MONTCLARE
CAPITAL PARTNERS
The Balearic investment reserve (RIB) allows a company with a real business in Mallorca, Menorca, Ibiza or Formentera to reduce the taxable base of its Spanish corporate income tax by the profit it retains and reinvests in the islands, up to 90% of the undistributed profit generated by its Balearic establishments.
It is not a low-tax zone and it is not the ZEC. It is a reinvestment incentive with a fixed ceiling, and it rewards whoever operates a business, not whoever merely owns property. We say so at the top of the page because most disappointments with this regime begin with someone who was told otherwise.
Montclare runs Balearic mandates from Amsterdam together with its tax partner in Palma: the structure above the company and the reserve inside it are designed at the same time, by the same people, from the first conversation.
Renovation, extension and upgrading of tourist establishments, and the equipment that goes into them.
Technology, professional services, trading, nautical and industrial companies that earn their profit with people and assets located in the Balearics.
Land and buildings for protected housing, including rental by the developer itself for at least five uninterrupted years.
Social and healthcare activities, care homes and rehabilitation centres.
The regime applies to Spanish corporate taxpayers and to non-residents operating in the islands through a permanent establishment.
A company whose only function is to own a villa, or whose profit comes from shareholdings in other entities or from lending its own capital. That profit is excluded from the calculation.
The regime must respect the EU de minimis limits. The aid is measured as the tax rate multiplied by the reduction applied and, added to any other de minimis aid granted in Spain to the same undertaking (related companies count as one), may not exceed EUR 300,000 over three years. For a large investor this makes the RIB the complement to a good structure, never its reason. We calculate the available headroom before allocating anything.
The regime applies to tax periods beginning between 1 January 2023 and 31 December 2028. Reserves allocated within that window may be materialised afterwards. Any extension depends on new legislation.
Source: seventieth additional provision of Law 31/2022; Royal Decree 710/2024 (arts. 2, 29, 30 and 32); Regulation (EU) 2023/2831. Individuals carrying on an economic activity in the islands have an equivalent deduction, and industrial, agricultural, livestock and fishing companies have their own 10% relief on the tax due, rising to 25% if headcount increases. We confirm how each rule applies to your case before any commitment is made.
The RIB acts in the Spanish operating company. It does not change where the group should be owned, how it is financed or how profit leaves Spain. Those questions are settled first; the reserve is applied afterwards.
Eight questions that establish, before you spend anything, whether the reserve is within reach and how much headroom the ceiling leaves. It rewards reinvesting in a business, not owning a property.
The reserve belongs to an establishment carrying on an economic activity in the islands. Owning property is not an activity. No: the RIB is not available. Stop here.
These are the only taxpayers that can apply the regime. No: the vehicle has to change before the reserve can be considered.
Profit from shareholdings and from lending own capital is excluded from the calculation. No: hardly any reserve can be allocated.
Only undistributed profit counts. Dividends and any other outflow of equity reduce the reserve, both in the year of the profit and in the year of the allocation resolution. No: the reserve shrinks with every distribution.
The reserve must go to eligible assets, to new jobs linked to them or to newly issued shares of Balearic companies making those investments. Investments made before the allocation can count if notified in time. No: a reserve with no investment behind it is repaid with interest.
Land qualifies for protected housing, industry, social and healthcare activity, commercial areas under rehabilitation and the rehabilitation of tourist establishments. Property for letting qualifies in a short list of cases and never if the tenant is related. No: the property does not count; other assets may.
Selling, moving or idling them earlier undoes the benefit. No: choose other assets or another timetable.
The tax saved by the reserve counts towards that ceiling, together with any other de minimis aid to related companies. No: there is no headroom for now.
A "no" to questions 1, 2 or 3: the regime is not available as things stand, though how the activity is organised may be worth a conversation. "Yes" to 1 to 3 and a "no" somewhere in 4 to 8: the reserve is available but limited, and the limit can usually be quantified in one meeting. Eight times "yes": you are a candidate, and the next step is a calculation with your own figures.
Tell us what you operate, or plan to operate, in the Balearic Islands.
REQUEST A RIB ANALYSISThis page is informational and does not constitute tax, legal or investment advice. Figures describe the regime in general terms and are subject to the legislation in force and to change. Eligibility, thresholds and limits are confirmed for each case before any commitment is made. Each engagement is subject to scope and applicable regulation.