Spain + Estonia

[nyanyanya]

Do you know if, as a Spanish resident, one can own a company outside Spain and conduct business without tax obligations to Spain?
I am concerned about Article 8.1 of the Corporate Tax Law (LIS), point C.
It states that any entity with effective management in Spain will be considered a resident in Spain.
As the sole owner of the company, it appears that I may be subject to taxation for that company, even if it generates no personal income.
Does anyone have any experience or recommendations?
The Estonian company would conduct business with LLCs and companies outside of Spain.

 

[Don]

nyanyanya said:
Do you know if, as a Spanish resident, one can own a company outside Spain and conduct business without tax obligations to Spain?
Click to expand...

Yes, you can if your company has sufficient substance. See my other post explaining this in more detail.
https://www.offshorecorptalk.com/th...am-of-tax-planning-advisors.44324/post-295055

nyanyanya said:
I am concerned about Article 8.1 of the Corporate Tax Law (LIS), point C.
It states that any entity with effective management in Spain will be considered a resident in Spain.
As the sole owner of the company, it appears that I may be subject to taxation for that company, even if it generates no personal income.
Does anyone have any experience or recommendations?
The Estonian company would conduct business with LLCs and companies outside of Spain.
Click to expand...

Recommendation is to establish sufficient substance.

If it was that simple to just incorporate abroad to avoid tax obligations in Spain then noone in Spain would use local companies for doing business.

One of the benefits of Estonia is that it has a double tax treaty with Spain and is part of EU, which makes certain things a bit easier, e.g., if you plan to establish personal (tax) residence there.

I believe @baltic7 is from Spain and has a business in Estonia and can possibly tell you more.

 

[nyanyanya]

Don said:
Yes, you can if your company has sufficient substance. See my other post explaining this in more detail.
https://www.offshorecorptalk.com/th...am-of-tax-planning-advisors.44324/post-295055
Recommendation is to establish sufficient substance.

If it was that simple to just incorporate abroad to avoid tax obligations in Spain then noone in Spain would use local companies for doing business.

One of the benefits of Estonia is that it has a double tax treaty with Spain and is part of EU, which makes certain things a bit easier, e.g., if you plan to establish personal (tax) residence there.

I believe @baltic7 is from Spain and has a business in Estonia and can possibly tell you more.
Click to expand...

Thank you very much for the tips. Substance is the key, then. I will try to find more information about that and how to do it.

 

[baltic7]

Don said:
Yes, you can if your company has sufficient substance. See my other post explaining this in more detail.
https://www.offshorecorptalk.com/th...am-of-tax-planning-advisors.44324/post-295055
Recommendation is to establish sufficient substance.

If it was that simple to just incorporate abroad to avoid tax obligations in Spain then noone in Spain would use local companies for doing business.

One of the benefits of Estonia is that it has a double tax treaty with Spain and is part of EU, which makes certain things a bit easier, e.g., if you plan to establish personal (tax) residence there.

I believe @baltic7 is from Spain and has a business in Estonia and can possibly tell you more.
Click to expand...

Exactly everything @Don said

And adding one more problem. If you want to work and open accounts with Estonian banks, you will have to be a resident in Estonia or your business will have to have a physical sales establishment in Estonia (restaurant, store, etc...). But also you can use EMI to work.

On the other hand, Spain will drive you crazy to demonstrate the substance if it is not a traditional business (restaurant, store, ....).