The Mbappé Law: A New Tax Incentive for International Investors in Madrid
- Julio C. Sánchez
- Jul 30
- 3 min read
Madrid is positioning itself as a leading destination for international investors, and a new regional tax deduction—popularly known as the “Mbappé Law”—has reinforced that vision. This legal update offers significant benefits for new tax residents in Madrid. In this article, we explain what it means, who qualifies, and how Business Expats can help you optimize your relocation.
What Is the Mbappé Law?
Law 4/2024, published in the Official Gazette of the Community of Madrid on 28 November 2024, introduces a new personal income tax (IRPF) deduction aimed at attracting foreign capital. Known as the ‘Mbappé Law’, it offers a 20% tax deduction on qualifying investments made by individuals who relocate their tax residence to Madrid.
Unlike deductions from the taxable base, this incentive applies directly to the regional portion of IRPF and reduces the tax payable rather than taxable income. If the deduction exceeds your regional tax due, the excess can be carried forward for up to five years.
Who Qualifies for the Mbappé Deduction?
The deduction is available to individuals who:
Move their tax residence to Madrid
Have not been Spanish tax residents in the five previous years
Make qualifying investments in fixed-income securities, shares, or equity in non-tax haven companies
The investor must not hold more than 40% ownership, whether directly or jointly with family members.
What Qualifies as an Eligible Investment?
To qualify for the deduction, investments must meet the following conditions:
Made in the year of tax relocation or the following year
For fixed-income assets, purchases can be made in the year before becoming resident
Assets must be held for at least six years
Early disposal is permitted only if the proceeds are reinvested within one month
Investments in tax havens or companies where the investor has significant control do not qualify. Additionally, this deduction is mutually exclusive with other Madrid regional deductions and with Spain’s Beckham Law regime.
Mbappé Law vs. Beckham Law: Key Differences
While both the Mbappé and Beckham regimes aim to attract foreign residents, they serve different profiles:
The Beckham Law is ideal for salaried professionals relocating to Spain for work, allowing them to be taxed only on Spanish-source income at a flat rate.
The Mbappé Law targets individuals who do not plan to work in Spain, but wish to invest and reside, such as retirees, family office members, or athletes post-career.
Only one of the two can be applied at a time.
Why Madrid?
Madrid continues to attract investors with its competitive tax policies:
100% exemption on Wealth Tax
Up to 99% relief on inheritance and gift tax for close relatives
A growing network of international professionals, institutions, and private capital
Compared to jurisdictions like Portugal, Italy, or southern France, Madrid now offers a uniquely efficient blend of tax advantages and European access.
How Business Expats Can Help
At Business Expats, we specialize in international tax planning and relocation services for investors, professionals, and globally mobile families. Our team evaluates your situation and provides:
Eligibility assessments for both Mbappé and Beckham regimes
Strategic entry planning to ensure tax timing aligns with your goals
Full legal and tax compliance support
Company formation and residency structuring when needed
Whether you're a high-net-worth investor, part of a family office, or considering a European base for your capital, we can help you make a legally secure, tax-efficient, and confident move to Madrid.
Ready to Explore Your Options in Spain?
If you're thinking about relocating to Madrid or investing in Spain, our legal and tax professionals are here to guide your next steps.
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