B Law & Tax
26 March 2024

Beckham Law: Encouraging Foreign Investment and Talent in Spain

The Beckham Law, popularly referred to as such in reference to the English footballer David Beckham, who was one of the first beneficiaries of this regime, constitutes a tax provision in Spain conceived with the purpose of incentivizing the attraction of talent and foreign capital to the country. Initially associated with elite athletes, the application of its benefits has expanded to a wide range of workers, professionals, entrepreneurs, and investors who choose to relocate their residence to Spain. 

As of January 1, 2023, the requirements to benefit from this special tax regime for displaced employees have been relaxed. This modification makes it easier for a larger number of individuals to benefit from a fixed tax rate of 24% on income earned in Spanish territory, up to €600,000 annually. For income exceeding this amount, the marginal rate of 47% applies. 

This regime is applicable during the current year in which the applicant arrives in Spain and the following five years. The update to the Beckham Law is part of a broader strategy by Spain to attract skilled workers, investors, and digital entrepreneurs, adapting to the new realities of remote work and the digital economy. Among the introduced modifications is the reduction of the non-residence period in Spain required before relocation, which is reduced from ten to five fiscal years, thus expanding the spectrum of eligible individuals for the regime. 

Additionally, a more exhaustive list of criteria has been established to qualify for this special regime, including the possibility of working remotely from Spain for foreign employers without the need for a formal relocation by the company. In addition to the direct tax benefits for expatriates, the Beckham Law encourages the arrival of talent and foreign capital, contributing to the dynamism of the national economy. 

However, access to this regime is subject to compliance with a series of specific requirements and conditions, which may require specialized advice. For example, income classified as derived through a permanent establishment located in Spanish territory should not be obtained, and there are particular considerations for company administrators in Spain.

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