BV in Spain / Spanish SL
You set up an SL in Spain to get down to business, allowing deductible expenses and VAT reconciliation.
Business Activity, What Does That Mean?
Your SL will be involved in the buying and selling of homes and apartments. The advantage is that you are often there yourself and can casually walk around in your immediate area to see what is available and at what price. The market is based on affluent residential tourists from the Netherlands, Belgium, and other European countries. This means there are always people looking to buy homes and others who want or sometimes need to sell, whether due to infrequent use, illness, or death. If you have cash on hand and can make quick decisions, you can strike lucrative deals at such times. You buy contracts in new developments (urbanizations) to resell on paper.
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Subsidiary that Finances Everything
Do you own a wealthy Dutch (holding) BV? This BV can then set up a subsidiary in (for example) Spain. A Spanish SL. This could be an SL with high share capital, depending on the balance that the Dutch BV / holding has available for the Spanish venture. It could be €100,000, €500,000, or even many millions of euros. The available amount is transferred as share capital from the Spanish SL to its bank account in Spain. The money leaves the Dutch BV and enters the Spanish SL as working capital. This transaction is not taxed. Not in the Netherlands AND not in Spain. After all, it's neither a dividend nor a loan. The money leaves the Dutch holding, but the participation in the Spanish subsidiary appears as counter value on the balance sheet of the BV. Now you can freely engage in business in Spain with this money, transferred from the holding.
Other Business Activities
If you have a successful company in the Netherlands, then a Spanish subsidiary might, for example, explore whether there's a market for your products or services in Spain (or any other country). From the Spanish subsidiary SL, you'll conduct market research. To start, you'll need a representative car (with Spanish license plates). You'll need to travel around, stay in chic hotels, and of course, eat well (always with potential clients). Perhaps you'll buy or rent a place in Spain to work from. Such expenses can also be (partially or fully) tax-deductible in the Spanish SL.
Loss-Making Subsidiary SL
What if the foreign subsidiary suffers losses? That can happen and then, of course, it's not a problem. The loss indirectly affects the Dutch holding BV. The value of its Spanish investment is written down. You could also ultimately decide to dissolve that subsidiary SL. The loss is then definitively processed in the Dutch holding. Unfortunate, but that's how it goes. No fiscal or taxable consequences.
An SL in the Name of the Children
Apart from the business Dutch mother BV and Spanish subsidiary SL, you can establish another SL to trade and invest in Spanish real estate. This SL is not set up by your Dutch BV but by you personally, or this (second) SL can directly be in your children's names. They become the (co)shareholders of this Spanish SL. You become its director (administrador). Should this (other) SL need financing to invest in Spanish real estate, that financing could come from that first SL, the subsidiary of the Dutch holding, or possibly be lent directly by your Dutch company. Since the loan is to another company and not directly to you personally or to your children, you also avoid the new and increasingly strict regulations that govern 'excessive borrowing.' In this way, you help your children build a significant estate abroad using existing funds from your corporate structure, benefiting the whole family.
Personal Discussion
I warmly invite you to discuss the opportunities to get down to business in Spain or to invest in real estate in a personal video consultation. You can book this consultation directly on this page. Ask your questions and you will get complete explanations. Before the video consultation, you will have plenty of opportunity to send your questions in advance, so we can start the video consultation well-prepared.
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