Holding company in Spain in 2026: 1.25% tax, ETVE, moving shares and wealth tax

A holding company in Spain is a company, usually an SL, that owns the shares of your operating companies. Its point is Article 21 of the Corporate Income Tax Act: with a stake of at least 5% held for at least a year, 95% of dividends and gains on the sale of shares are exempt. The tax is about 1.25% instead of the 19–30% an individual would pay.

The saving only works while the money stays inside and is reinvested — in a new company, property, a stake in someone else’s business. Once you take it out for yourself, you pay ordinary tax on savings income. Below: the conditions for the exemption, a calculation on €500,000 and €3 million, the ETVE regime for foreign companies, how to move shares into a holding without tax, what relocation and the Beckham regime change, wealth tax, and the traps where a holding stops working.

What a holding company is and who needs one

A holding company is an ordinary Spanish company, most often an SL (sociedad limitada). Spanish law has no special “holding” form: a company becomes one when it owns and manages shares in other companies. You own the holding; the holding owns operating companies in Spain or abroad.

A holding makes sense if:

• you own a profitable company and do not spend all the profit on living costs, but reinvest it in new projects;
• you have several companies and need to move money between them without tax at every step;
• you plan to sell a business and immediately invest the money in something else;
• you want to bring a family business into one structure — for management, wealth tax and passing it on to your children.

A holding is not worth it if you take out all the profit to live on: the tax ends up the same, and the costs of a second company are added. Nor does it work as a “piggy bank” for deposits and shares without an operating business: such a company becomes passive (entidad patrimonial) and loses almost all the reliefs. The overall picture is in our overview of taxes in Spain.

The Article 21 exemption: 95% and an effective 1.25%

Article 21 of Law 27/2014 on Corporate Income Tax (Impuesto sobre Sociedades, IS) exempts dividends and gains on the sale of shares if these conditions are met:

• a stake of at least 5% in the capital or equity of the subsidiary, held directly or indirectly;
• held for at least a year. If the year has not yet passed on the dividend date, it can be completed after the payment;
• for a foreign subsidiary — it pays a tax similar to Spanish IS at a nominal rate of at least 10%, or is resident in a country that has a double tax treaty with Spain with an exchange-of-information clause. Companies in tax havens do not qualify, except EU companies with genuine activity.

Since 2021 the exemption is not full: 5% of the amount is treated as management expenses (gastos de gestión) and taxed. At the standard 25% rate this gives an effective 1.25%. The alternative test “a stake costing more than €20 million instead of 5%” has been abolished; the transition ended with tax periods starting in 2025, so in 2026 you need the 5%.

There is one exception with a 100% exemption, for dividends only. It applies if the holding itself set up a new subsidiary after 2021 and has owned 100% of it since incorporation, its turnover is under €40 million, and before that it was not part of a group and held no stakes of 5% or more in other companies. The relief lasts three years after the year the subsidiary was set up. An existing company that you contribute to the holding does not qualify.

If the subsidiary itself holds shares and more than 70% of its income is dividends and gains on shareholdings, the 5% and one-year conditions are also checked at the level of the “granddaughters”. There is no 19% withholding on dividends within the structure if the holding confirms to the payer that the Article 21 conditions are met.

How much it saves: dividends and a company sale in figures

Two examples for a Spanish tax resident not on the Beckham regime. The 2026 scale for savings income: 19% up to €6,000, 21% up to €50,000, 23% up to €200,000, 27% up to €300,000 and 30% above. The scale is explained in detail in our article on income tax in Spain.

In the first example the holding has €125,630 more to invest, in the second €700,630 more. But if you take the money out straight away, the total tax is even slightly higher than with direct ownership: €136,255 against €131,880 and €903,755 against €731,880. A holding does not reduce the tax, it defers it while the money works inside. If the group is small, with turnover under €10 million, the holding’s rate in 2026 is 23%, and the tax on €500,000 of dividends is €5,750.

What tax the holding itself pays in 2026

The rate does not affect the exempt 95%. It matters for the taxable 5% and for the holding’s other income: interest, rent, management fees charged to subsidiaries.

• 25% — the standard rate;
• 23% — for smaller companies with turnover under €10 million (22% in 2027, 21% in 2028, 20% from 2029). Turnover is measured across the whole group, including the operating companies;
• 19% on the first €50,000 and 21% on the rest — for micro-companies whose group turnover is under €1 million;
• 15% for new companies in their first two profitable years — not available to a holding within a group.

A passive holding (entidad patrimonial) — a company with more than half of its assets not used in an economic activity — does not get the reduced rates; plan on 25%. Stakes of 5% or more in operating companies that the holding actually manages do not count as passive assets. So a holding above working companies, with people and resources to manage them, is not passive.

ETVE: a holding for foreign companies

ETVE (entidad de tenencia de valores extranjeros) is a special regime for a Spanish holding that manages stakes in foreign companies. Requirements: the articles of association include managing stakes in non-resident companies, the company has the people and resources to do so, the shares are registered, and the choice of regime is notified to the Ministry of Finance. A passive company cannot opt for it.

The main benefit of an ETVE is for non-resident shareholders. Dividends the ETVE pays out of exempt foreign income are treated as not obtained in Spain, so there is no Spanish tax or withholding on them. For a shareholder resident in Spain an ETVE changes nothing: dividends are taxed on the same 19–30% scale. An ETVE is useful when relatives or partners living in different countries share one structure, or when a Spanish company becomes an intermediate link in an international group.

How to move shares into a holding without tax

If you own a company personally and contribute it to a holding, as a general rule this is a sale: you pay tax on the increase in its value. The law lets you defer it if the structure changes for business reasons:

• share exchange (canje de valores) — the holding obtains a majority of the votes in the company and issues its own shares to you in return. Any cash top-up is limited to 10% of nominal value;
• non-cash contribution (aportación no dineraria) — if there is no majority. You contribute at least 5% of a company you have owned for at least a year, the company must not be a mere asset manager, and after the contribution you hold at least 5% of the holding.

The tax is not cancelled but deferred: the holding takes the shares at your original value and acquisition date. The holding notifies the tax authority of the transaction; failing to do so on time means a €10,000 fine per transaction. The key condition is genuine business reasons: centralising management, restructuring, financing new projects. If the only aim is to save tax, the tax authority reverses the benefit on audit.

And a separate trap: if the holding sells the contributed shares within two years of the contribution, the Article 21 exemption does not cover the growth accumulated before. The “contribute the company to a holding and sell straight away” scheme does not work: on a sale for €3 million with €2.5 million of growth, the holding would pay €625,000 instead of €31,250.

Holding companies and moving to Spain

It is better to design the structure before you move. Once you become a Spanish tax resident, any reshuffling of shares follows Spanish rules — with a test of business reasons — and your years of residence start counting towards exit tax. When residence begins is explained in our article on tax residence in Spain.

If you are moving under the Beckham regime, keep in mind:

• dividends and gains from foreign companies are not taxed in Spain under Beckham (except companies whose assets are mainly Spanish property);
• dividends from a Spanish holding are taxed on the 19–30% scale — since 2025 it is the same as for ordinary residents;
• the 25% cap on your stake applies only to those who obtained the regime as a director of a passive company. There is no such cap for operating companies.

A low-taxed foreign subsidiary of a Spanish holding can fall under the controlled foreign company rules: if the holding and related parties own at least 50% and the subsidiary pays less than 75% of the Spanish tax, its passive income is added to the holding’s tax base. This does not apply to EU companies with genuine activity. A resident’s foreign shareholdings are declared on Modelo 720.

If you ever leave Spain after living here 10 of the last 15 years, exit tax applies. It covers those whose shares are worth more than €4 million, or who hold more than 25% of a company worth more than €1 million. The increase in value is taxed as if you had sold everything. If you move to an EU country, the tax arises only if within 10 years you sell the shares or leave the EU.

Holding companies and wealth tax

Shares in a family business are exempt from wealth tax (Impuesto sobre el Patrimonio) if all the conditions are met:

• the company is not a mere asset manager: for more than 90 days of the year, more than half of its assets are used in its activity;
• the stake is at least 5% individually or at least 20% together with your spouse, parents, children and second-degree relatives;
• you or someone in that family group actually manages the company, and the pay for it is more than 50% of your income from work and business.

For a holding this works as follows: stakes of 5% or more in operating companies with resources to manage them do not count as passive assets. Not the whole value of the stake is exempt, but the part attributable to the assets needed for the activity — including in the subsidiaries. In 2026 the tax authority clarified that the management functions and the pay must sit in the holding itself, not only in the subsidiaries.

The solidarity tax on large fortunes (Impuesto Temporal de Solidaridad de las Grandes Fortunas) has been extended with no end date and applies in 2026. It covers net wealth above €3 million. Shares exempt from wealth tax are exempt from it too. If the holding is part of a plan to pass the business on to your children, see also our article on inheritance and gift tax.

Where a holding stops working

• A passive company. If the holding accumulates cash, deposits and a portfolio rather than stakes in working companies, it becomes an entidad patrimonial: no reduced rates, no 100% exemption for new subsidiaries, no ETVE, and the gain on selling a stake in such a company is exempt only up to its undistributed profits.
• A sale less than two years after the contribution. The growth accumulated before the contribution is taxed at 25%.
• No business reasons. A structure whose only purpose is saving tax can be challenged under the general anti-avoidance rule (Article 15 of the General Tax Act) or the special rule for restructurings, with additional tax and interest.
• A subsidiary in a low-tax country. Without the 10% rate or a treaty there is no dividend exemption, and passive income may be attributed to the holding.
• Withholding before the year is up. If a dividend is paid before the one-year holding period has passed, in practice the payer withholds 19%, and the holding recovers it through its tax return.
• Wealth tax. The exemption can be lost if the management functions stay in the operating company rather than in the holding.

How much it costs to set up and run a holding

The minimum share capital of an SL has been €1 since 2022. While capital is below €3,000, 20% of profits must go to a reserve, and on liquidation without sufficient assets the shareholders are liable for the difference up to €3,000. Registering a simple SL costs a few hundred euros in notary and registry fees. A holding with a contribution of shares cannot use the standard articles: it needs a separate notarial deed, and market figures put the cost at €1,500–3,000.

After that the holding is an ordinary company: bookkeeping, the annual corporate income tax return (modelo 200), annual accounts filed with the commercial registry, and for an ETVE, correspondence with the Ministry of Finance. The running cost depends on the number of subsidiaries and transactions, and it is worth comparing with the saving in the calculation above.

Key points about holding companies in Spain

• A holding is an ordinary SL that owns your companies; dividends and share sales are taxed at an effective 1.25% with a stake of 5% or more held for at least a year.
• It pays off while the money is reinvested inside the structure; when you take it out for yourself you pay 19–30%, and the total tax can even end up higher.
• An existing company can be contributed without tax — by a share exchange or a non-cash contribution, with business reasons and notice to the tax authority.
• Selling a contributed company within two years makes no sense: the accumulated growth is taxed at 25%.
• An ETVE benefits non-resident shareholders; it gives a Spanish resident nothing.
• A holding above working companies can keep the wealth tax exemption if the management and pay sit in the holding itself.
• Work out the structure before you move, taking into account the Beckham regime and future exit tax. Your case can be reviewed in a consultation.

Frequently asked questions about holding companies in Spain

How much tax does a holding company in Spain pay on dividends?

If the holding has owned at least 5% of the subsidiary for more than a year, 95% of the dividends are exempt and 5% is taxed at the company’s rate. At 25% that is 1.25% of the dividends; at 23%, for a group with turnover under €10 million, it is 1.15%.

Do I need a holding if I take out all the profit to live on?

No. A holding defers tax while the money is invested inside the structure. If you take it out straight away, you pay 19–30% on the holding’s dividends, and together with its own tax the total ends up slightly higher than owning the company directly.

Can I move my shares into a holding without paying tax?

Yes, by a share exchange if the holding obtains a majority of the votes, or by a non-cash contribution of at least 5% of a company you have owned for at least a year. You need business reasons and must notify the tax authority, otherwise there is a €10,000 fine per transaction.

Does a holding work if I am on the Beckham regime?

Yes, there is no direct ban. Dividends from foreign companies are not taxed in Spain under Beckham, while dividends from a Spanish holding are taxed on the 19–30% scale. The 25% stake cap applies only to those who obtained the regime as a director of a passive company.

What is an ETVE and who benefits from it?

An ETVE is a regime for a Spanish holding that manages stakes in foreign companies. It benefits non-resident shareholders: dividends paid out of exempt foreign income reach them without Spanish tax. For a Spanish resident an ETVE changes nothing.

Does a holding exempt me from wealth tax?

It can, if the holding manages working companies, your stake is at least 5% individually or 20% with your family, and the management and pay — more than half of your income from work and business — sit in the holding itself. The exempt part is the value attributable to the assets needed for the activity.

Can I set up a holding and sell the company through it straight away?

No. If the holding sells the contributed shares within two years of the contribution, the growth accumulated before the contribution is taxed at the ordinary rate, and the tax authority may challenge the restructuring itself as a transaction without business reasons.

How much does it cost to set up a holding in Spain?

The capital of an SL starts at €1. A simple registration costs a few hundred euros; a holding with a contribution of shares needs a separate notarial deed and, according to market figures, costs €1,500–3,000. After that come bookkeeping and annual filings, as for any company.

Sources

• Law 27/2014 on Corporate Income Tax: Articles 5, 21, 29, 76, 80, 87, 89, 100, 101, 107, 108, 128 (BOE)
• Corporate Income Tax Regulation, RD 634/2015, Article 61 (BOE)
• Law 35/2006 on Personal Income Tax: Articles 46, 66, 76, 93, 95 bis, 101 (BOE)
• Non-Resident Income Tax Act, RDLeg 5/2004, Article 13 (BOE)
• Law 19/1991 on Wealth Tax, Article 4 (BOE)
• Law 38/2022, Article 3: solidarity tax on large fortunes (BOE)
• General Tax Act, Law 58/2003, Article 15 (BOE)
• Capital Companies Act, RDLeg 1/2010, Article 4 (BOE)
• DGT ruling V0145-26: holding companies and the wealth tax exemption
• DGT ruling V0058-20: business reasons for setting up a family holding