Offshore: keeping a company in Spain costs €10,000 a year

Offshore: the €10,000 bill that doesn't appear in the brochure

Keeping an active company in Spain costs in the region of €10,000 a year even with zero revenue. The figure, which circulates among those comparing corporate structures, is the starting point of a discussion that ranges across tax havens, foreign credit cards, passports and straw men, and that almost never gets down to the detail of what it really costs to cross the fiscal border.

The calculation most often repeated in the private sector breaks that amount down into the corporate self-employed contribution —over €4,000 a year, whether or not you earn anything— and the inevitable accountant, around €6,000 more, given the accounting complexity. Against that, a basic extraterritorial structure is quoted at around €1,500 to set up and €500 a year to maintain in jurisdictions that don't require filing accounts. The comparison is misleading —it doesn't measure the same thing— but it explains why the topic attracts interest from entrepreneurs with mid-level incomes, not just large fortunes.

What is legal and what isn't in an offshore company

The first distinction made is technical: an offshore company is an extraterritorial entity with its own tax and legal personality that allows operating outside that territory without paying local taxes or suffering double taxation. It is used for non-EU invoicing of intangible services, buying and selling know-how, royalties, maintaining online shops or holding assets. None of that is a crime in itself.

The problem appears at the second step. If the tax resident in Spain is the one making decisions from their living room, the tax authorities can interpret that a permanent establishment exists and make a claim. The permanent establishment doctrine is what turns a clean structure into a lawsuit: activity is taxed where it takes place, but effective management carries weight. That's why serious setups include local directors with no shareholding, and that's also why the straw man is the most delicate piece of the machinery.

Modelo 720 and the obligation that never expires

Here comes the fact that makes people most uncomfortable. The obligation to declare assets abroad above €30,000 —including houses, land, art and shares, with gold exempt— never expires. Someone who kills a person has a statute of limitations; someone who forgets to report an account or a company abroad does not. It's the criticism repeated most often, and the one pushing many to consider giving up tax residency in Spain rather than setting anything up.

The alternative gaining ground in the conversation is not the shell company, but genuine residence in another country. Territorial tax systems —Andorra, Panama, Costa Rica, Paraguay and a long list— only tax what is generated within their borders. Panama, with more than 183 days of presence, allows you to pay tax there and not on foreign income, digital nomad visa included. The trade-off is quality of life and safety: Panama's homicide rate stands at 12.9 per 100,000 inhabitants versus Spain's 0.68, according to the figures being cited.

Banks, cards and the end of opaque banking

The story of the foreign credit card as a silent spending tool has an expiry date. The automatic exchange of financial information (CRS) covers most jurisdictions, and an account peine with British documentation reports to the United Kingdom, not to the country where you actually live. Dual nationality doesn't erase the reporting: it redirects it.

What does still work, according to the experience being shared, is US banking for non-residents. Wells Fargo opens accounts in person at a branch, especially in Miami, and there are private banks that open them remotely via video call with basic KYC, with a minimum deposit of $50,000 in the first month. For legal entities the path is less narrow than for individuals, and some suggest the new European regulation will be resolved with a contractual clause declaring that the client approached the bank on their own initiative.

The €100,000 net threshold

The practical question is how much you need to earn for the whole setup to pay off. The most frequently repeated answer puts the break-even point at €100,000 net a year. Below that, between advice, management, accounting and the risk of inspection, the collar costs more than the dog. Above it, it starts to make sense to talk to experts outside Spain and pack your bags.

The consensus, if there is one, is that the hard part isn't tax engineering but generating the income. And that most SMEs lose more money through bad management than through taxes. With those numbers on the table, the question isn't whether an offshore is worth it, but how many of those who set one up have enough income to keep the structure from eating it all.