Investing from Spain

The Bogleheads® investment philosophy can be used by investors resident in Spain, as long as they are aware of the specifics that come with their domicile, some of which are discussed in this article.

Please ask portfolio questions in the Bogleheads forum or consult a professional advisor. The general guidance given in EU investing is applicable.

This page is not intended for US persons, as their situation is very specific. See Taxation as a US person living abroad if you are a US person in Spain.

Investing with Vanguard in Spain
Starting in 2015 Vanguard Ireland opened its doors to investors in Spain. Compared with US offerings there are a smaller selection of exchange-traded funds (ETFs) and some index funds, all of which require a minimum of a 100,000€ investment:

"If you are a personal investor enquiring on your own behalf, please be aware that we do not pro-actively market, distribute or service direct investors. However if you are resident in one of the countries listed below you are able to invest in our Irish mutual fund range, on an execution only basis, subject to a minimum investment per fund of €100,000 or equivalent."

See the Vanguard website for a list of key investor information documents.

Brokers
A number of low-cost comercializadores de fondos make index funds available to retail investors in Spain — bypassing the usual fund minimums by creating so called "omnibus" accounts with portions of the holdings parcelled out to individual investors — including:


 * BNP Paribas Personal Investors
 * Renta 4
 * Self Bank

Accounts with other brokers based outside Spain, such as Interactive Brokers (UK), can be used to purchase ETFs, but they do not automatically report earnings to the Spanish tax authorities, requiring investors to file Form 720 themselves.

"Clean"
Starting in July 2018, BNP Paribas began charging 5 basis points each quarter, plus tax (the IVA tax of 21%) — effectively totalling over 6 basis points charged quarterly in additional fees — to customers with a majority of their holdings in so called "Clean" funds (such as the Ireland-domiciled Vanguard funds). This makes the effective expense ratios of these funds less competitive, leading some investors to keep them only as a minority portion of their portfolio.

Dividends
Tax is not due on dividends that are reinvested (recapitalizados), a useful property for investors wishing to minimize their taxes. When reinvesting, tax is payable only on the capital gain (plusvalía) at the eventual time of liquidation. As such, investor demand has led to the availability of many funds and ETFs in "acumulación" format — these reinvest the dividends internally — in contrast with so-called income or distributing ("distribución") funds and ETFs.

Income tax rates vary by region (comunidad autónoma). The tax brackets and rates in 2017 for Madrid, for example, are:

Rebalancing
Index funds may be exchanged without triggering a taxable event, thus removing the tax consequences of rebalancing. It is possible that legislation may bring the same treatment to ETFs in the future, but at the time of writing (August 2018) this is still not the case.

A

 * Acciones: stocks.

B

 * Bonos: bonds.

C

 * Cartera: portfolio.
 * Clean: Anglicism describing funds that do not contain hidden distribution fees paid to comercializadores in their expense ratios; see also, No Clean.
 * Comercializador: Brokerage that provides commercial (ie. non-institutional) access to investment funds.
 * Cubierto de riesgo divisa: currency-hedged.

D

 * Dividendos: dividends.
 * Divisa: denomination (currency).

F

 * Fondos de inversión: mutual funds.
 * Fondos indexados: index funds.

G

 * Gestíon pasiva: passive investing.

H

 * Horquilla de compra-venta: bid-ask spread.

I

 * Índice: index.

N

 * No Clean: Anglicism describing funds that do contain hidden distribution fees paid to comercializadores in their expense ratios; see also, Clean.

P

 * Plusvalía: capital gains.

R

 * Recapitalizar: reinvest.
 * Renta fija: bonds (literally "fixed income").
 * Renta variable: equities (literally "variable income").

S

 * SOCIMI (Sociedades Anónimas Cotizadas de Inversión en el Mercado Inmobiliario): A Spanish Real Estate Investment Trust (REIT).