Concept
The strategy combines personal tax residence in Spain under the Beckham Law with a Hong Kong company holding offshore income. Employment income — all of which the regime treats as obtained in Spain, whoever pays it — is taxed at a flat 24% rate up to €600,000 and at 47% above that; foreign-source passive income — including dividends from the Hong Kong company — falls outside the Spanish tax base. The structure operates at two levels: personal residence and corporate source.
The structure applies the source principle at both levels. Hong Kong exempts income sourced outside its territory from profits tax. Spain, under the Beckham Law, keeps foreign-source passive income outside the personal income tax base. Offshore income accumulated in the Hong Kong company and distributed as dividends to the Spanish resident is not subject to tax in either jurisdiction — provided the substance and source conditions are met. The flows divide between the corporate and the personal level:
The regimes that compete for the same person have moved on since this strategy was first written: the UK non-domicile regime was abolished in April 2025 and replaced by the four-year FIG regime, and Portugal's NHR was closed to new entrants and replaced by IFICI. The live field — the Swiss expenditure basis, Italy's Art. 24-bis, the Cyprus non-dom status, Greece's Art. 5A and 5C, Ireland's SARP and thirteen others — is kept on one grid in special tax regimes. What distinguishes the Beckham Law within that field stays the same: it taxes employment income, wherever it is paid from, at a flat 24% rather than exempting it, and it gives up treaty residence to do so.
Tax mechanics
Rate comparison
The two levels compare as follows, with OECD averages standing in for a standard tax resident — the simple average of the 38 members' combined statutory corporate rate and of their top statutory personal income tax rate in the OECD Tax Database for 2025; a dash means the reference gives no figure.
| Level | OECD average | Beckham + Hong Kong |
|---|---|---|
| Corporate tax | about 24% | 0% on offshore income under the Hong Kong profits tax exemption, subject to an offshore claim filed with the IRD |
| Personal tax, employment income | about 42% | 24% up to €600,000; 47% above, on all employment income, which the regime treats as Spanish-source |
| Personal tax, foreign income | — | 0% on dividends, interest and capital gains arising outside Spain |
| Retained from pre-tax profit | ~44% | materially higher, depending on income mix |
The comparison uses OECD averages as a reference point. The actual benefit depends on the income structure, the ratio of Spanish-source to foreign-source income, and whether the offshore claim is sustained.
Ongoing obligations
A Hong Kong company does not carry a Spanish corporate tax burden if it qualifies for the offshore profits exemption. However, proper accounting records are required under the Companies Ordinance (Cap. 622), and an offshore claim must be filed with the Inland Revenue Department to establish the 0% rate on qualifying income — it is not automatic.
The strategy lives at the junction of two principles: Spanish residence by election, Hong Kong source by fact.
The Beckham Law removes the obligation to file Form 720 (foreign asset declaration). Spanish CFC rules under Article 91 LIRPF may still apply in specific fact patterns and should be assessed individually.
Strategy description
Spain residence
The Beckham Law (formally the Régimen Especial para Trabajadores Desplazados, RETD) was substantially reformed by Ley 28/2022, effective from the 2023 tax year. Before 2023 the regime was open to people moving to Spain under an employment relationship, including a posting ordered by a foreign employer, and to directors of a company in which they held no stake of 25% or more, after ten years of non-residence. The reform cut the look-back to five years and extended eligibility to: remote workers, including holders of Spain's international teleworking (digital nomad) visa; directors of any company, with the stake limit kept only for asset-holding companies; entrepreneurs carrying on an activity certified as entrepreneurial under Ley 14/2013; highly qualified professionals serving start-ups or working in training, research, development or innovation; and, on their own conditions, the taxpayer's spouse and children.
Key tax conditions:
- foreign-source passive income — dividends, interest and capital gains arising outside Spain — falls outside the Spanish tax base;
- all employment income, which the regime treats as obtained in Spain, is taxed at a flat 24% up to EUR 600,000; the excess is taxed at 47%;
- wealth tax applies only to assets located in Spain;
- Form 720 (foreign asset declaration) is not required under the regime;
- Spanish CFC rules under Article 91 LIRPF may nonetheless apply where the taxpayer holds a controlling interest in a low-taxed foreign entity — this should be assessed individually;
- the regime applies for the year of arrival plus five subsequent tax years (six years in total).
Election and filing
The regime is elective, not automatic. Under Article 93 LIRPF and the current AEAT guidance, the applicant must not have been Spanish tax resident in the five preceding tax periods and the move must arise from a qualifying route: employment, qualifying remote work, becoming a company director, a qualifying entrepreneurial activity, or specified highly qualified/start-up, training, research, development or innovation work. Passive residence by itself is not an entry route.
The election is communicated on Modelo 149. For the principal taxpayer, the ordinary deadline is six months from the activity-start date shown in Spanish Social Security registration or the corresponding social-security or other supporting document; the NIE issue date is not the statutory trigger. Annual reporting under the regime uses Modelo 151.
Hong Kong company
The corporate side is a Hong Kong private limited company in which the individual may hold up to 100% of the shares.
It may be a family or consulting SPV, or an operating company. In either case, incoming cash flows are consolidated at this level.
Hong Kong profits tax does not apply to income sourced outside Hong Kong. Two questions have to be kept apart here: source — where the profit-generating activity actually takes place — governs the Hong Kong treatment, and it is not decided by where the company is managed. Place of management governs the Spanish side: management exercised from Spain can make the company Spanish tax-resident or create a permanent establishment there, and an offshore source does not cure that. Management from Hong Kong is therefore not what earns the offshore exemption; it is what keeps the Spanish exposure closed. The offshore claim must be filed and substantiated: the IRD may request evidence of income source, contracts, and decision-making flow.
Company filings and audit
The Hong Kong company remains subject to local corporate and tax administration even where a source claim succeeds. A private company must file Form NAR1 within 42 days after each incorporation anniversary. Its financial statements require audit unless the company has formally obtained dormant status under the Companies Ordinance; having no transactions is not enough by itself.
The IRD generally issues a new company's first Profits Tax Return about 18 months after incorporation. When a return is due, the corporation normally files it with the prescribed tax computation and audited financial statements. The offshore position is tested in that tax process against the profit-producing operations and evidence; incorporation, a registered address or a director's location does not by itself determine source.
Where the Hong Kong company has a genuine business purpose, expenses with a clear business connection may be deductible in computing the profits tax base. Personal expenses that lack a documented business rationale are not deductible; the characterisation of each expense category should be reviewed with a Hong Kong tax adviser.
Where funds are distributed upward, the Hong Kong company pays dividends quarterly or annually. Dividends paid from Hong Kong fall outside the Spanish income tax base under the Beckham Law regime, provided the shareholder does not create a permanent establishment or act as a dependent agent in Spain. CRS reporting through the Hong Kong bank applies regardless of the Spanish tax treatment.
Tax risks and mitigation
Scope. The structure is built around individuals — founders, entrepreneurs, investors, and remote professionals. It is not a group tax planning vehicle. Groups with consolidated annual revenue above EUR 750 million fall within OECD Pillar Two (15% global minimum tax), which applies at the group level regardless of where individual entities are located.
Spanish-source income. Under the Beckham Law regime, income other than employment income stays outside Spanish tax only if it is not obtained in Spanish territory under the non-resident source rules; the account it is paid into does not decide this, and employment income is always treated as Spanish. If the Hong Kong company's management and control are exercised from Spain, it may be treated as Spanish tax resident under the effective-management test of article 8 LIS and required to pay Spanish corporate tax; receiving money in Spain does not by itself have that effect, but activity carried on in Spain can create a permanent establishment.
For dividends to stay outside the Spanish tax base, the shareholder:
- must not be a dependent agent of the Hong Kong company;
- must not create a permanent establishment of the Hong Kong company in Spain.
Dependent agent means a person authorized to conclude contracts on behalf of the company and who regularly concludes them. Under the modern OECD approach, dependent agents also include persons who negotiate the terms of agreements on behalf of the company.
Permanent establishment means a place from which an enterprise conducts its business, meaning it has employees and an office. A home office of employees working remotely may also constitute a permanent establishment.
To reduce PE and dependent-agent risk, the Hong Kong company should have a director with genuine authority to negotiate and sign contracts — typically a local Hong Kong director or a licensed management company. The shareholder may remain on the board for oversight, but should not be the person who negotiates or executes agreements on behalf of the company.
Substance in Hong Kong is required for two independent reasons: to support the offshore profits claim with the IRD, and to avoid a PE finding in Spain. A nominee director without genuine authority satisfies neither. The minimum substance baseline:
- director with real authority, demonstrably acting from Hong Kong;
- registered office and functioning bank account in Hong Kong;
- contracts negotiated and executed in Hong Kong;
- board minutes documenting decisions made in Hong Kong;
- financial statements and profits tax returns filed on time;
- offshore claim filed with the IRD and supported by source-of-income evidence.
Q/A
Must a Hong Kong company and its bank accounts be reported in Spain?
The company’s Spanish tax treatment depends on ownership, management and the applicable anti-avoidance rules, but an individual validly under Article 93 is not required to file Modelo 720 for foreign assets. That exemption does not extend automatically to a spouse or child, and it does not replace Modelo 151, wealth-tax analysis or company-level reporting.
What happens if the IRD rejects the offshore profits claim?
The disputed profit can be assessed to Hong Kong Profits Tax, with interest or penalties depending on the facts and compliance. The corporate two-tier rates are 8.25% on the first HK$2 million and 16.5% above, but only one connected entity may use the lower tier. Source is decided from the profit-producing operations, not from incorporation alone.
How long does the Spain–Hong Kong structure take to assemble?
There is no official single timetable, but the individual steps do carry official periods. The Companies Registry issues the certificates of a private company limited by shares "within 1 hour" on an electronic application and "within 4 working days" on a hard-copy one. On the Spanish side, Article 76 of Ley 14/2013 gives the UGE "veinte días desde la presentación electrónica de la solicitud" to resolve, with the authorisation granted by positive administrative silence if it does not; Modelo 149 has its own evidence and generally a six-month option window. Issuing the TIE card, banking CDD and the first audit cycle have no fixed period at all, so a plan should use the slowest dependency rather than promise a fixed number of days.
Will a Hong Kong bank open an account for a company with a Russian beneficial owner?
No bank approval can be promised. HKMA requires a risk-based assessment of the customer, beneficial ownership, purpose, expected activity and source of wealth or funds; nationality alone should not be the sole reason for rejection, but sanctions exposure and other risks can justify enhanced checks, limits or refusal under the bank’s own policy.
What happens after the six tax periods under Article 93 end?
The special regime covers the tax year in which Spanish residence is acquired and the following five tax periods. If the person remains Spanish tax resident afterwards, the ordinary IRPF rules generally apply from the next period, so worldwide income, foreign-asset reporting, wealth taxes and company management or permanent-establishment risks should be reviewed before the transition.