Tax withholding without NIE

I do not reside in the EU and I do not have a Spanish NIE. That said, I have been considering investing in Spain, via funding to local businesses (real estate developers). I understand that by Spanish law, interest on loans given to local businesses, is taxable at the source and requires the business to withhold the taxes, before forwarding the interest to the investor. My question is: how can this be done, if I do not have a NIE? Will my Passport suffice or am I blocked from performing such an investment, without a NIE?

You would need to set up an offshore company somewhere like the Gambia, Africa.

Thank you, @Kavanagh. Would you mind elaborating a bit, as I am not sure how this would work and what is the difference, in this regard, from a private person, living in a non-EU country and an offshore company?

If you are not an EU resident and do not have a Spanish NIE, then it is likely that you will be unable to invest in Spanish businesses directly. Many Spanish companies require an NIE to open a bank account and process any payments. Without an NIE, you would be unable to receive any interest payments, as the business would not be legally able to withhold the taxes.

An offshore company is defined as a company that is incorporated in a jurisdiction that is other than where the beneficial owner resides. In other words, an offshore company is simply a company that is incorporated in a country overseas, in a foreign jurisdiction.

An offshore company definition, however, is not that simple and will have varying definitions depending upon the circumstances. The term "offshore" is what often appears confusing to most people and is used in contrast to traditional "onshore" companies.

While an "onshore company" refers to a domestic company that exists and functions within the borders of a country, an offshore company in comparison is an entity that conducts all of its transactions outside the borders where it is incorporated. Because it is owned and exists as a non-resident entity, it is not liable to local taxation, as all of its financial transactions are made outside the boundaries of the jurisdiction where it is located.