The "Entidad de Tenencia de Valores Extranjeros" (ETVE) regime is Spain's special tax regime for holding companies. It is designed to compete with similar tax regimes offered by countries such as the Netherlands, Luxembourg, Denmark and Austria. This article examines the ETVE regime. The article first describes the special characteristics of an ETVE and focuses on the tax treatment of dividends and capital gains derived by an ETVE. The article also deals with the tax treatment of dividends and capital gains derived by the shareholders of an ETVE. The article ends with some conclusions on the ETVE regime.