Recent changes to the UK tax framework are driving a sustained outflow of senior executives, entrepreneurs and high-net-worth individuals from London. Against this backdrop, Spain has emerged as one of the most compelling relocation options, supported by competitive tax regimes such as the inpatriate scheme—commonly referred to as the Beckham Law—and regional incentives available to investors in the Community of Madrid.
While Dubai remains the leading destination for many of these moves, Spain has firmly established itself as a first-tier European alternative. The Spanish inpatriate regime plays a central role in these decisions. Following its enhancement in 2024, it allows qualifying individuals to be taxed at a flat 24% rate up to specific income thresholds, to exclude foreign-located assets from wealth taxation for an extended period and to benefit from targeted incentives for variable remuneration. These include favourable treatment of carried interest for investment professionals and exemptions for equity-based compensation granted to entrepreneurs. Together, these measures have significantly increased Spain’s appeal compared to other European jurisdictions.
At the same time, certain profiles with a stronger investment focus are choosing to relocate to Madrid under the regional incentives commonly known as the “Mbappé Law”. This regime, which cannot be combined with the inpatriate scheme, enables individuals who establish tax residence in the Community of Madrid and make substantial investments in Spanish companies to claim meaningful deductions against their personal income tax liability.
Over the past decade, more than 37,000 taxpayers have opted into Spain’s inpatriate regime. In recent years, the volume of applications has accelerated markedly, with a growing proportion of applicants arriving from the United Kingdom. In parallel, an increasing number of British nationals have decided to move to Spain on a permanent basis without relying on any special tax regime.
In practice, two main client profiles are emerging. The first consists of individuals approaching or entering retirement, whose primary concerns relate to the taxation of pensions and the structuring of personal wealth. The second includes senior executives and investors with expectations of receiving carried interest or other forms of variable remuneration, who see the Spanish tax framework as a highly efficient alternative following recent legislative changes in the UK.
By LEXUNION ESPAÑA, Barcelona (Spain)
