What is the Mbappé Law? 

On 28 November 2024, the Community of Madrid published Law 4/2024, more commonly known as the “Mbappé Law,” in the Official Gazette of the Community of Madrid. The law is designed to attract foreign investors and talents through tax incentives within the regional Personal Income Tax (IRPF) section. 

The Mbappé Law provides a 20 per cent deduction for investments made in non-real estate financial instruments.  

How can foreign investors optimise the Mbappé Law to maximise its benefits? In this blog, we delve into the provisions of the law. 

Who can benefit from the Mbappé Law? 

The law is primarily for new residents who establish tax residency in Madrid, Spain. They must maintain their investments for at least six years. Specifically, they can benefit from the law by complying with the following: 

• They must not have resided in Spain for the past five years before applying 
• They must ensure that the investment entity is not located in a tax haven 
• They must limit their investment to family businesses by 40 per cent of the capital stock 
• They must avoid holding executive or management positions in the investment entity 

What investments can qualify under the Mbappé Law? 

Non-residents who become tax residents in Madrid can claim a 20 per cent tax deduction by investing in assets that represent the transfer of capital, such as bonds, debentures, etc. They can also invest in assets representing ownership interests, such as shares, stakes in non-listed companies, etc. The investments cannot involve real estate or entities located in tax havens. There is also a limit for investing in non-listed companies wherein individual ownership cannot exceed 40 per cent.

How can Bolder Group help? 

The Mbappé Law offers a significant tax advantage to foreign investors who establish tax residency in Madrid. However, navigating the complex tax landscape, selecting suitable investments and complying with residency requirements can be challenging. To maximise the benefits of this law, partnering with a professional in the jurisdiction is crucial. 

Bolder Group provides tailor-fit solutions to help you understand the law to bring you closer to your specific financial goals. Our expertise in corporate, private wealth and compliance services can help you maximise the benefits of the Mbappé Law. Contact our Bolder Spain office for more information. 

Bolder Group does not provide financial, tax or legal advice and the information contained herein is meant for general information purposes only. We strongly recommend that before acting on any of the information contained herein, readers should consult with their professional advisers. The Bolder Group accepts no liability for any errors or omissions in the information, or the consequences resulting from any action taken by a reader based on the information provided herein.

Bolder Group refers to the global network of independent subsidiaries of Bolder Group Holding BV. Bolder Group Holding BV provides no client services. Such services are provided solely by the independent companies within the Bolder Group which are each legally distinct and separate entities and have no authority (actual, apparent, implied or otherwise) to obligate or bind Bolder Group Holding BV in any manner whatsoever. The operations of the Bolder Group are conducted independently and have no affiliation with third party financial, tax or legal advisory firms or corporations.