Application of the Beckham Law as Administrator of a Spanish Subsidiary

Since the reform of the Startups Law (Law 28/2022, of December 21), the “Beckham Law” has expanded its scope. Previously, the case of company administrators had restrictions related to the shareholding percentage.

Requirements to qualify for the Beckham Law as a director

• Not have been a tax resident in Spain in the five tax periods prior to their move.
• The move to Spain must be due to:
  • An employment contract, or
  • Acquiring the position of director of an entity not considered related under Article 18 of the Corporate Income Tax Law, even if owning more than 25 % of the shares.
  • Carrying out entrepreneurial or R&D activities.
• No income should come from a permanent establishment in Spain.
• The application must be filed within six months of registration with Social Security or an alternative insurance entity.

New regulation: No 25 % shareholding requirement

Law 28/2022 removed the 25 % restriction. The determining factor is whether the entity is considered related under the law. This broadens access for directors in Mallorca with minority stakes.

Duties of the Administrator

• Managing and representing the company.
• Duty of diligence and loyalty.
• Calling general meetings and preparing reports.
• Preparing annual accounts and ensuring legal compliance.

Employment contract alongside director status

The Startups Law allows the director’s relocation to be due to both employment and appointment. Caution is needed when both roles coexist, especially for tax and Social Security implications.

TEAC Doctrine and Binding Rulings from the DGT

The TEAC and DGT have clarified the classification of director income under IRPF. Key reference: Binding ruling V1840-20.

Economic substance

It is essential to demonstrate real, physical presence in Mallorca, operational involvement, autonomy, and appropriate remuneration to avoid tax penalties.

Conclusion

The Beckham Law is now more accessible to administrators of subsidiaries in Spain, especially in Mallorca. At Resitax, we offer specialized tax advice to ensure full compliance and maximize the benefits of this regime.