Legislative changes and current economic trends give life to Iberian companies
When talking about tax planning nothing is new about Spanish Holding Companies
Since 2004, when the restated text of the Corporations Tax Law was approved by Legislative Decree 4/2004 the FSHE regime was created – (Foreign Securities Holding Entities)- the appearance of these kinds of entities turned into something almost common.
The FSHE had certain particularities and limitations, as well as being more costly compared to competing jurisdictions- these factors many times played against them.
Originally, the FSHE established that any company can follow the regime provided their corporate purpose comprises of management and administration activities of securities representing funds of entities not residing in the Spanish territory.
The requirements that allowed for the regime’s benefits – to which we will get back later- were the following:
What income is originally exempt?
Why is the Spanish holding regime more attractive now?
In summary, Spanish companies whether or not following the FSHE regime have been revitalized in the last period, improving their positioning and their cost benefit ratio.
Eliminating the demand in reference to the origin of commercial income opens the doors to many other activities that until recent were excluded from the Spanish holding scope.
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