT liability as it follows a sliding scale. To this you must also add the legal and family allowances both national and regional which reduce the percentage to be paid even further.

Also worth mentioning is the fact that the taxable base for property is well-below the true market value. On average couples have two children. Children are classified in Group I for inheritance taxation purposes. In other words, the state allowance completely offsets the inheritance tax liability meaning they pay nothing on inheriting in Spain in this example. On top of this there are autonomous regional allowances that children may benefit from.

When the surviving spouse passes away the same result will unfold again providing the laws are not changed.

In this particular case the inheritance liability would indeed sky rocket over a million. For this particular case I strongly advise obtaining an estimation on the inheritance tax the beneficiary stands to pay.

False Fact: Same as previous point. Selling a property would be exceptional. Moreover, you cannot inherit anything until you have first paid inheritance tax. Only once the tax duties have been settled and the property is lodged under the name of the beneficiary at the Land Registry is he free to sell on if he wishes as the property is now legally under his name to do with it as he pleases.

False Fact: Everyone inheriting in Spain would then be broke. Misleading Fact: Spouses indeed are not exempt from paying inheritance tax in Spain but they qualify for legal tax allowances.

If resident in Spain then the surviving spouse is entitled to further autonomous regional tax allowances. These allowances, both from the state and from the autonomous region where the property is located, may greatly reduce the burden. Misleading Fact: Scaremongers love quoting the extreme Clearly a problem affecting only a privileged few.

Not a problem that the vast majority of beneficiaries inheriting in Spain will have to contend with unless they are already multimillionaires. This falls outside Spanish inheritance tax. Likewise non-resident beneficiaries of a property located in Spanish territory also stand to pay Spanish inheritance tax ex art.

Spanish Criminal Code. And to close I would like to take the opportunity to dispel a malicious misunderstanding on misreading one of my articles: Making a Spanish will. But it is extremely useful to save your beneficiaries time, money and hassle at a time of bereavement. Without a Spanish will a beneficiary will normally incur in penalties and surcharges for late payment on inheritance in Spain.

UK probate, in my professional experience, always exceeds the six months deadline if there is no Spanish will. In which case penalties and surcharges are accrued and added to the inheritance tax for late payment. I hope this clarifies the misunderstanding. Another matter is if Spanish authorities do not get wind on the death of an owner who holds company shares, property or other assets. The statutory limitation of 4 years on all taxes, including Spanish Inheritance Tax, may kick in timing out the obligation to pay inheritance tax altogether — there is nothing the Tax Office can do after said time has elapsed to claim payment of inheritance tax from the beneficiaries.

397,000
* €/m2
The Olive Press News Contribution
268 m2 | 4 bedrooms | 6 bathrooms | Furnished | Parking place | Swimming-pool | Gardens
Buying a Property through a Spanish S.L. Company. We will assume that a non-​resident intends to buy a property in Mallorca (or else where in Spain) and wishes. Three considerations are most often cited as considerations for buying a property through a company in Spain: privacy, tax mitigation, and. Owning properties in Spain through limited companies can be an expensive exercise and expert advice should be sought prior to purchasing a property through.

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Laurence Dollimore Digital Editor - 28 May, The Olive Press is the English language newspaper for Spain. A campaigning, community newspaper, the Olive Press launched in and represents the huge and growing expatriate community in Spain — with over , printed copies monthly, 50, visitors a day online we have an estimated readership of more than , people a month.

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The war against international terrorism, unwaveringly led by the US, has meant intense pressure is exerted on the sources that finance it.

But even more fundamentally we have collectively assisted over the last decade not only to a change in laws but to a ground-breaking paradigm shift in social and moral values that no longer hold these structures as socially admissible as they are widely held in contempt by society and media at large i.

In fact, you will find many are even reluctant to the very idea and will likely try to dissuade you. It is mostly foreign companies which are not even law firms or FSA-regulated finance advisers! Spanish law firms located in Spain have been forced to take a back seat when it comes to offering and soliciting these legal services after new stringent legislation has been passed and tough obligations and controls have been set up across the board for lawyers and other professionals involved in their set up and administration.

Due to the enormous complexity of the matter, this article endeavours only to give a broad unbiased overview on the overall state of affairs, with particular focus in Spain, weighing in the pros and cons, albeit making no attempt whatsoever to delve in its complexity and most certainly being careful not to take stance on the matter one way or another.

Several reasons may lead owners to conceal who really owns, controls and disposes of assets. Broad examples of such needs:. One of the traditional reasons that drive clients to seek incorporating structures is to lower their tax bill. The latter is particularly efficient when shareholders are non-residents. These structures should ideally always be incorporated prior to acquiring the real estate asset, not after for optimum results. Corporate structures range from the most basic ones to really ingenious ones that border on fiscal engineering.

Law firms in Spain will have no qualms incorporating a Spanish or foreign company i. This is perfectly legal. They may even offer them off-the-shelf for a reasonable fee and additionally offer bookkeeping services. The company will then be placed on top of the Spanish real estate. They will however, following new legislation, be reluctant understatement when it comes to devising and incorporating more complex corporate structures, specifically offshore ones. This fine red line marks the difference between tax avoidance legally acceptable tax planning and tax evasion criminally pursuable.

Affluent families have a mandate to preserve and accumulate wealth for future generations. Some corporate structures i. Scottish ancestral castle. So basically this law marked a turning point no longer allowing a fool-proof system that accommodated the warm mantle of anonymity i.

Anonymity is now achieved, yes, but to a certain extent only, at a basic level, as it limits the exposure to third-party information requests. However, it will remain glaringly visible to the Tax Office, or a judge, if needed be under this new law. Spanish lawyers and financial advisers are under great scrutiny and face stiff penalties, including severe jail terms, if found guilty on devising and collaborating in the set-up of tax avoidance structures. Every week we are treated with an unpleasant new story on how some prominent law firm or lawyer has been found guilty and charged.

For this reason alone Spanish lawyers and law firms in general are now highly reluctant to devise, assist, create or abet in any manner whatsoever such corporate structures. Much less to accept appointing themselves as administrators of said companies. It is open to debate. New treaties, such as the Double-Taxation Agreement with Spain dating from has been recently amended in London on the 14th of March in an attempt to plug existing holes.

Traditionally European countries had the onus of undergoing protracted and expensive multijurisdictional investigations requesting information on a particular individual or company from other European countries to which not all complied with or the information supplied was often scant, incomplete and outdated.

This pilot scheme no longer requires the signatory countries to actively pursue the information; it is actually fed back to them on a regular basis automatically on a wide range of companies and individuals falling within certain parameters. The possibilities this leads to on cross-referencing information are significant if done right.

This creates a spectacular perverse incentive as now inspectors have truly a vested interested of their own in targeting tax avoiders. Some regions now incentivize and are more lenient, specifically on inheritance taxation, on having property under your own personal name rather than through structures which is being increasingly more taxed.

In light of the ongoing recession and high levels of unemployment some European countries, i. Spain, are cash-strapped and have become increasingly more aggressive pursuing tax offenders.

Not exactly the best of times to be setting up structures to mitigate taxes really. Depending on the structure chosen this can range from several hundred euros a year for basic bookkeeping services to raking up dozens of thousands on more complex structures. You really have to ask yourself, given your wealth level and coupled with the value of the underlying asset, if you can actually afford or even if it is worth your while engaging in huge annual running costs on the long run that may even come to negate altogether any tax mitigation sought.

So many scary stories over the years it is hard to list them all. When you relinquish control of your asset through a power of attorney in favour of a physical person or a company abroad you better be sure of what you are doing and ensure you are fully aware of the risks this entails that may lead your beneficiaries to lose control of the asset upon your death. Scaremongering, a time-proven sales tactic. Car and insurance salesmen, in my experience, have always been top of the game at this because they know exactly what makes a customer tick.

In this assumption the company is constituted by the owners of the house, therefore holding in the company an identical proportion of shares as they did in respect to the house. As a general norm, when is it convenient to acquire a property through a company? With our long experience in this field, we would advise you to buy a property through a Spanish company when the following circumstances apply: a co-habiting couples; when at the death of one, the other becomes the beneficiary, or in general investments of vast amounts of money where the future inheritance tax would be very high.

Who can be director of the company? The possible ways of administering a company are the following: a Sole director. There can be two or more. Any one can exercise the functions of administration and representation of the company. They must act jointly. The Statutes or the General Meeting, appoints the number of members of the Board, which must be at least three members and no more than twelve. Generally, a managing director is also elected.

A director can either be a partner or a non-partner. The director can also be another company. The company may also grant specific or general powers of attorney to third parties. Directors are named in the company constitution deed and the General Meeting can revoke them and name new administrators. It is possible to designate substitute directors in the case that the designated directors cease their duty.

The law does not order a specific term for the duration of the administrator office, generally the appointment is indefinite. In which cases is the monthly payment to the Social Security due by Directors of a company? If the sole purpose of the company is to own property or administer assets belonging to the partners and not to make business then there is no requirement for the director to enrol in the national social security.

In other cases, when for example you are partner or director of a company, you will be obliged to enter the social security system as self-employed in the following cases: a if you carry out direction or management duties that imply exercising the position of director of the company; b or if you provide a regular service to the company, directly and personally.

In both cases it is necessary for you to have the effective control of the company in the purpose of the Law. You may decide what quota you pay to the Social Security each month. What benefits does the Social Security provide you with if you are registered as self-employed? In general, and subject to legal circumstances you will enjoy: 1. What are the compulsory requirements of the limited companies? Companies must keep the following records: a Daily journal b Inventory and balance sheet c Shareholders' registry d Committee minutes e Register of contracts between sole shareholders and the company, in the case of an individual limited company.

Other records are needed for special cases. They must be registered in the Mercantile Registry, or later when the information is stored in computers. In the latter case, within four months since the accounting year ends. Also, the following documents must be deposited in the Mercantile Registry: a Annual Financial Statement, including -the balance sheet -profit and loss account -annual report b Management report only for big companies c Proposal of profit or loss application.

The director must present the accounts within 3 months from the end of the accounting year, and the Board must approve them within 6 months of the end of the accounting year. Once approved, the accounts must be deposited in the Mercantile Registry within one month of approval along with a certification of the profit or loss application.

How many taxes does the company pay in the acquisition of the property? The taxes that are paid in the acquisition of the property are independent of the type of the buyer company. If the vendor is a business person or company and the object up for sale is a plot, VAT on the price plus stamp duty special tax of the price will also have to be paid.

If the property for sale is a new house the VAT will be reduced rated plus stamp duty on the price; if it is a second-hand house resale , then the tax is the one on acquisition of property and the rate depends on where the property is. If the vendor is not in business, the buying company would only have to pay tax on transmission between individuals on the price, whatever the property. Aside from the purchase taxes there will be additional expenses: the Notary's expenses for the transaction of the deeds; the expenses for the registration of the property in the Land Registry; Lawyer's fees.

428,000
* €/m2
Owning Spanish property through a company – times have changed
247 m2 | 6 bedrooms | 8 bathrooms | Furnished | Parking place | Swimming-pool | Gardens
Three considerations are most often cited as considerations for buying a property through a company in Spain: privacy, tax mitigation, and. Buying property in Spain as an expat can be a confusing endeavor. Check the company exists; check online at albir-properties-for-sale.com.ru (Spanish First, the buyer makes an offer, usually through the seller's estate agent. Buying a Property in Spain through a Limited Company offers advantages worth studying; learn the do's and don'ts in Spanish Property Law.

The contract of sale escritura de compravento is usually signed in front of a notary, at which point the full sale price, taxes and other costs become due. The services of a notary are not legally necessary to complete the sale. But it is advisable and required by many mortgages. The seller is responsible for hidden defects in the property, even if they are not aware of them. However, in practice gaining restitution for such defects can be difficult and costly.

Paying the costs and taxes associated with buying a home can be completed by the buyer or their agent. The buyer is also responsible for registering the property. Following the crash, Spanish banks were reformed with significant IMF involvement.

This reduced the number of lenders in operation, and significantly increased the regulation and oversight of the industry. As a result, many banks began to lend less and mortgage rates and terms became less favourable. Mortgage lenders will not complete on a mortgage agreement until you own a property. The buyer usually pays the fees. They vary from region to region.

Many are negotiable — there are no fixed fees for lawyers or estate agents. Costs paid by the buyer include:. This is typically their only cost. Capital gains tax is paid on the profit of selling your home, i. You may be able to claim a reduction on the capital gains tax to account for inflation; or if you are purchasing another property in Spain; or if you are over 65 and have lived in the property as your main residence for more than three years.

Your residential status does not affect the application of capital gains tax either, as capital gains tax should be paid in Spain for property owned in Spain even if you are no longer a resident. Any lawyer practising in Spain should be registered with the local bar association Colegio de Abogados.

They will have a registration number that you can ask for and then verify with the bar association. Naturally, registration does not guarantee honesty or competence, but it is a good minimum standard to insist on. Many governments provide lists of lawyers and translators who speak both Spanish and another language.

The Spanish government also provides a list of accredited translators page in Spanish, follow first link in article text for up-to-date PDF. You may change your settings at any time. Your choices will not impact your visit. NOTE: These settings will only apply to the browser and device you are currently using. Search for:.

Buying property in Spain. Last update on May 21, The Spanish property market Spain suffered during the global financial crisis and ensuing property market crash.

Should you rent or buy in Spain? Can foreigners buy property in Spain? In order to decrease the expenses in the sale of a property one of the best options is to set up a Spanish SL company Limited Company and purchase the property through this company. If a Ltd. Then differences between this possibility and possibly inheriting a property owned by a non-resident can be huge depending upon the individual circumstances.

Finally one must point out that it is not always advisable to purchase a property through a Spanish SL Company, it is recommended when 2 circumstances come together: when the property has a value higher than Alternatively, we collaborate with excellent solicitors whom we can put you in touch and who will also give you best and up to date advice.

The Spanish tax authority has shown in the past it will not accept the use of a non-Spanish company to hold property in Spain purely to avoid succession tax — i. The Spanish authorities are using the register to scrutinise opaque structures, to be able to determine cases where the beneficial owner was actually using the property, but this was not accounted for correctly.

See more about global tax transparency. However, you can you often take steps to reduce your overall tax position, but you need to take personalised, specialist advice based on your situation and objectives. You need to establish the best plan of action for your circumstances. We can review your wealth management and how you hold your assets, to recommend ways to reduce your overall tax liability and make Spain a more tax-efficient place to live than you expect.

Contact your local adviser for a tax planning review. The tax rates, scope and reliefs may change. Any statements concerning taxation are based upon our understanding of current taxation laws and practices which are subject to change.

Tax information has been summarised; individuals should seek personalised advice. Download Guides. Buy Living In Books. Skip to main content.

310,000
* €/m2
Owning property in Spain through a limited company
197 m2 | 1 bedrooms | 2 bathrooms | Furnished | Parking place | Swimming-pool | Gardens
Can I buy a house in Spain through a company? Yes. Any company whose existence is recognised by its own law can operate in Spain acquiring properties. Buying property in Spain as an expat can be a confusing endeavor. Check the company exists; check online at albir-properties-for-sale.com.ru (Spanish First, the buyer makes an offer, usually through the seller's estate agent. Spanish Property Ownership through Corporate Structures. Advantages. 1. Concealing Ownership. Several reasons may lead owners to conceal.

Michael and Margaret mention that the company declares that it is not making any gain and that they pay little, or no, company tax.

We bring to their attention that Spanish tax authorities are carrying an aggressive policy against companies that merely own property in Spain. We advise them to act before the Spanish tax authorities contacts them.

The first step will be to carry out a valuation of the open market rental value of the property. The company will have to pay company tax on the deemed income from a shareholder who has the property at their disposal.

We will need to look at their tax position in detail before they are notified by the Spanish tax authorities. Owning properties in Spain through limited companies can be an expensive exercise and expert advice should be sought prior to purchasing a property through these vehicles as there may be alternative, more tax efficient solutions.

False Fact: Same as previous point. Selling a property would be exceptional. Moreover, you cannot inherit anything until you have first paid inheritance tax. Only once the tax duties have been settled and the property is lodged under the name of the beneficiary at the Land Registry is he free to sell on if he wishes as the property is now legally under his name to do with it as he pleases.

False Fact: Everyone inheriting in Spain would then be broke. Misleading Fact: Spouses indeed are not exempt from paying inheritance tax in Spain but they qualify for legal tax allowances. If resident in Spain then the surviving spouse is entitled to further autonomous regional tax allowances.

These allowances, both from the state and from the autonomous region where the property is located, may greatly reduce the burden. Misleading Fact: Scaremongers love quoting the extreme Clearly a problem affecting only a privileged few. Not a problem that the vast majority of beneficiaries inheriting in Spain will have to contend with unless they are already multimillionaires. This falls outside Spanish inheritance tax. Likewise non-resident beneficiaries of a property located in Spanish territory also stand to pay Spanish inheritance tax ex art.

Spanish Criminal Code. And to close I would like to take the opportunity to dispel a malicious misunderstanding on misreading one of my articles: Making a Spanish will. But it is extremely useful to save your beneficiaries time, money and hassle at a time of bereavement. Without a Spanish will a beneficiary will normally incur in penalties and surcharges for late payment on inheritance in Spain.

UK probate, in my professional experience, always exceeds the six months deadline if there is no Spanish will. In which case penalties and surcharges are accrued and added to the inheritance tax for late payment. I hope this clarifies the misunderstanding.

Another matter is if Spanish authorities do not get wind on the death of an owner who holds company shares, property or other assets. The statutory limitation of 4 years on all taxes, including Spanish Inheritance Tax, may kick in timing out the obligation to pay inheritance tax altogether — there is nothing the Tax Office can do after said time has elapsed to claim payment of inheritance tax from the beneficiaries.

In the particular case of a non-resident in Spain it is extremely difficult for the Spanish Tax Office understatement to know if and when they have passed away; unless of course his beneficiaries take to pro-actively inform the Spanish tax authorities… or for that matter their bank in Spain; which also has the legal obligation to disclose the death to the tax office.

Generalisations are often dangerous and even more so on this delicate matter. The only sound advice that can be given is that a case-by-case study is required before any decision can reasonably be taken. Each client has different needs which evolve over time so structures may need to be changed to accommodate their changing needs i. It is not referring to the value of the underlying real estate, but the amount that each beneficiary stands to inherit from the estate. Also note that the taxable base, when referring to property itself, is normally well-below the current market value of the property; it is not an up-to-date property appraisal.

This whopping difference that makes a beneficiary pay times more in one region than another on the same estate is explained because autonomous regions in Spain are empowered to rule on inheritance tax. Because the taxable base would now be split between the three of them, thus reducing the attraction of the IHT rate band which follows a sliding scale.

After legal and family allowances kick in there will be very little IHT to pay by each beneficiary not making it really worthwhile to incorporate a structure and to pay annual running maintenance fees for bookkeeping services and tax compliance purposes.

Not to mention that potential buyers normally refuse buying real estate locked up in holding structures out of fear of non-disclosed debts and hidden liabilities. A due diligence must normally be carried out prior to acquiring a company holding real estate to rule off such legal risks. To sell on a property, the vendor is normally required to first unwind the holding company inheritors stand to pay for this at a great expense to actually sell the underlying real estate itself.

Non-resident beneficiaries unfortunately do not benefit as much as those holding resident status when it comes to legal allowances to reduce the IHT taxable base as the applicable law is the state law which is less lenient than regional tax allowances available only to residents.

Admittedly non-residents unfortunately, and unjustly, still do not qualify to opt for the full range of tax allowances that residents are entitled to. The EU is looking into this as it is tantamount to discrimination with fellow EU member nationals — unacceptable.

Truth is that corporate structures are neither needed nor recommended for the vast majority of people. Please note the information provided in this article is of general interest only and is not to be construed or intended as substitute for professional legal advice. This article may be posted freely in websites or other social media so long as the author is duly credited. Plagiarizing, whether in whole or in part, this article without crediting the author may result in criminal prosecution.

All rights reserved. With offices in London and Madrid, we specialise in representing and acting for foreign clients in Spain. We have successfully represented hundred of foreign clients on matters related to conveyancing, property and bank negotiations, mediation and litigation with Spanish banks, off plan deposit claims, and Spanish tax. So what does the seller pay?

Furthermore, the seller is liable to pay capital gains with certain allowances if the property was purchased before The question now is: who is in the better position when it comes to selling a resident or non-resident? So it is clearly more advantageous to sell as a resident — or take another route as a non-resident. In order to decrease the expenses in the sale of a property one of the best options is to set up a Spanish SL company Limited Company and purchase the property through this company.

696,000
* €/m2
130 m2 | 1 bedrooms | 6 bathrooms | Furnished | Parking place | Swimming-pool | Gardens
Owning properties in Spain through limited companies can be an expensive exercise and expert advice should be sought prior to purchasing a property through. Buying a Property in Spain through a Limited Company offers advantages worth studying; learn the do's and don'ts in Spanish Property Law. The words 'company-owned property' were quite popular among the buyers of Spanish residential property, especially having “tax haven”.

If the sole purpose of the company is to own property or administer assets belonging to the partners and not to make business then there is no requirement for the director to enrol in the national social security.

In other cases, when for example you are partner or director of a company, you will be obliged to enter the social security system as self-employed in the following cases: a if you carry out direction or management duties that imply exercising the position of director of the company; b or if you provide a regular service to the company, directly and personally. In both cases it is necessary for you to have the effective control of the company in the purpose of the Law.

You may decide what quota you pay to the Social Security each month. What benefits does the Social Security provide you with if you are registered as self-employed? In general, and subject to legal circumstances you will enjoy: 1. What are the compulsory requirements of the limited companies? Companies must keep the following records: a Daily journal b Inventory and balance sheet c Shareholders' registry d Committee minutes e Register of contracts between sole shareholders and the company, in the case of an individual limited company.

Other records are needed for special cases. They must be registered in the Mercantile Registry, or later when the information is stored in computers. In the latter case, within four months since the accounting year ends. Also, the following documents must be deposited in the Mercantile Registry: a Annual Financial Statement, including -the balance sheet -profit and loss account -annual report b Management report only for big companies c Proposal of profit or loss application.

The director must present the accounts within 3 months from the end of the accounting year, and the Board must approve them within 6 months of the end of the accounting year. Once approved, the accounts must be deposited in the Mercantile Registry within one month of approval along with a certification of the profit or loss application.

How many taxes does the company pay in the acquisition of the property? The taxes that are paid in the acquisition of the property are independent of the type of the buyer company.

If the vendor is a business person or company and the object up for sale is a plot, VAT on the price plus stamp duty special tax of the price will also have to be paid.

If the property for sale is a new house the VAT will be reduced rated plus stamp duty on the price; if it is a second-hand house resale , then the tax is the one on acquisition of property and the rate depends on where the property is.

If the vendor is not in business, the buying company would only have to pay tax on transmission between individuals on the price, whatever the property. Aside from the purchase taxes there will be additional expenses: the Notary's expenses for the transaction of the deeds; the expenses for the registration of the property in the Land Registry; Lawyer's fees.

When can a company apply for a refund for the VAT paid on the purchase of a property? When property is bought by a holding company or a company is made up for the mere enjoyment of property, the company cannot reclaim VAT on the property.

To deduct the VAT a company must have a business- effective activity and furthermore, this activity must accrue VAT as a pre-condition to later have the right to deduct the VAT. If the company sells the property before ten years, the deducted VAT must be returned to the Inland Revenue pro rata with the years the company has enjoyed the property.

What is the taxation of a company for the mere enjoyment of a property? For small and medium holding companies not incurring into business they will pay the general rate on profits.

What is the taxation of the shareholder of a sleeping company? In the case of sale of shares, when the vendor is an individual the capital gain will be considered as the difference between the selling value- with legal limitations in the assessment of the value- and the cost of holding the shares. When the vendor of the shares is a corporation, the capital gain will be calculated according to the general rules of Corporation Tax.

Dividends paid to individuals or companies domiciled in countries with a non-tax agreement with Spain are taxed at general rate of profit on capital for non residents. How much does the company pay if it rents the property? General tax. All expenses will be considered costs. Amongst others there are: -paid interests for purchasing the property -local taxes and surcharges -doubtful income balances under specific legal circumstances -personal services -expenses to repair and conserve the property -balance sheet property depreciation.

When is the corporation tax paid? When must corporate tax be paid? The corporate income tax return must be presented within 25 days of the termination of a period of 6 months from the end of the tax year. Make this an anonymous donation. Sign in Join.

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Get help. Create an account. Olive Press News Spain. Residents in Phase 2 provinces throughout Spain can renew their ID…. Spain begins longest official national mourning in its democracy after almost…. See more about global tax transparency. However, you can you often take steps to reduce your overall tax position, but you need to take personalised, specialist advice based on your situation and objectives.

You need to establish the best plan of action for your circumstances. We can review your wealth management and how you hold your assets, to recommend ways to reduce your overall tax liability and make Spain a more tax-efficient place to live than you expect. Contact your local adviser for a tax planning review. The tax rates, scope and reliefs may change. Any statements concerning taxation are based upon our understanding of current taxation laws and practices which are subject to change.

Tax information has been summarised; individuals should seek personalised advice. Download Guides. Buy Living In Books. Skip to main content. Owning Spanish property through a company — times have changed.

You are here: Home Owning Spanish property through a company — times have changed.

859,000
* €/m2
217 m2 | 3 bedrooms | 1 bathrooms | Furnished | Parking place | Swimming-pool | Gardens
Can I buy a house in Spain through a company? Yes. Any company whose existence is recognised by its own law can operate in Spain acquiring properties. Owning properties in Spain through limited companies can be an expensive exercise and expert advice should be sought prior to purchasing a property through. Buying property in Spain as an expat can be a confusing endeavor. Check the company exists; check online at albir-properties-for-sale.com.ru (Spanish First, the buyer makes an offer, usually through the seller's estate agent.

If a Ltd. Then differences between this possibility and possibly inheriting a property owned by a non-resident can be huge depending upon the individual circumstances.

Finally one must point out that it is not always advisable to purchase a property through a Spanish SL Company, it is recommended when 2 circumstances come together: when the property has a value higher than Alternatively, we collaborate with excellent solicitors whom we can put you in touch and who will also give you best and up to date advice.

The real estate experts at Balearic properties share their knowledge and experience of the real estate market in Mallorca As international property consultants. Then several tax fraud prevention laws passed in , and Today most people prefer to buy a property in their own name or with their own newly formed company and a full tax base for the cost of the property. Well, of course every rule has its exception and sometimes particular circumstances can make a company purchase more suitable and preferable for a buyer.

Buying a Spanish company has both its disadvantages unrealized tax, company administration costs, a professional audit as a must to avoid surprises, etc. In any case Drumelia Real Estate always recommends their clients who are interested in further or particular advice when having doubts, to consult with reputable lawyers. In other cases, when for example you are partner or director of a company, you will be obliged to enter the social security system as self-employed in the following cases: a if you carry out direction or management duties that imply exercising the position of director of the company; b or if you provide a regular service to the company, directly and personally.

In both cases it is necessary for you to have the effective control of the company in the purpose of the Law.

You may decide what quota you pay to the Social Security each month. What benefits does the Social Security provide you with if you are registered as self-employed? In general, and subject to legal circumstances you will enjoy: 1. What are the compulsory requirements of the limited companies? Companies must keep the following records: a Daily journal b Inventory and balance sheet c Shareholders' registry d Committee minutes e Register of contracts between sole shareholders and the company, in the case of an individual limited company.

Other records are needed for special cases. They must be registered in the Mercantile Registry, or later when the information is stored in computers.

In the latter case, within four months since the accounting year ends. Also, the following documents must be deposited in the Mercantile Registry: a Annual Financial Statement, including -the balance sheet -profit and loss account -annual report b Management report only for big companies c Proposal of profit or loss application.

The director must present the accounts within 3 months from the end of the accounting year, and the Board must approve them within 6 months of the end of the accounting year. Once approved, the accounts must be deposited in the Mercantile Registry within one month of approval along with a certification of the profit or loss application.

How many taxes does the company pay in the acquisition of the property? The taxes that are paid in the acquisition of the property are independent of the type of the buyer company. If the vendor is a business person or company and the object up for sale is a plot, VAT on the price plus stamp duty special tax of the price will also have to be paid.

If the property for sale is a new house the VAT will be reduced rated plus stamp duty on the price; if it is a second-hand house resale , then the tax is the one on acquisition of property and the rate depends on where the property is. If the vendor is not in business, the buying company would only have to pay tax on transmission between individuals on the price, whatever the property.

Aside from the purchase taxes there will be additional expenses: the Notary's expenses for the transaction of the deeds; the expenses for the registration of the property in the Land Registry; Lawyer's fees. When can a company apply for a refund for the VAT paid on the purchase of a property? When property is bought by a holding company or a company is made up for the mere enjoyment of property, the company cannot reclaim VAT on the property.

To deduct the VAT a company must have a business- effective activity and furthermore, this activity must accrue VAT as a pre-condition to later have the right to deduct the VAT.

If the company sells the property before ten years, the deducted VAT must be returned to the Inland Revenue pro rata with the years the company has enjoyed the property. What is the taxation of a company for the mere enjoyment of a property? For small and medium holding companies not incurring into business they will pay the general rate on profits.

What is the taxation of the shareholder of a sleeping company? In the case of sale of shares, when the vendor is an individual the capital gain will be considered as the difference between the selling value- with legal limitations in the assessment of the value- and the cost of holding the shares. When the vendor of the shares is a corporation, the capital gain will be calculated according to the general rules of Corporation Tax.

Dividends paid to individuals or companies domiciled in countries with a non-tax agreement with Spain are taxed at general rate of profit on capital for non residents. How much does the company pay if it rents the property?

General tax. All expenses will be considered costs. Amongst others there are: -paid interests for purchasing the property -local taxes and surcharges -doubtful income balances under specific legal circumstances -personal services -expenses to repair and conserve the property -balance sheet property depreciation.

When is the corporation tax paid? When must corporate tax be paid? The corporate income tax return must be presented within 25 days of the termination of a period of 6 months from the end of the tax year. The tax year will be the company accounting period.

391,000
* €/m2
Dispelling Spanish Inheritance Tax Myths
281 m2 | 3 bedrooms | 8 bathrooms | Furnished | Parking place | Swimming-pool | Gardens
Spanish Property Ownership through Corporate Structures. Advantages. 1. Concealing Ownership. Several reasons may lead owners to conceal. Buying a Property in Spain through a Limited Company offers advantages worth studying; learn the do's and don'ts in Spanish Property Law. Can I buy a house in Spain through a company? Yes. Any company whose existence is recognised by its own law can operate in Spain acquiring properties.

Spanish Tax Office not having any information on the transfer of assets, even though the Capital Gains Tax was due. These deals are also in the past and no longer possible with the current tax legislation in force. Spanish Tax Authorities changed the tax laws and made the sale of companies owning properties much more complicated. Then several tax fraud prevention laws passed in , and Today most people prefer to buy a property in their own name or with their own newly formed company and a full tax base for the cost of the property.

Well, of course every rule has its exception and sometimes particular circumstances can make a company purchase more suitable and preferable for a buyer. Buying a Spanish company has both its disadvantages unrealized tax, company administration costs, a professional audit as a must to avoid surprises, etc.

In any case Drumelia Real Estate always recommends their clients who are interested in further or particular advice when having doubts, to consult with reputable lawyers. It is open to debate. New treaties, such as the Double-Taxation Agreement with Spain dating from has been recently amended in London on the 14th of March in an attempt to plug existing holes.

Traditionally European countries had the onus of undergoing protracted and expensive multijurisdictional investigations requesting information on a particular individual or company from other European countries to which not all complied with or the information supplied was often scant, incomplete and outdated. This pilot scheme no longer requires the signatory countries to actively pursue the information; it is actually fed back to them on a regular basis automatically on a wide range of companies and individuals falling within certain parameters.

The possibilities this leads to on cross-referencing information are significant if done right. This creates a spectacular perverse incentive as now inspectors have truly a vested interested of their own in targeting tax avoiders.

Some regions now incentivize and are more lenient, specifically on inheritance taxation, on having property under your own personal name rather than through structures which is being increasingly more taxed. In light of the ongoing recession and high levels of unemployment some European countries, i.

Spain, are cash-strapped and have become increasingly more aggressive pursuing tax offenders. Not exactly the best of times to be setting up structures to mitigate taxes really. Depending on the structure chosen this can range from several hundred euros a year for basic bookkeeping services to raking up dozens of thousands on more complex structures.

You really have to ask yourself, given your wealth level and coupled with the value of the underlying asset, if you can actually afford or even if it is worth your while engaging in huge annual running costs on the long run that may even come to negate altogether any tax mitigation sought.

So many scary stories over the years it is hard to list them all. When you relinquish control of your asset through a power of attorney in favour of a physical person or a company abroad you better be sure of what you are doing and ensure you are fully aware of the risks this entails that may lead your beneficiaries to lose control of the asset upon your death.

Scaremongering, a time-proven sales tactic. Car and insurance salesmen, in my experience, have always been top of the game at this because they know exactly what makes a customer tick. I will try to cast away some of these widely held misconceptions. Only in the most extreme cases would you pay such a high amount. Also the beneficiaries of the bulk of the estate are normally children, not non-relatives which do not qualify for tax allowances.

The significance this has is that the taxable base the k would then be split amongst the heirs dramatically reducing the IHT liability as it follows a sliding scale. To this you must also add the legal and family allowances both national and regional which reduce the percentage to be paid even further. Also worth mentioning is the fact that the taxable base for property is well-below the true market value. On average couples have two children.

Children are classified in Group I for inheritance taxation purposes. In other words, the state allowance completely offsets the inheritance tax liability meaning they pay nothing on inheriting in Spain in this example. On top of this there are autonomous regional allowances that children may benefit from. When the surviving spouse passes away the same result will unfold again providing the laws are not changed. In this particular case the inheritance liability would indeed sky rocket over a million.

For this particular case I strongly advise obtaining an estimation on the inheritance tax the beneficiary stands to pay. False Fact: Same as previous point. Selling a property would be exceptional. Moreover, you cannot inherit anything until you have first paid inheritance tax. Only once the tax duties have been settled and the property is lodged under the name of the beneficiary at the Land Registry is he free to sell on if he wishes as the property is now legally under his name to do with it as he pleases.

False Fact: Everyone inheriting in Spain would then be broke. Misleading Fact: Spouses indeed are not exempt from paying inheritance tax in Spain but they qualify for legal tax allowances. If resident in Spain then the surviving spouse is entitled to further autonomous regional tax allowances.

These allowances, both from the state and from the autonomous region where the property is located, may greatly reduce the burden. Misleading Fact: Scaremongers love quoting the extreme Clearly a problem affecting only a privileged few. Not a problem that the vast majority of beneficiaries inheriting in Spain will have to contend with unless they are already multimillionaires. This falls outside Spanish inheritance tax.

Likewise non-resident beneficiaries of a property located in Spanish territory also stand to pay Spanish inheritance tax ex art. Spanish Criminal Code. And to close I would like to take the opportunity to dispel a malicious misunderstanding on misreading one of my articles: Making a Spanish will. But it is extremely useful to save your beneficiaries time, money and hassle at a time of bereavement. Without a Spanish will a beneficiary will normally incur in penalties and surcharges for late payment on inheritance in Spain.

UK probate, in my professional experience, always exceeds the six months deadline if there is no Spanish will. In which case penalties and surcharges are accrued and added to the inheritance tax for late payment. I hope this clarifies the misunderstanding. Another matter is if Spanish authorities do not get wind on the death of an owner who holds company shares, property or other assets.

The statutory limitation of 4 years on all taxes, including Spanish Inheritance Tax, may kick in timing out the obligation to pay inheritance tax altogether — there is nothing the Tax Office can do after said time has elapsed to claim payment of inheritance tax from the beneficiaries.

In the particular case of a non-resident in Spain it is extremely difficult for the Spanish Tax Office understatement to know if and when they have passed away; unless of course his beneficiaries take to pro-actively inform the Spanish tax authorities… or for that matter their bank in Spain; which also has the legal obligation to disclose the death to the tax office. Generalisations are often dangerous and even more so on this delicate matter. The only sound advice that can be given is that a case-by-case study is required before any decision can reasonably be taken.

Each client has different needs which evolve over time so structures may need to be changed to accommodate their changing needs i. It is not referring to the value of the underlying real estate, but the amount that each beneficiary stands to inherit from the estate. Also note that the taxable base, when referring to property itself, is normally well-below the current market value of the property; it is not an up-to-date property appraisal.

This whopping difference that makes a beneficiary pay times more in one region than another on the same estate is explained because autonomous regions in Spain are empowered to rule on inheritance tax. Because the taxable base would now be split between the three of them, thus reducing the attraction of the IHT rate band which follows a sliding scale.

After legal and family allowances kick in there will be very little IHT to pay by each beneficiary not making it really worthwhile to incorporate a structure and to pay annual running maintenance fees for bookkeeping services and tax compliance purposes. Not to mention that potential buyers normally refuse buying real estate locked up in holding structures out of fear of non-disclosed debts and hidden liabilities. A due diligence must normally be carried out prior to acquiring a company holding real estate to rule off such legal risks.

To sell on a property, the vendor is normally required to first unwind the holding company inheritors stand to pay for this at a great expense to actually sell the underlying real estate itself.

Non-resident beneficiaries unfortunately do not benefit as much as those holding resident status when it comes to legal allowances to reduce the IHT taxable base as the applicable law is the state law which is less lenient than regional tax allowances available only to residents. Admittedly non-residents unfortunately, and unjustly, still do not qualify to opt for the full range of tax allowances that residents are entitled to.

The EU is looking into this as it is tantamount to discrimination with fellow EU member nationals — unacceptable. Truth is that corporate structures are neither needed nor recommended for the vast majority of people.

867,000
* €/m2
256 m2 | 10 bedrooms | 1 bathrooms | Furnished | Parking place | Swimming-pool | Gardens
Spanish Property Ownership through Corporate Structures. Advantages. 1. Concealing Ownership. Several reasons may lead owners to conceal. Can I buy a house in Spain through a company? Yes. Any company whose existence is recognised by its own law can operate in Spain acquiring properties. Owning properties in Spain through limited companies can be an expensive exercise and expert advice should be sought prior to purchasing a property through.

The contract of sale escritura de compravento is usually signed in front of a notary, at which point the full sale price, taxes and other costs become due. The services of a notary are not legally necessary to complete the sale. But it is advisable and required by many mortgages. The seller is responsible for hidden defects in the property, even if they are not aware of them. However, in practice gaining restitution for such defects can be difficult and costly.

Paying the costs and taxes associated with buying a home can be completed by the buyer or their agent. The buyer is also responsible for registering the property. Following the crash, Spanish banks were reformed with significant IMF involvement. This reduced the number of lenders in operation, and significantly increased the regulation and oversight of the industry.

As a result, many banks began to lend less and mortgage rates and terms became less favourable. Mortgage lenders will not complete on a mortgage agreement until you own a property. The buyer usually pays the fees. They vary from region to region. Many are negotiable — there are no fixed fees for lawyers or estate agents. Costs paid by the buyer include:. This is typically their only cost. Capital gains tax is paid on the profit of selling your home, i. You may be able to claim a reduction on the capital gains tax to account for inflation; or if you are purchasing another property in Spain; or if you are over 65 and have lived in the property as your main residence for more than three years.

Your residential status does not affect the application of capital gains tax either, as capital gains tax should be paid in Spain for property owned in Spain even if you are no longer a resident.

Any lawyer practising in Spain should be registered with the local bar association Colegio de Abogados. They will have a registration number that you can ask for and then verify with the bar association.

Naturally, registration does not guarantee honesty or competence, but it is a good minimum standard to insist on. Many governments provide lists of lawyers and translators who speak both Spanish and another language.

The Spanish government also provides a list of accredited translators page in Spanish, follow first link in article text for up-to-date PDF.

You may change your settings at any time. Your choices will not impact your visit. NOTE: These settings will only apply to the browser and device you are currently using. Search for:. Buying property in Spain. Last update on May 21, The Spanish property market Spain suffered during the global financial crisis and ensuing property market crash.

Should you rent or buy in Spain? Can foreigners buy property in Spain? The law does not order a specific term for the duration of the administrator office, generally the appointment is indefinite.

In which cases is the monthly payment to the Social Security due by Directors of a company? If the sole purpose of the company is to own property or administer assets belonging to the partners and not to make business then there is no requirement for the director to enrol in the national social security. In other cases, when for example you are partner or director of a company, you will be obliged to enter the social security system as self-employed in the following cases: a if you carry out direction or management duties that imply exercising the position of director of the company; b or if you provide a regular service to the company, directly and personally.

In both cases it is necessary for you to have the effective control of the company in the purpose of the Law. You may decide what quota you pay to the Social Security each month. What benefits does the Social Security provide you with if you are registered as self-employed? In general, and subject to legal circumstances you will enjoy: 1. What are the compulsory requirements of the limited companies? Companies must keep the following records: a Daily journal b Inventory and balance sheet c Shareholders' registry d Committee minutes e Register of contracts between sole shareholders and the company, in the case of an individual limited company.

Other records are needed for special cases. They must be registered in the Mercantile Registry, or later when the information is stored in computers. In the latter case, within four months since the accounting year ends. Also, the following documents must be deposited in the Mercantile Registry: a Annual Financial Statement, including -the balance sheet -profit and loss account -annual report b Management report only for big companies c Proposal of profit or loss application.

The director must present the accounts within 3 months from the end of the accounting year, and the Board must approve them within 6 months of the end of the accounting year. Once approved, the accounts must be deposited in the Mercantile Registry within one month of approval along with a certification of the profit or loss application.

How many taxes does the company pay in the acquisition of the property? The taxes that are paid in the acquisition of the property are independent of the type of the buyer company. If the vendor is a business person or company and the object up for sale is a plot, VAT on the price plus stamp duty special tax of the price will also have to be paid. If the property for sale is a new house the VAT will be reduced rated plus stamp duty on the price; if it is a second-hand house resale , then the tax is the one on acquisition of property and the rate depends on where the property is.

If the vendor is not in business, the buying company would only have to pay tax on transmission between individuals on the price, whatever the property. Aside from the purchase taxes there will be additional expenses: the Notary's expenses for the transaction of the deeds; the expenses for the registration of the property in the Land Registry; Lawyer's fees.

When can a company apply for a refund for the VAT paid on the purchase of a property? When property is bought by a holding company or a company is made up for the mere enjoyment of property, the company cannot reclaim VAT on the property. To deduct the VAT a company must have a business- effective activity and furthermore, this activity must accrue VAT as a pre-condition to later have the right to deduct the VAT.

If the company sells the property before ten years, the deducted VAT must be returned to the Inland Revenue pro rata with the years the company has enjoyed the property. What is the taxation of a company for the mere enjoyment of a property? For small and medium holding companies not incurring into business they will pay the general rate on profits. What is the taxation of the shareholder of a sleeping company? In the case of sale of shares, when the vendor is an individual the capital gain will be considered as the difference between the selling value- with legal limitations in the assessment of the value- and the cost of holding the shares.

When the vendor of the shares is a corporation, the capital gain will be calculated according to the general rules of Corporation Tax. Dividends paid to individuals or companies domiciled in countries with a non-tax agreement with Spain are taxed at general rate of profit on capital for non residents.

How much does the company pay if it rents the property? General tax. All expenses will be considered costs. Amongst others there are: -paid interests for purchasing the property -local taxes and surcharges -doubtful income balances under specific legal circumstances -personal services -expenses to repair and conserve the property -balance sheet property depreciation.

When is the corporation tax paid? Password recovery. Thursday, May 28, Forgot your password? Get help. Create an account. Olive Press News Spain. Residents in Phase 2 provinces throughout Spain can renew their ID…. Spain begins longest official national mourning in its democracy after almost….

All Football. EuroLeague Basketball cancels season, rendering it null and void. Spanish Government gives La Liga green light to resume from June…. Villarreal and Getafe deny any involvement with match fixing as part…. Keep your distance: golf courses in Spain reopen with coronavirus rules….

Laurence Dollimore Digital Editor - 28 May,

665,000
* €/m2
154 m2 | 7 bedrooms | 2 bathrooms | Furnished | Parking place | Swimming-pool | Gardens
It used to be fairly common for people to own Spanish real estate through onshore and offshore corporate structures, particularly properties. Three considerations are most often cited as considerations for buying a property through a company in Spain: privacy, tax mitigation, and. Buying a Property in Spain through a Limited Company offers advantages worth studying; learn the do's and don'ts in Spanish Property Law.

We bring to their attention that Spanish tax authorities are carrying an aggressive policy against companies that merely own property in Spain.

We advise them to act before the Spanish tax authorities contacts them. The first step will be to carry out a valuation of the open market rental value of the property. The company will have to pay company tax on the deemed income from a shareholder who has the property at their disposal. We will need to look at their tax position in detail before they are notified by the Spanish tax authorities. Owning properties in Spain through limited companies can be an expensive exercise and expert advice should be sought prior to purchasing a property through these vehicles as there may be alternative, more tax efficient solutions.

Nicole Gallop Mildon. Furthermore, the seller is liable to pay capital gains with certain allowances if the property was purchased before The question now is: who is in the better position when it comes to selling a resident or non-resident?

So it is clearly more advantageous to sell as a resident — or take another route as a non-resident. In order to decrease the expenses in the sale of a property one of the best options is to set up a Spanish SL company Limited Company and purchase the property through this company. If a Ltd. Three considerations are most often cited as considerations for buying a property through a company in Spain: privacy, tax mitigation, and succession. The second factor — paying as little tax as possible while complying with the law — is much of a muchness, as what one saves in one place, another almost inevitably takes.

If all proceeds are not reinvested, however, you can be liable for tax on the difference, depending on your status and when the profit was made. Resident individuals pay income tax Renta on earnings in any given fiscal year. The final consideration, succession, is one where owning property through an S.

For example, large estates that have full-time employees, earn rental income, or incur sizeable outgoings, are all legitimate examples of economic activity and could write costs off against earnings to reduce tax on profit. In short, every client should decide what suits their interests best, but bigger clients with larger portfolios may be better advised to consider owning property through a company.

Log in to leave a comment. This site uses Akismet to reduce spam. Learn how your comment data is processed. These are trying times for everyone in Spain. Workers are unsure of their next paycheck, business owners are laying-off their best and brightest, and retirees are getting fined for a dog walk. Please help contribute to our website and for more info see here.

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813,000
* €/m2
Tax on Spanish properties owned through corporate structures
286 m2 | 9 bedrooms | 4 bathrooms | Furnished | Parking place | Swimming-pool | Gardens
Can I buy a house in Spain through a company? Yes. Any company whose existence is recognised by its own law can operate in Spain acquiring properties. Buying a Property through a Spanish S.L. Company. We will assume that a non-​resident intends to buy a property in Mallorca (or else where in Spain) and wishes. Owning properties in Spain through limited companies can be an expensive exercise and expert advice should be sought prior to purchasing a property through.

They will however, following new legislation, be reluctant understatement when it comes to devising and incorporating more complex corporate structures, specifically offshore ones. This fine red line marks the difference between tax avoidance legally acceptable tax planning and tax evasion criminally pursuable. Affluent families have a mandate to preserve and accumulate wealth for future generations. Some corporate structures i. Scottish ancestral castle. So basically this law marked a turning point no longer allowing a fool-proof system that accommodated the warm mantle of anonymity i.

Anonymity is now achieved, yes, but to a certain extent only, at a basic level, as it limits the exposure to third-party information requests. However, it will remain glaringly visible to the Tax Office, or a judge, if needed be under this new law.

Spanish lawyers and financial advisers are under great scrutiny and face stiff penalties, including severe jail terms, if found guilty on devising and collaborating in the set-up of tax avoidance structures. Every week we are treated with an unpleasant new story on how some prominent law firm or lawyer has been found guilty and charged. For this reason alone Spanish lawyers and law firms in general are now highly reluctant to devise, assist, create or abet in any manner whatsoever such corporate structures.

Much less to accept appointing themselves as administrators of said companies. It is open to debate. New treaties, such as the Double-Taxation Agreement with Spain dating from has been recently amended in London on the 14th of March in an attempt to plug existing holes.

Traditionally European countries had the onus of undergoing protracted and expensive multijurisdictional investigations requesting information on a particular individual or company from other European countries to which not all complied with or the information supplied was often scant, incomplete and outdated.

This pilot scheme no longer requires the signatory countries to actively pursue the information; it is actually fed back to them on a regular basis automatically on a wide range of companies and individuals falling within certain parameters. The possibilities this leads to on cross-referencing information are significant if done right. This creates a spectacular perverse incentive as now inspectors have truly a vested interested of their own in targeting tax avoiders.

Some regions now incentivize and are more lenient, specifically on inheritance taxation, on having property under your own personal name rather than through structures which is being increasingly more taxed. In light of the ongoing recession and high levels of unemployment some European countries, i.

Spain, are cash-strapped and have become increasingly more aggressive pursuing tax offenders. Not exactly the best of times to be setting up structures to mitigate taxes really.

Depending on the structure chosen this can range from several hundred euros a year for basic bookkeeping services to raking up dozens of thousands on more complex structures.

You really have to ask yourself, given your wealth level and coupled with the value of the underlying asset, if you can actually afford or even if it is worth your while engaging in huge annual running costs on the long run that may even come to negate altogether any tax mitigation sought. So many scary stories over the years it is hard to list them all.

When you relinquish control of your asset through a power of attorney in favour of a physical person or a company abroad you better be sure of what you are doing and ensure you are fully aware of the risks this entails that may lead your beneficiaries to lose control of the asset upon your death. Scaremongering, a time-proven sales tactic. Car and insurance salesmen, in my experience, have always been top of the game at this because they know exactly what makes a customer tick.

I will try to cast away some of these widely held misconceptions. Only in the most extreme cases would you pay such a high amount. Also the beneficiaries of the bulk of the estate are normally children, not non-relatives which do not qualify for tax allowances.

The significance this has is that the taxable base the k would then be split amongst the heirs dramatically reducing the IHT liability as it follows a sliding scale. To this you must also add the legal and family allowances both national and regional which reduce the percentage to be paid even further.

Also worth mentioning is the fact that the taxable base for property is well-below the true market value. On average couples have two children. Children are classified in Group I for inheritance taxation purposes. In other words, the state allowance completely offsets the inheritance tax liability meaning they pay nothing on inheriting in Spain in this example.

On top of this there are autonomous regional allowances that children may benefit from. When the surviving spouse passes away the same result will unfold again providing the laws are not changed. In this particular case the inheritance liability would indeed sky rocket over a million. For this particular case I strongly advise obtaining an estimation on the inheritance tax the beneficiary stands to pay. False Fact: Same as previous point.

Selling a property would be exceptional. Moreover, you cannot inherit anything until you have first paid inheritance tax. Only once the tax duties have been settled and the property is lodged under the name of the beneficiary at the Land Registry is he free to sell on if he wishes as the property is now legally under his name to do with it as he pleases.

False Fact: Everyone inheriting in Spain would then be broke. Misleading Fact: Spouses indeed are not exempt from paying inheritance tax in Spain but they qualify for legal tax allowances.

If resident in Spain then the surviving spouse is entitled to further autonomous regional tax allowances. These allowances, both from the state and from the autonomous region where the property is located, may greatly reduce the burden. Misleading Fact: Scaremongers love quoting the extreme Clearly a problem affecting only a privileged few.

Not a problem that the vast majority of beneficiaries inheriting in Spain will have to contend with unless they are already multimillionaires. This falls outside Spanish inheritance tax. Likewise non-resident beneficiaries of a property located in Spanish territory also stand to pay Spanish inheritance tax ex art.

Spanish Criminal Code. And to close I would like to take the opportunity to dispel a malicious misunderstanding on misreading one of my articles: Making a Spanish will.

But it is extremely useful to save your beneficiaries time, money and hassle at a time of bereavement. Without a Spanish will a beneficiary will normally incur in penalties and surcharges for late payment on inheritance in Spain. UK probate, in my professional experience, always exceeds the six months deadline if there is no Spanish will. In which case penalties and surcharges are accrued and added to the inheritance tax for late payment.

I hope this clarifies the misunderstanding. Another matter is if Spanish authorities do not get wind on the death of an owner who holds company shares, property or other assets. The statutory limitation of 4 years on all taxes, including Spanish Inheritance Tax, may kick in timing out the obligation to pay inheritance tax altogether — there is nothing the Tax Office can do after said time has elapsed to claim payment of inheritance tax from the beneficiaries.

In the particular case of a non-resident in Spain it is extremely difficult for the Spanish Tax Office understatement to know if and when they have passed away; unless of course his beneficiaries take to pro-actively inform the Spanish tax authorities… or for that matter their bank in Spain; which also has the legal obligation to disclose the death to the tax office. Generalisations are often dangerous and even more so on this delicate matter.

The only sound advice that can be given is that a case-by-case study is required before any decision can reasonably be taken. Each client has different needs which evolve over time so structures may need to be changed to accommodate their changing needs i.

The Spanish tax authority has shown in the past it will not accept the use of a non-Spanish company to hold property in Spain purely to avoid succession tax — i. The Spanish authorities are using the register to scrutinise opaque structures, to be able to determine cases where the beneficial owner was actually using the property, but this was not accounted for correctly.

See more about global tax transparency. However, you can you often take steps to reduce your overall tax position, but you need to take personalised, specialist advice based on your situation and objectives. You need to establish the best plan of action for your circumstances. We can review your wealth management and how you hold your assets, to recommend ways to reduce your overall tax liability and make Spain a more tax-efficient place to live than you expect. Contact your local adviser for a tax planning review.

The tax rates, scope and reliefs may change. Any statements concerning taxation are based upon our understanding of current taxation laws and practices which are subject to change. Tax information has been summarised; individuals should seek personalised advice. Download Guides. Buy Living In Books. Skip to main content. Owning Spanish property through a company — times have changed.

You are here: Home Owning Spanish property through a company — times have changed. Spain , Property. Here is a summary of the key tax implications: The shareholder must pay market rent to the company, for the use of the property, through a commercial rental agreement based on its market value.

If the individual does not pay market value rent, the tax office can determine a deemed rent. The company has to pay Spanish corporation tax.

221,000
* €/m2
282 m2 | 10 bedrooms | 8 bathrooms | Furnished | Parking place | Swimming-pool | Gardens
Buying a Property through a Spanish S.L. Company. We will assume that a non-​resident intends to buy a property in Mallorca (or else where in Spain) and wishes. Can I buy a house in Spain through a company? Yes. Any company whose existence is recognised by its own law can operate in Spain acquiring properties. Spanish Property Ownership through Corporate Structures. Advantages. 1. Concealing Ownership. Several reasons may lead owners to conceal.

They may even offer them off-the-shelf for a reasonable fee and additionally offer bookkeeping services. The company will then be placed on top of the Spanish real estate. They will however, following new legislation, be reluctant understatement when it comes to devising and incorporating more complex corporate structures, specifically offshore ones.

This fine red line marks the difference between tax avoidance legally acceptable tax planning and tax evasion criminally pursuable. Affluent families have a mandate to preserve and accumulate wealth for future generations. Some corporate structures i. Scottish ancestral castle. So basically this law marked a turning point no longer allowing a fool-proof system that accommodated the warm mantle of anonymity i.

Anonymity is now achieved, yes, but to a certain extent only, at a basic level, as it limits the exposure to third-party information requests. However, it will remain glaringly visible to the Tax Office, or a judge, if needed be under this new law. Spanish lawyers and financial advisers are under great scrutiny and face stiff penalties, including severe jail terms, if found guilty on devising and collaborating in the set-up of tax avoidance structures.

Every week we are treated with an unpleasant new story on how some prominent law firm or lawyer has been found guilty and charged. For this reason alone Spanish lawyers and law firms in general are now highly reluctant to devise, assist, create or abet in any manner whatsoever such corporate structures. Much less to accept appointing themselves as administrators of said companies. It is open to debate. New treaties, such as the Double-Taxation Agreement with Spain dating from has been recently amended in London on the 14th of March in an attempt to plug existing holes.

Traditionally European countries had the onus of undergoing protracted and expensive multijurisdictional investigations requesting information on a particular individual or company from other European countries to which not all complied with or the information supplied was often scant, incomplete and outdated.

This pilot scheme no longer requires the signatory countries to actively pursue the information; it is actually fed back to them on a regular basis automatically on a wide range of companies and individuals falling within certain parameters.

The possibilities this leads to on cross-referencing information are significant if done right. This creates a spectacular perverse incentive as now inspectors have truly a vested interested of their own in targeting tax avoiders. Some regions now incentivize and are more lenient, specifically on inheritance taxation, on having property under your own personal name rather than through structures which is being increasingly more taxed.

In light of the ongoing recession and high levels of unemployment some European countries, i. Spain, are cash-strapped and have become increasingly more aggressive pursuing tax offenders. Not exactly the best of times to be setting up structures to mitigate taxes really. Depending on the structure chosen this can range from several hundred euros a year for basic bookkeeping services to raking up dozens of thousands on more complex structures.

You really have to ask yourself, given your wealth level and coupled with the value of the underlying asset, if you can actually afford or even if it is worth your while engaging in huge annual running costs on the long run that may even come to negate altogether any tax mitigation sought.

So many scary stories over the years it is hard to list them all. When you relinquish control of your asset through a power of attorney in favour of a physical person or a company abroad you better be sure of what you are doing and ensure you are fully aware of the risks this entails that may lead your beneficiaries to lose control of the asset upon your death.

Scaremongering, a time-proven sales tactic. Car and insurance salesmen, in my experience, have always been top of the game at this because they know exactly what makes a customer tick. I will try to cast away some of these widely held misconceptions. Only in the most extreme cases would you pay such a high amount. Also the beneficiaries of the bulk of the estate are normally children, not non-relatives which do not qualify for tax allowances.

The significance this has is that the taxable base the k would then be split amongst the heirs dramatically reducing the IHT liability as it follows a sliding scale. To this you must also add the legal and family allowances both national and regional which reduce the percentage to be paid even further.

Also worth mentioning is the fact that the taxable base for property is well-below the true market value. On average couples have two children. Children are classified in Group I for inheritance taxation purposes. In other words, the state allowance completely offsets the inheritance tax liability meaning they pay nothing on inheriting in Spain in this example. On top of this there are autonomous regional allowances that children may benefit from.

When the surviving spouse passes away the same result will unfold again providing the laws are not changed. In this particular case the inheritance liability would indeed sky rocket over a million.

For this particular case I strongly advise obtaining an estimation on the inheritance tax the beneficiary stands to pay. False Fact: Same as previous point. But we are living in a very different world now. Over the last decade governments the world over, including Spain, have successfully implemented methods to crack down on tax fraud, to both prevent future tax evasion and uncover past transgressions.

The Spanish tax authorities are therefore actively reviewing properties in Spain owned though corporate structures, with most inspections taking place in the Balearic Islands and Malaga and Cadiz provinces. Anyone owning property through a company should review their tax position and ensure they are meeting their tax obligations in Spain accordingly. The key tax implications for non-Spanish residents who are shareholders of a company that owns real estate assets are:.

The Spanish tax authority has shown in the past it will not accept the use of a non-Spanish company to hold property in Spain purely to avoid succession tax — i.

The Spanish authorities are using the register to scrutinise opaque structures, to be able to determine cases where the beneficial owner was actually using the property, but this was not accounted for correctly. See more about global tax transparency. However, you can you often take steps to reduce your overall tax position, but you need to take personalised, specialist advice based on your situation and objectives.

You need to establish the best plan of action for your circumstances. We can review your wealth management and how you hold your assets, to recommend ways to reduce your overall tax liability and make Spain a more tax-efficient place to live than you expect. Contact your local adviser for a tax planning review. The tax rates, scope and reliefs may change. Speaking of which, time passed when a buyer could pay cash and get the keys.

Ascertaining the legitimacy of the source of funds and wealth is a regulatory requirement and evidence of this must be obtained. Banks ask for transparency when it comes to money transfer and if you buy a property in Spain you will be asked to disclose the source of your money. According to Spanish law properties can be sold only by the owners or somebody who represents them and has a Power of attorney to arrange the transaction on their behalf. It was common to hear of properties registered in the names of offshore holding companies that were offered for sale themselves.

155,000
* €/m2
The Spanish property market
159 m2 | 10 bedrooms | 1 bathrooms | Furnished | Parking place | Swimming-pool | Gardens
Buying a Property through a Spanish S.L. Company. We will assume that a non-​resident intends to buy a property in Mallorca (or else where in Spain) and wishes. Buying a Property in Spain through a Limited Company offers advantages worth studying; learn the do's and don'ts in Spanish Property Law. Three considerations are most often cited as considerations for buying a property through a company in Spain: privacy, tax mitigation, and.

Drumelia Real Estate hopes its clients get some clarity to make the decision when registering their property. A foreigner will require a valid passport, a financial number and enough money. Speaking of which, time passed when a buyer could pay cash and get the keys. Ascertaining the legitimacy of the source of funds and wealth is a regulatory requirement and evidence of this must be obtained. Banks ask for transparency when it comes to money transfer and if you buy a property in Spain you will be asked to disclose the source of your money.

According to Spanish law properties can be sold only by the owners or somebody who represents them and has a Power of attorney to arrange the transaction on their behalf. It was common to hear of properties registered in the names of offshore holding companies that were offered for sale themselves. Spanish Tax Office not having any information on the transfer of assets, even though the Capital Gains Tax was due.

The Spanish company carries out no activity as the property is not let out. Michael and Margaret spend their holidays and weekends in Sotogrande.

They come to our offices to discuss their wealth planning. Michael and Margaret mention that the company declares that it is not making any gain and that they pay little, or no, company tax. We bring to their attention that Spanish tax authorities are carrying an aggressive policy against companies that merely own property in Spain. We advise them to act before the Spanish tax authorities contacts them. The first step will be to carry out a valuation of the open market rental value of the property.

The company will have to pay company tax on the deemed income from a shareholder who has the property at their disposal. We will need to look at their tax position in detail before they are notified by the Spanish tax authorities. Owning properties in Spain through limited companies can be an expensive exercise and expert advice should be sought prior to purchasing a property through these vehicles as there may be alternative, more tax efficient solutions.

495,000
* €/m2
143 m2 | 10 bedrooms | 1 bathrooms | Furnished | Parking place | Swimming-pool | Gardens
Buying a Property through a Spanish S.L. Company. We will assume that a non-​resident intends to buy a property in Mallorca (or else where in Spain) and wishes. Can I buy a house in Spain through a company? Yes. Any company whose existence is recognised by its own law can operate in Spain acquiring properties. Owning properties in Spain through limited companies can be an expensive exercise and expert advice should be sought prior to purchasing a property through.

Then differences between this possibility and possibly inheriting a property owned by a non-resident can be huge depending upon the individual circumstances. Finally one must point out that it is not always advisable to purchase a property through a Spanish SL Company, it is recommended when 2 circumstances come together: when the property has a value higher than Alternatively, we collaborate with excellent solicitors whom we can put you in touch and who will also give you best and up to date advice.

The real estate experts at Balearic properties share their knowledge and experience of the real estate market in Mallorca As international property consultants. Search listing For sale anywhere. Buying a Property through a Spanish S. News and Articles The real estate experts at Balearic properties share their knowledge and experience of the real estate market in Mallorca As international property consultants.

Categories economy. Ascertaining the legitimacy of the source of funds and wealth is a regulatory requirement and evidence of this must be obtained. Banks ask for transparency when it comes to money transfer and if you buy a property in Spain you will be asked to disclose the source of your money. According to Spanish law properties can be sold only by the owners or somebody who represents them and has a Power of attorney to arrange the transaction on their behalf.

It was common to hear of properties registered in the names of offshore holding companies that were offered for sale themselves. Spanish Tax Office not having any information on the transfer of assets, even though the Capital Gains Tax was due. These deals are also in the past and no longer possible with the current tax legislation in force.

Spanish Tax Authorities changed the tax laws and made the sale of companies owning properties much more complicated. Then several tax fraud prevention laws passed in , and

731,000
* €/m2
210 m2 | 7 bedrooms | 4 bathrooms | Furnished | Parking place | Swimming-pool | Gardens
Buying a Property in Spain through a Limited Company offers advantages worth studying; learn the do's and don'ts in Spanish Property Law. It used to be fairly common for people to own Spanish real estate through onshore and offshore corporate structures, particularly properties. Three considerations are most often cited as considerations for buying a property through a company in Spain: privacy, tax mitigation, and.

If a Ltd. Then differences between this possibility and possibly inheriting a property owned by a non-resident can be huge depending upon the individual circumstances. Finally one must point out that it is not always advisable to purchase a property through a Spanish SL Company, it is recommended when 2 circumstances come together: when the property has a value higher than Alternatively, we collaborate with excellent solicitors whom we can put you in touch and who will also give you best and up to date advice.

The real estate experts at Balearic properties share their knowledge and experience of the real estate market in Mallorca As international property consultants.

Here is a summary of the key tax implications: The shareholder must pay market rent to the company, for the use of the property, through a commercial rental agreement based on its market value.

If the individual does not pay market value rent, the tax office can determine a deemed rent. The company has to pay Spanish corporation tax. Any distribution of profits to the shareholder is liable to Spanish income tax i.

Since the individual is resident in Spain, their entire wealth is subject to wealth tax, including their shares in the property-owning company. When selling the property, the shareholder is not eligible for the main residence relief from capital gains tax, even if it is their main home. For succession tax purposes, the beneficiaries would not be entitled to the main home relief. Shares in foreign companies need to be accurately listed on the Modelo — the informative declaration of non-Spanish assets.

Non-Spanish residents The key tax implications for non-Spanish residents who are shareholders of a company that owns real estate assets are: If the property is available to shareholders, they should pay a market rent to the company.

If no rent is paid, the Spanish tax office could potentially claim the deemed rental amount. The company in turn, is required to pay non-resident tax.

Distributions of profit to the shareholder if any are liable for Spanish income tax at the savings income rates. When it comes to wealth tax, non-Spanish residents are only liable on their Spanish assets and rights. Three considerations are most often cited as considerations for buying a property through a company in Spain: privacy, tax mitigation, and succession.

The second factor — paying as little tax as possible while complying with the law — is much of a muchness, as what one saves in one place, another almost inevitably takes. If all proceeds are not reinvested, however, you can be liable for tax on the difference, depending on your status and when the profit was made.

Resident individuals pay income tax Renta on earnings in any given fiscal year. The final consideration, succession, is one where owning property through an S. For example, large estates that have full-time employees, earn rental income, or incur sizeable outgoings, are all legitimate examples of economic activity and could write costs off against earnings to reduce tax on profit.

In short, every client should decide what suits their interests best, but bigger clients with larger portfolios may be better advised to consider owning property through a company.

Log in to leave a comment. This site uses Akismet to reduce spam. Learn how your comment data is processed. These are trying times for everyone in Spain. Workers are unsure of their next paycheck, business owners are laying-off their best and brightest, and retirees are getting fined for a dog walk. Please help contribute to our website and for more info see here. Last Name.

806,000
* €/m2
105 m2 | 4 bedrooms | 10 bathrooms | Furnished | Parking place | Swimming-pool | Gardens
Spanish Property Ownership through Corporate Structures. Advantages. 1. Concealing Ownership. Several reasons may lead owners to conceal. Buying property in Spain as an expat can be a confusing endeavor. Check the company exists; check online at albir-properties-for-sale.com.ru (Spanish First, the buyer makes an offer, usually through the seller's estate agent. Owning properties in Spain through limited companies can be an expensive exercise and expert advice should be sought prior to purchasing a property through.

In order to decrease the expenses in the sale of a property one of the best options is to set up a Spanish SL company Limited Company and purchase the property through this company.

If a Ltd. Then differences between this possibility and possibly inheriting a property owned by a non-resident can be huge depending upon the individual circumstances. Finally one must point out that it is not always advisable to purchase a property through a Spanish SL Company, it is recommended when 2 circumstances come together: when the property has a value higher than Alternatively, we collaborate with excellent solicitors whom we can put you in touch and who will also give you best and up to date advice.

The real estate experts at Balearic properties share their knowledge and experience of the real estate market in Mallorca As international property consultants. Search listing For sale anywhere. Buying a Property through a Spanish S. The first step to constitute a company is to select its name. We recommend not using common names, as it is likely that they are already being used.

You will have to choose three different names by order of preference. We will inform the Central Mercantile Registry in Madrid of your proposed names, if the name does not exist the Registry will reserve it for your company. The second step is to pay the capital into a Spanish bank account in the name of the company. The following step is to register the company before the appropriate Tax, Labour and Social Security authorities and consequently before other legal Offices.

The company must also be registered with the Mercantile Registry. Only after the registration with the Mercantile Registry can shareholders sell their shares. However, before the registration of the company, the company can buy the property. In this case the company would have to ratify the purchase deeds after its registration. In urgent cases deeds can be signed without power of attorney, however they are then subject to ratification. Powers of attorney and ratifications can be signed either in Spain or England but the company deeds must be signed in Spain.

Who should constitute the company? Any person over the age of 18 without legal restrictions may set up a company. Minors may also, but are subject to certain limitations and generally speaking there are problems when their parents also constitute the company. The company should be constituted by the same people who, without it, would have bought the property.

Nevertheless, in some cases this rule can be altered. This could happen when you wish to anticipate the inheritance or benefit from somebody. It could also occur that the investor does not wish to have their name in public registries on account of debts with third persons. The company would then be in the name of someone else, with complete confidence. A company may also set up a Spanish company. This could be very useful if you are already operating through a limited company. Must I sign a Spanish will if I buy through a company?

When a Spanish property is bought by a foreign national through a Spanish company, the investor is nonetheless owner of Spanish shares. Therefore, it is advisable that each holder of shares signs a Spanish will exclusively for assets in Spain. I bought the house and put it in my name. Can I now constitute a company?

It is possible to handover the property to your company as capital. The only difference is, as mentioned before, the house constitutes the capital. In this assumption the company is constituted by the owners of the house, therefore holding in the company an identical proportion of shares as they did in respect to the house.

As a general norm, when is it convenient to acquire a property through a company? With our long experience in this field, we would advise you to buy a property through a Spanish company when the following circumstances apply: a co-habiting couples; when at the death of one, the other becomes the beneficiary, or in general investments of vast amounts of money where the future inheritance tax would be very high.

Who can be director of the company? The possible ways of administering a company are the following: a Sole director. There can be two or more. Any one can exercise the functions of administration and representation of the company. They must act jointly. The Statutes or the General Meeting, appoints the number of members of the Board, which must be at least three members and no more than twelve. Generally, a managing director is also elected. A director can either be a partner or a non-partner.

The director can also be another company. The company may also grant specific or general powers of attorney to third parties. Directors are named in the company constitution deed and the General Meeting can revoke them and name new administrators.

It is possible to designate substitute directors in the case that the designated directors cease their duty. The law does not order a specific term for the duration of the administrator office, generally the appointment is indefinite.

In which cases is the monthly payment to the Social Security due by Directors of a company? If the sole purpose of the company is to own property or administer assets belonging to the partners and not to make business then there is no requirement for the director to enrol in the national social security.

In other cases, when for example you are partner or director of a company, you will be obliged to enter the social security system as self-employed in the following cases: a if you carry out direction or management duties that imply exercising the position of director of the company; b or if you provide a regular service to the company, directly and personally.

In both cases it is necessary for you to have the effective control of the company in the purpose of the Law. You may decide what quota you pay to the Social Security each month. What benefits does the Social Security provide you with if you are registered as self-employed? In general, and subject to legal circumstances you will enjoy: 1. What are the compulsory requirements of the limited companies? Companies must keep the following records: a Daily journal b Inventory and balance sheet c Shareholders' registry d Committee minutes e Register of contracts between sole shareholders and the company, in the case of an individual limited company.

Other records are needed for special cases. They must be registered in the Mercantile Registry, or later when the information is stored in computers.

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The most expensive property in this area: Hotel for sale in Nueva Andalucía, Marbella, 65,000,000 €

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