You are a non-resident, and you are planning to invest in Spain. You have the intention to buy a property to conduct economic activity such as rental.

If that’s your case, you could either decide to buy the property as an individual or as a Spanish limited company.

BUY-TO-RENT AS AN INDIVIDUAL

• LESS BUROCRACY: as a company, you would need ongoing legal and accounting services to comply with annual obligations and potential Tax Office checks.
• LESS COMPLEXITY: process of purchase is much more straight-forward and avoids the complexity of corporate law.
• RENTAL INCOME TAX: if you are buying to rent, you would pay 24% on your gross income if you are non-EU tax resident or 19% on your net income if you are EU tax resident.
• CAPITAL GAIN TAX: you would be subject for payment of capital gain tax on the profit you make after the sale (19% on the net capital gain).

BUY-TO-RENT AS A SPANISH LIMITED COMPANY

• DEDUCTION OF EXPENSES: as a company based in Spain, you could offset expenses related to the rental regardless your tax residency.
• COMPLEX STRUCTURE: the process of purchase would be more complex as it is necessary to set up the company before. The company would need a loan from the shareholders to purchase the property. This loan could include an interest that would be also deductible as an expense.
• CAPITAL GAIN TAX: company could deduct all related expenses (management fees, interests of the loan, depreciation of the property, etc) and result in a nil capital gain.

If the property is intended to be your main or secondary residence, it may be simpler and more tax-efficient to buy as an individual.

However, if you plan to buy-to-rent, you would definitely need to consider purchase through  a Spanish limited company.