A founder sale is almost never a clean transfer of shares in exchange for cash. To protect the value it is buying, the acquirer usually asks the founder for two extra things: a promise not to compete or poach staff and customers for a period, and a promise to stay involved as an employee, director or consultant during a transition. Both promises are paid for, directly or indirectly, and both can carry a tax treatment that is different from the capital gain on the shares.
This page is the companion to our guides on earn-outs and deferred consideration, warranty claims and price adjustments, and selling before or after moving to Spain. Those pages deal with sale consideration and money that flows back to the buyer. This one deals with the payments a founder receives for promising something — not to compete, and to keep working — and why the Beckham Regime treats them on their own terms.
On this page
Why buyers split the deal into three parts Sale price, covenant, and service pay How non-compete payments are viewed Consulting, employment and transition pay Allocation and the relabelling risk Where the payments sit on the Beckham timeline US founders and state tax Evidence checklist Frequently asked questions
"Selling the company is one bargain. Promising not to compete is another. Agreeing to keep working is a third. Under Beckham, those three deserve three separate answers, not one."
— Jacob Salama · International Tax lawyer, Ilustre Colegio de Abogados de Málaga (nº 11294)
Why buyers split the deal into three parts
An acquirer paying real money for a business wants to make sure the person who built it cannot walk across the street and rebuild the same thing, and cannot take the team and customers with them. It also usually wants the founder available for a handover, whether that is a few months of transition or a multi-year executive role. So the deal documents are often written as three linked but separate bargains: the purchase of the shares, a set of restrictive covenants, and a services agreement. Each has its own consideration, even when the headline is a single number.
For a founder relocating to Spain under the Beckham Regime, that split is not just legal housekeeping. During the regime, the person is a Spanish taxpayer taxed with non-resident-style rules for many items. Foreign-source capital gains, Spanish-source income and work performed from Spain are analysed differently. When a deal is one lump sum, the Spanish analysis is harder. When it is properly divided into sale consideration, covenant payment and service pay, each piece can be placed where it belongs.
Sale price, covenant, and service pay
It helps to keep three buckets clearly apart. The first is the sale price for the shares or assets: this is the capital disposal, and for a foreign company sold by a founder it usually leads into the capital-gain and source analysis covered in our other Beckham exit pages. The second is the payment attached to restrictive covenants — a non-compete, a non-solicit of employees, a non-solicit of customers, or confidentiality undertakings that go beyond ordinary law. The third is remuneration for work: salary, director's fees, consulting fees, transition-services pay or an earn-in tied to staying with the business.
These buckets are taxed on different logic. Sale consideration is capital. Service pay is work or professional income. A covenant payment sits in between and depends heavily on how it is documented and what it really compensates. Blending them into one figure invites both a weaker Spanish position and a harder conversation with the buyer's and seller's advisers later.
| Deal component | Usual character | Why it matters under Beckham |
|---|---|---|
| Share or asset sale price | Capital disposal | Source of the gain (foreign vs Spanish) drives the analysis |
| Non-compete covenant | Payment for a restrictive promise | Not automatically part of the share price; needs its own review |
| Non-solicit of staff or clients | Payment for a restrictive promise | Character can differ from a pure non-compete |
| Consulting or transition pay | Professional or work income | Work done from Spain can fall into the general Beckham analysis |
| Post-sale employment or director role | Employment income | Salary and fees are taxed as work, not as sale proceeds |
| Earn-in tied to staying | Often service-linked | May be recharacterised away from capital toward income |
How non-compete payments are viewed
A non-compete payment is one of the most misunderstood parts of a founder exit. Founders often assume it is simply part of the price they got for the business, so it should be taxed like the rest of the sale. That assumption is not safe. A payment made specifically in exchange for a promise not to compete can be analysed as a distinct payment for a restrictive covenant, separate from the capital consideration for the shares. Whether it follows the capital analysis or a different one depends on the facts, the drafting and how the payment is structured.
Under the Beckham Regime, the questions that matter are the usual ones: what is being paid for, where is the person tax resident when it is paid, and what is the source of the payment. A covenant that restrains the founder's future economic activity — including activity that would otherwise be carried on from Spain — needs to be reviewed on its own, not folded silently into the share-sale number. The size of the covenant payment relative to the total deal, the length and scope of the restriction, and whether the covenant is genuinely commercial all feed into the analysis.
Consulting, employment and transition pay
Post-sale service pay is more straightforward in principle and easy to get wrong in practice. If the buyer keeps the founder on as an employee, a director, or an independent consultant, the payments for that role are remuneration for work, not sale proceeds. Where the founder performs that work while tax resident in Spain, the income generally falls into the Beckham analysis for employment or professional activity income, which is taxed on its own basis and is not the same as a foreign-source capital gain.
This is where a lot of founder value quietly changes character. A "consulting agreement" worth a large annual fee for three years after closing is work income earned in Spain if the founder does the work from Spain, however much it feels like part of the deal. Transition-services arrangements, advisory retainers and executive roles all sit on the work side of the line. The practical consequence is that a founder should know, before signing, how much of the total package is really pay for future work and should expect that portion to be treated as income rather than capital.
Allocation and the relabelling risk
Because the three buckets are taxed differently, there is an obvious temptation to move value between them. A buyer may prefer to load value into a non-compete or consulting agreement for its own reasons; a seller may prefer to keep everything inside the capital sale price. Both sides need to remember that labels do not control the tax outcome. If a payment described as sale price is really pay for future services, or a consulting fee is really disguised deferred consideration for the shares, the substance can be examined behind the label in both Spain and the United States.
The safest approach is an allocation that reflects genuine commercial reality and is consistent across all the documents. The share purchase agreement, the covenant deed and the services agreement should tell the same story. If a founder signs a consulting agreement for a nominal fee but the real economics are packed into an inflated non-compete payment, or vice versa, the allocation becomes fragile. A clean, defensible split — supported by the actual role, restriction and value delivered — is far easier to report and defend than a lump sum with a convenient label.
Where the payments sit on the Beckham timeline
Timing matters as much here as with earn-outs and price adjustments. Mark the deal events on one line — signing, closing, the start and end of the non-compete period, the term of the consulting or employment agreement, and any instalments of covenant or service pay. On the other line, mark Spanish arrival, the first Spanish tax-residence year, the Modelo 149 election, the final Beckham year and the first ordinary-resident year. Covenant and service payments are frequently spread over several years, so a single deal can drop income into more than one of those periods.
The common error is to treat everything as belonging to the closing year. A consulting fee paid in year three is income of year three, earned where the work was done. A non-compete instalment paid after the Beckham window closes lands in ordinary Spanish residence, where worldwide-income and reporting rules are broader. A founder who understands, in advance, which payments will fall inside and outside the Beckham window is in a far stronger position than one who discovers it after the fact.
US founders and state tax
US founders need a parallel review. US citizens and green-card holders remain subject to US worldwide taxation, and US rules treat non-compete payments, consulting fees and allocated purchase price on their own terms, which may not match the Spanish characterisation. A payment that is capital for one system may be ordinary income for the other, and an allocation that helps in Spain may hurt in the United States or the reverse. The two files should be coordinated before the documents are signed, not reconciled afterwards.
State tax deserves particular attention with service income. Consulting and employment pay is exactly the kind of income that a former home state may look to tax, especially where the founder did not cleanly sever residence before moving and where the services connect back to work once done in that state. A non-compete tied to a business built in a high-tax state can raise similar questions. None of this is a reason to avoid Spain; it is a reason to plan the covenant and services structure with both jurisdictions in view.
Evidence checklist
For a deal with covenants and service pay, keep the share purchase or merger agreement, the restrictive-covenant deed or clauses, the consulting or employment agreement, the allocation schedule showing how the total was divided, board or director appointment documents, invoices or payslips for the service pay, and evidence of where the work was actually performed. If covenant or consulting payments are made in instalments, record the dates. If any amount was renegotiated, keep the correspondence explaining why.
Build this evidence before relocation and before signing, not after. Once the founder is in Spain, the adviser should be able to answer five questions quickly: what was sold, what promise was paid for, what work is being paid for, when does each payment fall, and where is the founder performing the work. Clear answers to those five questions make both the Spanish and the US positions much easier to explain.
Frequently asked questions
Is my non-compete payment just part of the sale price?
Not automatically. A payment for a restrictive covenant can be analysed separately from the capital consideration for the shares, depending on the drafting and the facts.
How is a post-sale consulting fee taxed in Spain?
Generally as work or professional income. If the work is performed while you are tax resident in Spain, it falls into the Beckham analysis for employment or activity income, not the capital-gain analysis.
Can we just call service pay "sale price" to save tax?
Labels do not decide the result. If the substance is pay for future work, it can be treated as income despite the label. The allocation should reflect commercial reality.
Does signing a non-compete affect my Beckham status?
The covenant itself does not grant or remove Beckham status, but the surrounding role and facts can be relevant. Review the whole package before signing.
Do these payments cross the Beckham six-year window?
They often do. Covenant and consulting payments spread over several years can fall partly inside and partly outside the window, which changes how the later amounts are taxed.
General information, not legal or tax advice. Sources reviewed July 2026: Article 93 of Law 35/2006 on the special regime for displaced workers, professionals, entrepreneurs and investors; Law 28/2022; AEAT guidance on Modelo 149 and Modelo 151; and Spanish tax principles on source, capital gains, savings income, employment and professional income under the Beckham Regime. Non-compete and consulting arrangements are contract-specific and should be reviewed before signing and relocation.