The Mbappé Law in Spain: A Strategic Tax Advantage for Ultra-High Net Worth Investors in Madrid

Maggie Panet
July 22, 2025

Introduction: Unlocking Madrid's Investment Potential with the Mbappé Law

Madrid continues to solidify its position as a vibrant hub for international talent and investment. In this dynamic landscape, a new regional tax incentive, popularly dubbed the Mbappé Law, formally Law 4/2024, published in the Official Gazette of the Community of Madrid on November 28, 2024, and effective January 1, 2024, has garnered significant attention, particularly among Ultra-High Net Worth (UHNW) individuals and elite professionals.

While its namesake, the celebrated footballer Kylian Mbappé, has brought it into the spotlight, the law’s implications extend far beyond the sports world, offering substantial tax benefits for expats, entrepreneurs, and investors considering a move to the Spanish capital.

This comprehensive guide will delve into the intricacies of the Mbappé Law, explaining its mechanisms, eligibility criteria, and the profound advantages it presents.

We will clarify who stands to benefit most, particularly UHNW individuals from the UK, US, Canada, Switzerland, Latin America, and the wider EU, looking to strategically optimise their tax obligations when establishing a new life and making significant investments in Spain.

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What is the Mbappé Law?

Enacted as Law 4/2024, published on November 28, 2024, and effective January 1, 2024, the Mbappé Law introduces a 20% deduction on the regional portion of Personal Income Tax (IRPF).

This deduction applies to specific investments made by individuals who establish tax residency in the Community of Madrid. The law’s primary objective is to stimulate the local economy by attracting inward investment and drawing new high-value tax residents to the region.

Unlike Spain’s national tax schemes, this is an exclusive Madrid-only incentive, emphasising the regional government’s commitment to fostering a competitive and attractive environment for global capital and talent.

Who is Eligible for the Mbappé Law in Spain?

The Mbappé Law is designed to attract new tax residents and investors to Madrid.

To qualify for this significant tax deduction, individuals must meet the following key criteria:

Establish Tax Residency in Madrid: You must become an official tax resident in the Community of Madrid, meaning you spend more than 183 days per year in Spain and declare your worldwide income in the country.
New to Spanish Tax Residency: You must not have been a Spanish tax resident within the five years preceding your application.
Qualifying Investment: The deduction is tied to investments in eligible companies headquartered or operating in Madrid, provided they are not involved in real estate development. The law specifically outlines:
- Investments can include equity stakes, share purchases, bonds, debentures, or treasury bills.
- Your direct or indirect ownership in the invested company cannot exceed 40% of the capital or voting rights. This percentage considers holdings by a spouse or relatives up to the second degree of kinship.
- The investment must be held for a minimum of six years.
- Assets based in tax havens or linked to property are expressly excluded.
- Crucially, the investment does not have to be in Madrid-based companies. It can be in entities located anywhere in Spain or even outside of Spain, as long as they are not in a jurisdiction considered a tax haven by Spanish law.
- The investor may not perform executive or management functions or maintain an employment relationship with the invested company.

This inclusive approach means the law is open to professionals and investors from various countries, including the UK, USA, Canada, Switzerland, Latin America, and the broader EU.

How Much Could You Save Under the Mbappé Law in Spain?

The financial benefits for eligible UHNW individuals can be substantial. Here’s a breakdown:

20% Deduction: You can deduct 20% of your eligible investment from your regional tax liability.
Carry Forward Provision: If your deduction exceeds your regional tax bill in a given year, the unused portion can be rolled forward for up to five years, maximizing the long-term benefit.

Illustrative Example: Consider an individual who invests €2 million into a qualifying Madrid business. This could translate to a direct €400,000 deduction against their Madrid regional income tax. For high earners, this provides meaningful tax relief while simultaneously contributing to the local economy.

Mbappé Law vs. Beckham Law: Understanding the Key Differences

Spain’s tax landscape for expatriates can seem complex, with the Beckham Law (formally the Special Tax Regime for Inbound Workers) also a popular option.

While both are nicknamed after famous footballers and aim to attract foreign talent, they operate under distinct principles and cater to different profiles.

Think of it like this: The Beckham Law is akin to a strategic midfielder, focusing on employment income and offering a national flat tax rate. The Mbappé Law is more like a visionary investor, focusing on capital investments and providing a regional deduction.

Feature	“Mbappé Law” (Law 4/2024, Madrid)	“Beckham Law” (Article 93 IRPF Law, National)
Primary Beneficiaries	Investors relocating to Madrid	Employees (high-level executives) relocated to any part of Spain
Type of Benefit	20% regional income tax deduction on eligible investments	Flat 24% tax rate on Spanish-sourced employment income (up to €600k)
Taxation Scope	Taxed as a full Spanish resident (worldwide income subject to Spanish tax)	Treated as a non-resident for tax purposes (only Spanish-sourced income taxed, with exceptions for employment income)
Applicability	Only for tax residents in the Community of Madrid	Applicable throughout the national territory of Spain
Investment Focus	Non-real estate investments in eligible companies	Employment income from a Spanish employer
Minimum Residency	Must maintain tax residency in Madrid for a minimum of 6 years	No minimum stay, but applicable for max. 6 years (year of arrival + 5)
Newcomer Status	Not been a Spanish tax resident in the previous 5 years	Not been a Spanish tax resident in the previous 5 years
Compatibility	Cannot be combined with the Beckham Law	Incompatible with the Mbappé Law

Choosing between these two regimes requires a careful analysis of your individual circumstances, income streams, and investment strategy.

It is crucial to seek expert legal and tax advice to determine which path offers the optimal tax efficiency for your specific profile.

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Strategic Applications of the Mbappé Law for the Ultra-High Net Worth Individuals

The Mbappé Law is particularly attractive for UHNW individuals and families seeking a tax-optimised relocation and investment strategy in Europe.

Consider these real-world scenarios:

US Tech Entrepreneur: A California-based tech founder moves to Madrid, invests €5 million in a cutting-edge Madrid AI startup, and leverages the 20% deduction to significantly reduce their regional income tax liability while expanding their European footprint.
UK Private Equity Partner: Post-Brexit, a British private equity partner relocates their tax residency to Madrid, contributes €10 million to a non-real estate fintech fund, and claims a substantial €2 million deduction through the regional scheme, effectively lowering their tax burden.
International Investor from Dubai: An international investor, having spent several years in the UAE, establishes Madrid residency and diversifies their portfolio by investing in several local non-real estate startups. The Mbappé Law provides a mechanism to offset a significant portion of their Spanish taxes, while simultaneously securing EU residency benefits.
Family Office Seeking European Base: A family office looks to establish a European presence. Madrid’s Mbappé Law makes it an attractive proposition for a managing partner or key investor to relocate, benefiting from the tax deduction on new investments and accessing Spain’s burgeoning investment opportunities.

Important Considerations and Alternatives

While highly advantageous, the Mbappé Law comes with specific requirements and exclusions:

Incompatibility with Beckham Law: As highlighted, you cannot combine the Mbappé Law with the Beckham Law. A careful assessment is needed to choose the most beneficial regime.
Regional Focus: The deduction applies solely to the Madrid regional portion of the IRPF, meaning national tax rates and other regional regimes remain unaffected
No Real Estate Investments: The law explicitly excludes investments in real estate development companies or assets linked to property.
Tax Havens: Investments in entities located in jurisdictions considered tax havens by Spain are not eligible.
Broader Madrid Tax Advantages: Beyond the Mbappé Law, Madrid offers a highly favourable tax environment. Notably, the Community of Madrid applies a 100% allowance for Wealth Tax, effectively eliminating this tax for local taxpayers. Furthermore, significant reliefs are available for Inheritance and Gift Tax, with spouses, descendants, and ascendants benefiting from a 99% relief, and other relatives such as siblings, nephews, and nieces receiving a 25% relief. These additional benefits further underscore Madrid’s attractiveness as a tax-efficient destination for UHNW individuals.
Other Regional Initiatives: While the Mbappé Law is unique to Madrid, other Spanish regions, such as Cantabria, are exploring their own tax incentives to attract investment and new residents. However, Madrid remains at the forefront with this established and compelling offering.

Alternative for Real Estate Investment: The Golden Visa

For UHNW individuals primarily interested in real estate investments in Spain, the Mbappé Law is not applicable.

However, the Spanish Golden Visa offers a compelling alternative. With a minimum net investment of €500,000 in Spanish properties (residential, commercial, or land), individuals can obtain legal residency rights in Spain, including the right to work and reside.

Furthermore, depending on their profile and relocation purpose, Golden Visa holders may also be eligible for the national Beckham Law if they are employed in Spain.

Frequently Asked Questions (FAQ) about the Mbappé Law

Q1: Is the Mbappé Law truly exclusive to Madrid, or does it apply nationwide?

The Mbappé Law is a regional tax incentive, exclusively applicable to individuals who establish and maintain their tax residency in the Community of Madrid.

It does not apply to other regions of Spain.

Q2: Can I combine the Mbappé Law with the Beckham Law?

No, the Mbappé Law and the Beckham Law are mutually exclusive.

You must choose the regime that best suits your financial situation and relocation purpose.

Our experts can help you determine which one is more advantageous for you.

Q3: What types of investments qualify for the Mbappé Law deduction?

Eligible investments include equity stakes or share purchases in Madrid-based businesses, bonds, debentures, and treasury bills.

Crucially, the investments cannot be in real estate development companies, and the entity cannot be located in a tax haven.

You also cannot hold more than 40% of the invested company.

Q4: Do I need to invest in a company specifically headquartered in Madrid?

While the benefit is for Madrid tax residents, the law does not stipulate that the investment must be in a Madrid-based company.

Investments can be in eligible entities located anywhere in Spain, or even outside of Spain, provided they are not in a tax haven and meet all other criteria.

Q5: How long do I need to hold the investment and maintain residency in Madrid to benefit?

You must hold the qualifying investment for a minimum of six years.

Additionally, you are required to maintain your tax residency in the Community of Madrid for at least six years to fully benefit from the deduction.

Q6: What happens if I move out of Madrid before the six-year period is up?

The deduction is contingent on maintaining tax residency in Madrid for the stipulated period.

Failing to do so may result in the loss of the tax benefit and potential clawbacks.

It’s crucial to consult with a legal and tax advisor if your residency plans change.

Q7: Is there an income threshold to qualify for the Mbappé Law?

There isn’t a specific minimum income threshold mentioned for the Mbappé Law, but given it’s a deduction on income tax and requires substantial investment, it is primarily designed to benefit high-earning individuals and investors.

PCC Legal: Your Expert Guide to Spanish Tax Optimisation and Spanish Legal Needs

Navigating the complexities of international tax law and residency requirements in Spain demands specialised expertise.

At PCC Legal, we are dedicated to providing comprehensive cross-border legal and tax advisory services, specifically tailored to UHNW individuals and international clients.

Our experienced legal team assists with every step of the process, ensuring a strategic and legally sound approach:

Eligibility Assessment: We will meticulously evaluate your personal and financial profile to determine if the Mbappé Law aligns with your objectives.
Investment Structuring: We guide you in correctly structuring your qualifying investments to maximise the tax benefits.
Residency & Compliance: We will handle all aspects of residency registration and ensure full compliance with Spanish tax regulations.
Integrated Tax Planning: We will coordinate with your international tax advisors to optimise your overall Spanish and global tax obligations.

Ready to Unlock Your Tax Advantages in Madrid?

Whether you are contemplating a relocation from London, New York, Geneva, or Dubai, the Mbappé Law presents a unique opportunity to invest in Madrid’s vibrant economy while realizing significant tax advantages.

Don’t leave your tax optimisation to chance. Let our seasoned professionals at PCC Legal provide the strategic guidance you need to leverage the Mbappé Law effectively.

Contact PCC Legal today for a personalised consultation.

Conclusion: A Gateway to Growth and Tax Efficiency in Spain

The Mbappé Law in Spain represents a forward-thinking initiative by the Community of Madrid to bolster its economy and attract global investment. For Ultra-High Net Worth individuals seeking a strategic European base, this regional tax incentive offers a compelling opportunity to achieve significant tax efficiencies while participating in Spain’s dynamic market.

Understanding the nuances of this law, especially in comparison to other regimes like the Beckham Law, is paramount for making informed decisions.

At PCC Legal, our deep expertise in Spanish legal and tax matters, combined with our focus on international UHNW clients, positions us as your ideal partner in navigating this exciting landscape.

Embrace the potential of the Mbappé Law in Spain to optimise your financial future.

Contact PCC Legal today to discuss how we can tailor a solution that aligns with your wealth management and residency goals.

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