While other European hubs compete for attention, Spain quietly maintains its position as the go-to gateway for Latin American capital flowing into Europe. With over 600 Latin American companies now established in Spain and cumulative investments exceeding €66.8 billion since 1993, this isn’t just about shared language anymore; it is about innovative business.
The Double tax treaty advantage nobody’s talking about
Here’s where Spain gets seriously interesting for Latin American investors.
Spain has signed double taxation treaties with 15 Latin American countries, including Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Cuba, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, the Dominican Republic, and Uruguay. But the real power move? How these treaties actually work in practice.
Think of it this way: Without these agreements, your Colombian subsidiary’s profits could get taxed twice—once in Colombia, again when they reach you. Spain’s treaties eliminate this pain point while providing legal certainty that local interpretations won’t suddenly change the rules.
Spain has the most tax treaties with Latin American countries, and this isn’t by accident. The country deliberately built this network to position itself as the bridge between continents.
The ETVE
Ever heard of an ETVE? Most people haven’t, and that’s precisely why savvy investors love it.
The Entidad de Tenencia de Valores Extranjeros (ETVE), Spain’s international holding company regime, is one of Europe’s best-kept secrets. Introduced in 1995, this structure allows foreign-source dividends and capital gains to be taxed at an effective rate of just 1.24%.
Here’s the kicker: Dividends distributed by an ETVE to non-resident shareholders aren’t subject to Spanish withholding tax. That means cleaner, more efficient profit repatriation without the tax leakage that plagues other structures.
Latin American investors using ETVEs can consolidate their European operations into a single Spanish holding company, leverage Spain’s extensive treaty network, and repatriate profits with minimal friction. A UK investor investing in Colombia with a 5% stake would face 15% withholding tax on dividends, but through an ETVE, this drops to just 5% due to Spain’s treaty.
Company types in Spain for businesses
Spain offers flexibility without the bureaucratic nightmare you might expect.
The SL: Your starting point
The Sociedad Limitada (SL) requires a minimum share capital of just €3,000, making it accessible for companies testing European waters. Think of it as Spain’s version of an LLC—straightforward, protective, and perfect for small to medium operations.
The SL provides limited liability protection while offering simplified bookkeeping and reporting obligations. For Latin American entrepreneurs unfamiliar with European regulations, this simplicity matters enormously.
The SA: When you are ready to scale
A Sociedad Anónima (SA) requires a minimum capital of €60,000 and allows for publicly traded shares. This structure suits companies planning significant growth, international investment rounds, or eventual stock exchange listings.
What most advisors won’t tell you: Both SL and SA types are subject to the same Spanish Corporate Income Tax rules, so your choice depends purely on operational needs rather than tax optimization.
The lesser-known SLNE
Here’s where it gets interesting for tech startups and digital businesses. The Sociedad Limitada Nueva Empresa (SLNE) offers a streamlined online incorporation process with a minimum capital of just €1.
While less common, it’s designed specifically for quick market entry—perfect for Latin American digital companies wanting to establish a European presence without heavy upfront investment.
EU market access
Spain’s EU membership provides seamless access to a market of over 450 million consumers. But here’s what makes Spain different from other EU entry points.
The cultural acceleration factor
In 2023, Latin American investment in Spain surged 138% to €2.83 billion, with Mexico accounting for 58% of that total. This isn’t random—shared language and business culture dramatically reduce the friction of international expansion.
When your Mexican executives can conduct board meetings in Spanish, understand local business etiquette instinctively, and navigate regulations with familiar legal concepts, your time-to-market shrinks dramatically.
The unexpected European outperformance
Here’s a stat that should grab your attention: While the EU as a whole grew by 0.9% in 2024, Spain’s economy expanded by 3%, with forecasts of 2.3% growth in 2025 and 2.1% in 2026.
Spain isn’t just a gateway. It’s an active, growing market in its own right. Latin American companies aren’t simply passing through; they’re establishing real operations that serve both Spanish and broader European markets.
Beyond Europe: The Africa and Middle East bonus
Spain offers an ideal launch pad not just for EU markets, but also for Africa and the Middle East. This geographic positioning means your Spanish subsidiary can serve three continents from one strategic location.
The robust infrastructure
Let’s be honest, setting up anywhere involves challenges. Spain requires patience with bureaucracy, and payment terms can stretch to 90-120 days in some sectors.
But here’s what matters: Spain has been actively streamlining foreign investment processes. The country’s modern infrastructure, skilled workforce, and increasingly digital administrative systems make it far more accessible than even five years ago.
Latin America is now the fourth-largest investor in Spain, with over 44,000 direct jobs created by Latin American companies. This growing ecosystem means you’re not pioneering alone; there’s established infrastructure and networks to support your expansion.
The bottom line
Spain remains Latin America’s European gateway not through nostalgia, but through deliberate structural advantages: the most extensive Latin American tax treaty network, the tax-efficient ETVE regime, flexible company structures, and genuine market growth outpacing most of Europe.
For Latin American investors, the question isn’t whether Spain makes sense. It’s whether you can afford to ignore these advantages while your competitors capitalize on them.
At C2Z Advisory, we help businesses navigate the complexities of Spanish expansion. Whether you are a tech startup looking for your first regional office, a logistics company seeking to optimise supply chain operations, or an FMCG business planning regional distribution, Spain offers compelling strategic advantages.
