Spain has two tax worlds: the mainland with 25% corporate tax – and 15% in the first two profitable years of a new company – and the Canary Islands, whose Special Zone ZEC is approved by the EU and taxes licensed companies at 4%. On top of that comes the Beckham Law, which gives newcomers a flat income tax rate of 24% for six years. Company formation in Spain is therefore above all a question of location within the country.
Mainland: 25% and 15%
The standard corporate tax rate is 25%. Newly formed companies pay 15% in their first profitable tax year and the following year, so new companies are considerably relieved during their start-up phase. Companies with turnover below €1 million also benefit from reduced rates that continue to fall gradually.
Start-ups certified under the Spanish Startup Law can also defer tax payments in their first profitable years and structure employee share plans tax-efficiently. Taxes are administered by the Agencia Tributaria.
Canary Islands: 4% in the ZEC
The Zona Especial Canaria is a special zone approved by the European Commission. Companies registered there pay 4% corporate tax on profits from eligible activities on the islands. Instead of Spanish VAT at 21%, the Canary Islands apply IGIC with a standard rate of 7%.
The special zone requires real presence on the islands:
| Requirement | Tenerife and Gran Canaria | Other islands |
|---|---|---|
| Jobs within the first six months | at least 5 | at least 3 |
| Investment in fixed assets within two years | €100,000 | €50,000 |
| Management | at least one director resident in the Canary Islands | at least one director resident in the Canary Islands |
With five jobs, the first €1.8 million of the tax base is taxed at 4%; each additional job raises this amount by €500,000, and above 50 jobs the rate applies to the entire profit. Entry in the ZEC register costs a one-off €850.
Beckham Law: who can use it
The Beckham Law is officially the special regime for workers posted to Spain and is set out in Article 93 of the Spanish Personal Income Tax Act. It allows a person who becomes tax resident in Spain to be taxed under the rules for non-residents for six years: the year of arrival and the following five years.
To use the regime, the basic condition is that the person was not tax resident in Spain in the five tax years before the move; before the 2022 Startup Law, the period was ten years. In addition, the move must be based on one of the reasons recognised by law:
- an employment contract with a Spanish employer or a posting to Spain
- appointment as director of a Spanish company – for companies that are not asset-holding companies, with a shareholding of no more than 25%
- an entrepreneurial activity classified as innovative or of special economic interest, with a favourable report from the state innovation agency ENISA
- work as a highly qualified professional for start-ups or in research, development and training
- remote work for a foreign employer under the digital nomad visa
Ordinary self-employed persons without such a classification are excluded. Since 2023, spouses and children under 25 can also be included in the regime if they move to Spain together with the applicant or within the applicant’s first year.
What the Beckham Law taxes
What is taxed follows from the treatment as a non-resident: Spain essentially taxes only income from Spanish sources.
| Income | Beckham Law | Standard taxation |
|---|---|---|
| Employment and activity income up to €600,000 | 24% | progressive up to 47% |
| Employment income above €600,000 | 47% | progressive up to 47% |
| Foreign investment income and capital gains | generally tax-free | taxable |
| Wealth tax | only on assets in Spain | on worldwide assets |
For entrepreneurs with assets or shareholdings abroad, the effect on wealth tax is often just as significant as the flat rate of 24%.
Application, deadlines and end
Strict deadlines apply to the application: the regime is claimed with Form Modelo 149 at the Agencia Tributaria – no later than six months after registration with Spanish social security or the start of the activity. Missing the deadline means the regime can no longer be used. In subsequent years, Modelo 151 is filed instead of the regular income tax return.
At the end of the six years, the regime expires automatically; from then on, regular progressive taxation of worldwide income applies. Anyone planning company formation in Spain together with a personal move should therefore structure the formation, the director appointment and the move so that one of the qualifying routes is demonstrably met.
SL and SA
Since the 2022 company formation law, the Sociedad Limitada (SL) can be formed with as little as €1 of share capital; until the capital reaches €3,000, part of the profits must be retained as a reserve. The Sociedad Anónima (SA) requires €60,000, a quarter of which is paid in at formation.
Shareholders and directors need a foreigner identification number (NIE) in advance. Formation takes place before a notary or via the state online procedure CIRCE.
From NIE to registration
Company formation in Spain takes five steps up to the registered SL:
- Apply for the NIE: for all shareholders and directors.
- Secure the name: with a certificate from the Central Commercial Register.
- Bank account and capital: deposit with a Spanish bank.
- Notarial formation: or online via CIRCE.
- Registration and tax number: commercial register and the company’s NIF; for the ZEC, additionally the approval of the ZEC Consortium.
On the mainland, the SL is usually registered within two to four weeks.
Accounting and obligations
The key obligations for bookkeeping, accounts, audit and VAT at a glance – so you know from the start what running your company involves.
| Obligation | Rule |
|---|---|
| Annual accounts | Approval within six months, filing with the commercial register within one month thereafter |
| Statutory audit | From 2 of 3 in two consecutive years: total assets €2.85m, turnover €5.7m, 50 staff |
| Tax return | Corporate tax return (Modelo 200) by 25 July for a calendar year |
| VAT: registration | From the first sale; rate 21%, IGIC at 7% in the Canary Islands |
| VAT: returns | Quarterly (Modelo 303) with annual summary (Modelo 390); Canary Islands: Form 420 |
As of 2026. Bookkeeping and filings are usually handled by specialised accountants in the target country.
Is Spain right for you?
Whether Spain is right for you depends less on the tax rate than on two questions: is a move planned – and is real presence in the Canary Islands worthwhile?
Suitable for
- Entrepreneurs who want to move to Spain
- Companies with a team and investment in the Canary Islands
- Executives who want to use the Beckham Law
- Start-ups certified under the Startup Law
Less suitable for
- Online entrepreneurs with no link to the Spanish market
- Holdings looking for a very low rate
- One-person companies hoping to use the ZEC without staff
- Founders expecting to set up without an NIE
If you want to compare regimes for newcomers in southern Europe, also look at Portugal with IFICI and at Cyprus and Malta with their non-dom status. Further locations are shown in the overview of all locations and the tax comparison; whether the Beckham Law or the ZEC applies in a specific case is a topic for the initial call.
