The Beckham Law and the director of a newly incorporated company: an analysis of binding ruling V1200-26

The DGT accepts that moving to Spain to take up the directorship of a newly incorporated company, even with a one hundred per cent shareholding, may give access to the Beckham Law where the entity is not a holding entity. It does not make that conclusion conditional on the company having been incorporated before the move, and administrative practice does not do so either. 

The determining question, whether the services the shareholder renders personally are characterised as business income obtained through a permanent establishment, is referred to articles 17.1 and 27.1 LIRPF without an express finding.

Binding ruling V1200-26, issued on 21 May 2026, has circulated widely among advisers to foreign professionals and entrepreneurs who plan to establish themselves in Spain by incorporating a company. Much of that circulation presents it as a favourable pronouncement, and in some cases attributes to it a practical rule, that the company should be incorporated before the move, which does not appear in its text.

It is worth examining closely what the ruling decides, what it leaves unresolved, and what conclusion, in our view, may properly be drawn from it.

The ruling is binding under article 89.1 of Law 58/2003, the General Tax Act. It binds the Administration in applying the regime to the taxpayer who requested it and expresses the criterion the DGT will apply to cases presenting the same facts and circumstances. It is administrative doctrine, not case law.

Background and question raised

The taxpayer, resident in Belgium, is shareholder and director of a Belgian company providing strategic planning and business expansion services. He intends to incorporate a Spanish company in 2026 with an identical or substantially similar corporate purpose, to move to Spain, and to take up the directorship of that company, receiving remuneration for the office. The Spanish company will initially have no employees, so that the taxpayer will perform the functions of management and direction and will personally carry out the activity. As regards the Belgian company, he puts forward two alternatives: that it cease its activity, or that it continue to exist with his involvement confined to the functions of a shareholder.

The question has two limbs. The first, general, is whether the Beckham Law, the special regime under article 93 LIRPF, applies. The second, more specific, is whether the fact that the director himself carries out the activity affects that application. The second limb identifies precisely the critical point of the case. The reply, however, devotes most of its length to the first and addresses the second conditionally in its final paragraph.

The causal connection

Article 93.1.b).2º LIRPF requires that the move to Spanish territory occur as a consequence of acquiring the position of director of an entity. The DGT infers from this, correctly, that a causal connection must exist between the move and the acquisition of the office, that its absence means the condition is not met, and that the existence of that connection is a question of fact to be evidenced by the taxpayer and assessed by the management and inspection bodies.

Applying that criterion to the facts, the ruling concludes that, if the move occurs, as the taxpayer states, as a consequence of acquiring the directorship of the Spanish company, and that company is not a holding entity, the condition would be regarded as met. That conclusion is reached on facts in which the company does not yet exist, its incorporation being planned for 2026, and in which the move has the purpose of managing it.

It follows that a requirement of prior incorporation does not derive from the ruling. The DGT accepts access to the Beckham Law in a case of incorporation contemporaneous with or subsequent to the move, without qualification as to the order in which the two events occur. Article 93.1.b) LIRPF itself, in allowing the move to take place in the first year of application of the regime or in the preceding year, shows that the legislature did not frame the causal connection as a closed formal sequence.

In our view, the causal connection the provision requires is purposive rather than chronological. What must be shown is that the move to Spain is prompted by the assumption of the directorship, not that the appointment or the incorporation formally precede arrival. The documentary sequence is evidence of that connection, relevant but not decisive in itself, and its probative weight depends on the substance of the business project rather than on the date of the instruments. Advising that the company be incorporated from abroad for purely tax reasons introduces unnecessary complexity and has no bearing on the risk the case actually presents, which is examined below.

Administrative practice is consistent with this reading. In our experience, the Administration has been accepting the election of the Beckham Law by taxpayers who move to Spain, incorporate the company here and take up its directorship, in that order, where the circumstances as a whole show that the move responds to the business project. The scope of that observation should be stated precisely. The acknowledgement issued by the tax authority following notification of the election is not a verification that the conditions are met and does not preclude a later assessment. It does show, however, that the management bodies are not requiring prior incorporation as a condition of access.

A further point, which the ruling does not develop, deserves mention. In the case of an executive hired by an existing entity, the causal connection is verified by reference to the offer, the contract and the start date. In the case of a shareholder who incorporates a company in order to manage it, the office and the move are expressions of a single decision, and the relationship between them does not lend itself to the same form of verification. We consider that, in such a case, the connection is established by evidence that the business project is real, has substance and motivates the move, as against the hypothesis of a move made for other reasons to which the incorporation of a company is subsequently added.

Chronology does become relevant in relation to the acquisition of tax residence. If the taxpayer remains in Spanish territory for more than one hundred and eighty-three days in a year for reasons unconnected with the project, acquires residence under article 9.1 LIRPF and incorporates the company thereafter, the Administration will have grounds to contend that the move was not a consequence of the office. The practical conclusion is not early incorporation but the desirability of the project being under way and documented from the time of the move. The business plan, the application for a tax identification number for that purpose, the client portfolio in transition, the lease of premises or correspondence with advisers concerning the incorporation carry greater probative weight as to the causal connection than the date of the deed.

The director's shareholding in the entity

The ruling resolves this point clearly. The limitation on the director's shareholding introduced by Law 28/2022 operates only where the entity qualifies as a holding entity within the meaning of article 5.2 of Law 27/2014 on Corporate Income Tax, that is, where more than half of its assets consist of securities or of assets not used in a business activity. A company that provides services to third parties and invoices for them does not meet that description, and the director may hold one hundred per cent of it without affecting access to the Beckham Law, even though that shareholding gives rise to a related-party relationship within the meaning of article 18 of the same law.

It need only be added that the status of non-holding entity must be maintained throughout the application of the regime, and that a service company which accumulates cash not applied to the business may acquire holding status over time. This is not a question of access but of continued eligibility, and it requires monitoring.

The condition in article 93.1.c) LIRPF

Article 93.1.c) LIRPF requires that the taxpayer not obtain income that would be characterised as obtained through a permanent establishment in Spanish territory, save in the cases provided for in paragraph b).3º and 4º, relating to entrepreneurs and highly qualified professionals. The taxpayer has stated that he will personally carry out the activity constituting the corporate purpose. The DGT indicates that, having regard to articles 17.1 and 27.1 LIRPF for the characterisation of remuneration for services rendered by the shareholder to the company other than those deriving from his position as director, the condition would not be met if the taxpayer obtained business income through a permanent establishment.

The formulation is conditional, but the reference to article 27.1 LIRPF has a precise content. Its third paragraph provides that income obtained by a taxpayer from an entity in whose capital he participates, deriving from activities included in the second section of the tariffs of the Tax on Economic Activities, is characterised as business income where the taxpayer is registered in the special social security scheme for self-employed workers or in an alternative mutual provident society. Strategic planning and business expansion services constitute a professional activity for these purposes. A sole shareholder who holds the directorship of a commercial company is compulsorily registered in the special scheme for self-employed workers.

The three elements of the rule are therefore present. Remuneration the taxpayer receives from the Spanish company for services he renders personally to clients, to the extent it exceeds what corresponds to his position as director, is characterised as business income. A professional activity exercised personally from Spain, with the company as the invoicing vehicle, is carried on through a permanent establishment within the meaning of article 13.1.a) of the consolidated Non-Resident Income Tax Act, which defines it by reference to the availability of a place of work in which all or part of the activity is carried out. In those circumstances the condition in paragraph c) would not be met.

The reply does not state that conclusion expressly, which is understandable given the general terms in which the facts are described. The indication is nonetheless unequivocal. To the question whether it matters that the director himself carries out the activity, the answer that follows from the applicable legislation is that it does.

One alternative remains within the scheme itself, and its scope is limited. If the whole of the taxpayer's remuneration derives from his position as director, with the office remunerated as provided in the articles of association in accordance with article 217 of the Companies Act and with no separate contract or remuneration for the provision of services, that income is employment income under article 17.2.e) LIRPF, is deemed obtained in Spanish territory in its entirety under article 93.2.b) LIRPF and is taxed under the Beckham Law. That formal configuration does not, however, alter the fact that the director personally performs the services invoiced, and the Administration retains the power to recharacterise in the course of an assessment. The closer the identity between the company and the individual professional activity of its director, the weaker the position.

The company of origin

The taxpayer put forward two alternatives regarding his Belgian company. The reply does not address either, and both warrant consideration.

If the Belgian company continues with the taxpayer's involvement confined to the functions of a shareholder, there arises the question, common to any foreign entity whose sole shareholder and director moves his residence to Spain, of the location of its place of effective management and, consequently, of its tax residence under article 8.1.c) of the Corporate Income Tax Law. If the Belgian company also retains clients and the taxpayer takes part in its management from Spanish territory, even incidentally, the existence of a permanent establishment of that company in Spain may be raised. Neither of these matters directly affects the Beckham Law, but both bear on the taxpayer's overall tax position.

If the Belgian company ceases its activity, the position is clearer, although the cessation and the transfer of the client base to the Spanish company should be documented. A de facto continuation of the same activity with the same clients could be interpreted, in the course of an assessment, as a mere relocation of the taxpayer's professional activity to another jurisdiction, which would reinforce the argument concerning the permanent establishment.

Assessment

As to what it decides, the DGT's position is, in our view, correct. The requirement of a causal connection is that laid down by the law, the interpretation of the shareholding limitation accords with the provision, and the reference to articles 17.1 and 27.1 LIRPF identifies the critical point of the case with precision.

More open to question is the asymmetric treatment the reply gives to the two limbs of the question raised. It dwells on the limb presenting less difficulty and addresses by way of a conditional the limb that constitutes the real subject of the doubt. That asymmetry largely explains why the ruling has circulated as a favourable pronouncement when a complete reading leads to a conclusion of a different character. A reply that had stated expressly that the personal performance of professional services through a company in which the taxpayer holds shares engages the rule in article 27.1 LIRPF and compromises the condition in paragraph c) would have contributed more to legal certainty.

A further observation may be made on the configuration of the Beckham Law following Law 28/2022. The reform extended access to directors of non-holding entities without limitation on shareholding, with the stated purpose of attracting business projects. It maintained, however, the exclusion of income obtained through a permanent establishment for that route of access, while excepting entrepreneurs under paragraph b).3º from it. The result is that a person who accesses the regime as a director may manage his company but not personally carry on its activity, whereas a person who accesses it as an entrepreneur may do both. The reason for that difference in treatment is not apparent.

From this follows the practical conclusion we consider most significant. For a professional who will personally render the services of his company, the director route presents a structural weakness. The entrepreneur route under paragraph b).3º, which requires that the activity be entrepreneurial, innovative or of special economic interest and have a favourable report from ENISA, expressly permits income obtained through a permanent establishment. Not every consulting activity satisfies that requirement and the report is not a mere formality, but it is the only one of the two routes whose configuration corresponds to the activity the founder will actually carry on in Spain.

Concluding observations

Ruling V1200-26 confirms what already followed from the law and refrains from deciding what the law refers to the characterisation of income. It does not require incorporation of the company before the move, a requirement contained neither in the legislation nor in administrative practice. It accepts a one hundred per cent shareholding in non-holding entities. And it warns, without developing the point, that a shareholder who personally performs the services of his company faces the rule in article 27.1 LIRPF and, through it, the failure of the condition relating to the permanent establishment.

For anyone planning a transaction of this kind, the order of analysis should be the reverse of that suggested by the summaries in circulation. First, determine what activity the founder will actually carry on in Spain and how it will be remunerated, since the characterisation of his income, and with it access to the Beckham Law, depends on that. Second, decide on the basis of that answer which route of access under article 93.1.b) LIRPF applies, assessing the viability of the entrepreneur route, the only one compatible with the personal provision of services. Third, if the director route is chosen, equip the company with the organisation necessary for the functions of direction and of execution to rest with different persons. And only lastly, document the chronology of the move, which is evidence of the causal connection but not its foundation. The burden of proving all of these matters rests on the taxpayer under article 105.1 of the General Tax Act, and the file that supports them must be assembled before any assessment proceedings begin.

Lullius is a tax boutique based in Palma de Mallorca specialising in international tax, private wealth and tax litigation. The authors contributed the Spain chapter to the tax litigation guides of both Chambers and Partners (Tax Controversy 2026) and The Legal 500 (Tax Disputes Comparative Guide 2026).

Legal notice. This article is provided for general information only. It reflects the position as at September 2026 and does not constitute legal or tax advice, nor does it create a lawyer-client relationship. No action should be taken, or refrained from, on the basis of its content without specific professional advice on the particular facts. Lullius accepts no responsibility for any loss occasioned by reliance on this material.