US Business Owners in Spain: Structure Without Surprises

End-to-end tax advisory for US founders and executives who reside or plan to reside in Spain: LLC, check-the-box, Beckham Law, Form 720, ITSGF, and US × Spain structure.

Why a US × Spain structure needs a joint diagnostic — not advisors working in silos

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Zero contingencies
Our goal in every AEAT relationship — achieved through upfront diagnostic and preventive compliance
Day 1
Coordination starts before Spanish tax residency is established, not after a problem arises
Dual coverage
Spanish tax advisor + direct coordination with the client's US advisor on every decision
4.8/5 on Google · 50+ reviewsSince 2007 · 19 years of experience5 offices in Spain500+ clients
Responsible team
MJManuel Jimenez· Founder and Managing DirectorAGAna Garcia Montoya· Partner - Tax Division
Our approach

How we work

01

US × Spain Structure Diagnostic

We analyze every US entity the client holds: legal type (LLC, C-Corp, S-Corp, partnership), current or pending check-the-box election (Form 8832/2553), ownership percentage, and whether the client is a US person or green card holder. We cross-reference that information against Spanish tax treatment: is the LLC opaque under Art. 8 LIS (RLIS list)? Does an applicable treaty alter the classification? Is there a permanent establishment in Spain? The output is a risk map with each entity positioned and priority actions identified. This diagnostic is the foundation for everything that follows — and the only way to prevent each country's advisor from optimizing in a silo without seeing the full picture.

02

Structuring or Restructuring

With the diagnostic in hand, we design the optimal structure. The most common alternatives for business owners with a presence in both countries include: keeping the LLC with a check-the-box disregarded entity election and reporting income directly on personal income tax (IRPF) or under Beckham Law; interposing a Spanish SL that acts as an ETVE (holding company for foreign securities) where there are subsidiaries in third countries; evaluating whether a Spanish holding company is more efficient than a US C-Corp for channeling international investments; and confirming whether the CDI ES-US allows crediting US taxes paid against the Spanish liability to eliminate double taxation. Restructuring is documented before execution: check-the-box status changes have US consequences (deemed liquidation under IRC §301.7701-3) that must be assessed before any action is taken.

03

Dual Ongoing Compliance

We manage annual Spanish tax compliance: Form 720 (declaration of overseas assets, with particular attention to US bank accounts, LLC ownership interests, and investment accounts exceeding €50,000); ITSGF if net wealth exceeds €3,000,000 under the thresholds in Art. 3 Ley 38/2022; IRPF or Form 151 (Beckham) covering all Spanish-source income and the exemption or inclusion of US-source income; and the Spanish SL corporate tax return if one exists. We coordinate with the client's US advisor on Form 5471 (where the client is a US person with a controlling interest in a Spanish entity), Form 8858 (disregarded entities), and FBAR/FinCEN 114.

04

Exit Planning and Succession

Leaving Spain — or the entry of heirs who are US residents — triggers obligations that few advisors anticipate. The Spanish exit tax (Art. 95 bis LIRPF) may apply if the client has accumulated more than ten years of Spanish tax residency and holds ownership interests with unrealized gains above the statutory thresholds. The CDI ES-US has specific rules on real estate income, royalties, and capital gains that determine which country has exclusive taxing rights. We plan exits with at least 24 months of lead time: ownership structure, type of replacement residence, and the interaction between exiting the Beckham regime and the exit tax consequences. We also cover cross-border succession planning where assets are held in both jurisdictions.

The challenge

Combining Spanish tax residency with assets, ownership interests, or income in the United States creates one of the most demanding scenarios we handle. At BMC we see the same systematic errors that generalist firms consistently miss: LLCs treated as pass-through entities in the US but as opaque corporations in Spain under an incorrect reading of Art. 8 LIS; check-the-box elections that do not bind the Spanish tax authority; Beckham Law applications filed without coordinating the pre-existing LLC structure; and US investment accounts left off Form 720 because 'the American advisor didn''t ask.' The result is audit exposure that could have been avoided from day one with a joint US + Spain diagnostic.

Our solution

We advise on the structure from both sides of the Atlantic. The initial diagnostic combines a review of the check-the-box status of each US entity with an analysis of how that entity is taxed in Spain under Art. 8 LIS and the Spain–US income tax treaty (CDI ES-US, BOE-A-2019-15166). Where Beckham Law is in play, we coordinate Form 149 with the tax classification of LLC income to prevent incompatibilities from emerging later. We manage ongoing compliance: Form 720 (overseas assets), ITSGF (Temporary Solidarity Wealth Tax), corporate tax or personal income tax depending on the structure, and the interaction with US obligations (Form 5471 or Form 8858 for controlled entities, and FBAR/FinCEN 114). We close the loop with an exit or succession plan that accounts for both Spanish law and FATCA.

For a US founder or business owner who establishes Spanish tax residency, the challenge is not choosing between the American and Spanish tax systems: it's managing both at the same time. Spain taxes its residents on worldwide income and wealth. The United States taxes its citizens and green card holders regardless of where they live. The overlap creates obligations in both jurisdictions that are rarely well-coordinated when the US advisor and the Spanish advisor work without talking to each other.

At BMC we advise on this structure from both sides of the Atlantic. We always start with the joint diagnostic: what entities does the client hold in the US, how does the AEAT classify them under Art. 8 LIS, what does the Spain–US treaty say about each income category, and how does all of that fit with Beckham Law, Form 720, and ITSGF. Only with that complete picture on the table does it make sense to talk about optimal structure.

Why a US × Spain Structure Needs a Joint Diagnostic — Not Advisors Working in Silos

The most common error we see at BMC is not a lack of tax knowledge: it’s poor coordination. The US CPA optimizes the LLC for the IRS and does not know — nor is expected to know — how the AEAT will classify it. The Spanish advisor files the IRPF return without asking what sits behind that Delaware ownership interest. The result is a structure that works well in each jurisdiction in isolation but creates a gap in the middle: undeclared income, assets left off Form 720, or a Beckham Law regime that conflicts with the LLC’s check-the-box status.

The question no one asks is: how does Spain view what the US has classified one way? The answer is that Spain does not recognize check-the-box elections. The AEAT applies its own criteria for treating foreign entities as transparent or opaque, and an LLC that the IRS treats as a disregarded entity can be perfectly opaque to the Spanish tax authority if its legal structure resembles a capital company.

How BMC Approaches Dual Taxation for US Business Owners in Spain

The starting point is always the diagnostic: before proposing any structure, we map every entity with its tax classification in each jurisdiction. From there, the design follows the logic of the client’s problem — not the logic of the available tax product. Some clients need to keep the LLC and coordinate it correctly with Spanish IRPF. Others benefit from interposing a Spanish SL as an intermediate link. Others have a clear Beckham profile and need that regime to be compatible with their US structure before filing Form 149.

What we never do is recommend a structure without first validating its US consequences with the client’s US advisor. And what we always do is document the analysis: the AEAT can audit, and documentation of the decisions taken — with their regulatory basis — is the best defense.

What Our Service for US Business Owners Resident in Spain Includes

  • US × Spain tax diagnostic: classification of each US entity under Art. 8 LIS and analysis of the CDI ES-US for relevant income categories.
  • Structure design: LLC, SL, ETVE, or holding structure based on the client’s profile, with bilateral coordination with the US advisor.
  • Form 149 (Beckham Law) coordinated with the US structure: preventing incompatibilities between the special regime and the LLC’s check-the-box status.
  • Annual Form 720: identification of declarable assets, preparation, and filing with conservative criteria before the AEAT.
  • ITSGF: worldwide wealth valuation and tax calculation if the Art. 3 Ley 38/2022 threshold is exceeded.
  • Coordination on Form 5471/8858 and FBAR/FinCEN 114: information exchange with the US advisor to ensure consistency between returns in both countries.
  • Exit planning: Spanish exit tax (Art. 95 bis LIRPF), CDI ES-US effects on divestment, and orderly tax close-out of the period of residency.

Frequently Asked Questions About US × Spain Taxation for Business Owners and Founders

Track record

The experience behind our work

I'd been in Spain for three years with a Delaware LLC and thought everything was fine. My US CPA was filing taxes there, and I never asked further questions. BMC explained to me that the Spanish tax authority applies its own criteria to classify my LLC — my US check-the-box election does not bind it — and that my Fidelity investment accounts needed to appear on Form 720. We restructured everything before an audit could happen. That initial diagnostic was the best thing I invested in that year.

US-headquartered B2B software company with a team in Spain (representative profile)
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Experienced team with local insight and international reach

What our service for US business owners resident in Spain includes

US × Spain DiagnosticStructuring and RestructuringForm 720 — Overseas AssetsBeckham Law × LLC CoordinationDual Ongoing ComplianceExit Planning and Succession

US × Spain Diagnostic

Map of every US entity with its Spanish tax classification (Art. 8 LIS), its check-the-box status, and the impact on the client's IRPF or corporate tax. Risk prioritization and action plan.

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Structuring and Restructuring

Design of the optimal structure based on the client's profile (Beckham or standard regime, disregarded LLC or corporation, Spanish holding or ETVE, CDI ES-US as a shield against double taxation).

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Form 720 — Overseas Assets

Identification of declarable assets (bank accounts, LLC interests, investment portfolios, real estate), preparation, and annual filing with conservative criteria before the AEAT.

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Beckham Law × LLC Coordination

Coordination of Form 149 with the tax classification of LLC income to ensure the special regime does not conflict with the pre-existing US structure.

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Dual Ongoing Compliance

Management of IRPF or Form 151 (Beckham), Spanish SL corporate tax where applicable, ITSGF if triggered, and coordination with the US advisor on Form 5471, Form 8858, and FBAR/FinCEN 114.

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Exit Planning and Succession

Spanish exit tax (Art. 95 bis LIRPF), exit structure under the CDI ES-US, cross-border succession of assets in the US and Spain, and orderly tax close-out of the period of residency.

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Publications

Analysis and perspectives

FAQ

Frequently asked questions about US × Spain taxation for business owners and founders

No. The check-the-box election (Form 8832 or Form 2553) is a US tax law mechanism that allows certain entities to choose how they are taxed for US federal purposes under the IRC. The AEAT applies its own criteria to classify foreign entities: specifically, Art. 8 LIS and the RLIS (the corporate tax regulation) include a list of foreign entities treated as opaque (taxed as corporations in Spain) or transparent (income attributed directly to the partners). A US LLC that has elected disregarded entity status for US federal purposes can still be classified as opaque by the AEAT if its legal structure more closely resembles a capital company than an income-attribution entity. The result is that the LLC is taxed in Spain as a company — unaffected by the US check-the-box election — and the income does not automatically flow through to the resident partner's IRPF. This mismatch is the most common source of planning errors in US × Spain structures.
The LLC itself does not determine your Spanish tax residency. What determines residency is spending more than 183 days in Spain in a calendar year (Art. 9.1.a LIRPF), or having the core of your economic activities or interests located in Spain (Art. 9.1.b LIRPF). If you have a US LLC, operate from Spain, and have your family and home here, the AEAT can conclude that Spain is your tax residence even if all of the LLC's revenue is American. The LLC does not protect you from Spanish tax residency; only structuring it correctly from the outset can mitigate that risk.
The special impatriate regime under Art. 93 LIRPF (Beckham Law) means the taxpayer is taxed in Spain as a non-resident during the regime's validity. The Form 720 obligation applies to Spanish tax residents. While the Beckham regime is active, there is generally no obligation to file Form 720. This is one of the regime's key advantages for business owners with significant assets in the US: they do not have to declare their American accounts, ownership interests, and portfolios while Beckham is active. However, when the regime expires (year seven and beyond), the taxpayer returns to standard IRPF and the Form 720 obligation revives for assets that exceed the statutory thresholds. Planning this transition is critical.
If you are a US citizen, green card holder, or US tax resident and you hold a controlling interest (generally ≥50% of voting power or value) in a foreign corporation — including a Spanish SL — you must file Form 5471 with the IRS as part of your annual federal return. Failure to file Form 5471 carries penalties of $10,000 per form per year. Many American business owners with a Spanish SL are unaware of this obligation because their Spanish advisors do not manage the US dimension. We coordinate with the client's US advisor to ensure the Spanish SL is correctly reported on the federal return.
The ETVE (Arts. 107-108 LIS) is designed to hold interests in non-resident entities and benefit from the non-withholding treatment for dividends distributed to non-resident shareholders. For a US business owner resident in Spain, an ETVE can be efficient if they have operating subsidiaries in multiple countries and want to centralize holdings under a Spanish holding structure. For passive financial investment assets in the US (publicly traded stocks, ETFs, investment accounts), an ETVE is not the right vehicle: those assets do not generate dividends from "investee entities" within the meaning of Art. 21 LIS, but rather ordinary capital income. We analyze each situation individually to assess whether the ETVE makes sense for a given client.
It depends on how the AEAT classifies the LLC under Spanish law. If the AEAT treats the LLC as an opaque entity (a legal person for Spanish purposes), the income is taxed at the LLC level as a non-resident entity with a permanent establishment in Spain (if it operates from here) — or not taxed in Spain at all until the LLC distributes dividends (which would then be taxed as capital income). If the AEAT treats it as transparent (an income-attribution entity under Art. 8 LIS and the RLIS), the income is attributed directly to the resident partner and taxed under that partner's IRPF for the year the income is earned — regardless of whether the LLC distributes it. The CDI ES-US may modify this analysis for certain categories of income. Classification must be resolved in the initial diagnostic, before any planning decisions are made.
Spanish tax residents are subject to personal liability for Wealth Tax (IP) or the Temporary Solidarity Wealth Tax (ITSGF, Art. 3 Ley 38/2022) on their worldwide net wealth — assets in Spain and abroad alike. US bank accounts, LLC interests, investment portfolios, and real property in the US are all included in the tax base. The CDI ES-US does not contain specific rules for IP/ITSGF (it is an income treaty, not a wealth treaty), so any double wealth taxation must be addressed, where possible, through a credit for US taxes paid if an analogous tax exists. The ITSGF threshold is €3,000,000 of net wealth; below that, the regional Wealth Tax may apply with varying exemptions depending on the autonomous community.
The Spain–US Double Taxation Convention signed in 1990 (BOE-A-2019-15166) and its 2013 Protocol allocate taxing rights between the two countries across the main income categories: employment, dividends, interest, royalties, capital gains, and real estate income. The treaty does not automatically eliminate double taxation: it sets which country may tax and at what maximum rate, and requires each country to grant a credit for tax paid in the other. For business owners with US-source income who are resident in Spain, the treaty is generally favorable on dividends (maximum 15% withholding in the US for interests below 10%, or 5% for larger stakes) and interest (15% in general). But the concrete application of the treaty requires case-by-case analysis: the LOB (Limitation on Benefits) clause can deny treaty benefits to certain structures.
Some advisors propose this strategy, but it carries significant risk. The Spanish exit tax (Art. 95 bis LIRPF) applies when the taxpayer loses Spanish tax residency having been a resident for at least ten of the previous fifteen years. The Beckham regime, with its maximum six-year duration, theoretically does not reach the ten-year threshold on its own. But if the business owner was a Spanish resident before Beckham (for example, two years of prior residency + six under Beckham = eight years) and then leaves, the count can approach the threshold. In addition, unrealized gains must exceed the value thresholds (€4,000,000 in qualifying interests, or €1,000,000 if the interest exceeds 25%) for the exit tax to trigger. The analysis must be done individually and well in advance — never at the last minute.
BMC handles exclusively the Spanish tax dimension. We are not CPAs or US-licensed attorneys and do not prepare federal or state returns in the United States. What we do is actively coordinate with the client's US advisor: we explain the Spanish implications of US decisions (a check-the-box status change, an LLC distribution, a stock sale), and we ask for confirmation of the US implications of Spanish decisions (a restructuring that interposes a Spanish SL, a change in ownership percentage). That bilateral coordination is the core of the service: without it, each advisor optimizes in their own silo and the client ends up paying double.
Quick assessment

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Does my US LLC get taxed in Spain as an opaque entity or a pass-through, and what does that mean for my IRPF?

Do I have to report my US accounts and LLC interests on Form 720 even though I already pay tax on them in America?

Is the Beckham Law regime I applied for compatible with my LLC structure, or is there a tax time bomb ticking?

How do I avoid paying tax in both Spain and the US on the same income from my American company?

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US Business Owners Living in Spain

Tax

Glossary

Key terms

Permanent Establishment

A permanent establishment (PE) is the significant and stable presence of a foreign company in a…

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Beckham Law

The Beckham Law is the colloquial name for Spain's special tax regime for inbound workers…

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Modelo 720 (Foreign Asset Declaration)

Modelo 720 is an informative tax declaration that Spanish tax residents must file when they hold…

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