The Spanish Government introduced the Residency Visa Law 14/2013 on 27th September 2013 to support entrepreneurs and internationalization. It offers the opportunity for non-EU citizens to obtain a Residency Permit (Golden Visa) by investing in Real Estate in Spain for a minimum value of €500,000. A residence permit is issued for 1 year and can be renewed every 2 years thereafter, provided that the property asset(s) is maintained by the applicant.
The Spanish residency permit is valid for visa-free travel throughout the EU and Schengen zone and allows the holder the same options as a Spanish national for living and working in Spain. However, the amount of visa-free travel will still be dependent on the card-holder’s original passport.
Acquiring Permanent Residency and Citizenship:
It is possible to apply for permanent residency in Spain after living in the country for 5 years
Citizenship can be applied for only after living full time in Spain for 10 years.
Although the temporary residency permit (the golden visa) can be easily renewed without living in the country, the route to both permanent residency and citizenship requires the investor and their family to reside in Spain almost full-time. Due to this many investors prefer the option of Portugal where lengthy minimum stay is not required.
Spain, officially known as the Kingdom of Spain is a key country member of the European Union (EU). The mainland of Spain is surrounded by the Mediterranean Sea and strategically located at the crossroads of Europe and the Mediterranean on the Iberian Peninsula. Spain’s economy is the ninth largest in the world and it ranks amongst one of the best in the EU. It is responsible for creating more than half of the new employment opportunities created in the EU countries. With regards to investing and starting a business in Spain, foreign investors can target to reach to 44.7 million resident customers; foreign investors can take advantage of this huge and attractive market base. Investors can also benefit from the Spanish government’s aggressive foreign investment policies. It provides foreign investors free access to the modern infrastructure facilities for effective business activities across the EU. Additionally, it has a strong economic infrastructure, offering its residents a high standard of living with reasonable living costs, appropriate health care and a globally recognized education system. The country has an area of about 504,645 sq. km and also includes the Balearic Islands, the Canary Islands and a number of uninhabited islands on the Mediterranean side of the Strait of Gibraltar. It is a member of important international organizations such as United Nations (UN), the Council of Europe (CoE), and OEI, NATO, OECD, WTO and many others. The capital is Madrid and other major cities for tourism include Barcelona, Mallorca, Seville, Valencia and the southern region of Andalusia. The official language is Spanish, but large portions of the population speak fluent English. State schooling follows the Spanish curriculum but there are also many English speaking international schools.
To qualify for the Spanish residency scheme, the applicant must invest a minimum amount in one of three different areas:
The investment can be made by either an individual or a company provided that the company is not located in a country considered to be a tax haven and the individual has control of the company’s shares.
In exchange for these investments the investor can obtain a residency visa to live in Spain and travel freely throughout the EU Schengen area.
The minimum stay requirement is just 1 day per year.
Spain is a world-class destination for investment and investors can be rest assured to earn valuable returns on their capital. After the Global financial crisis in 2008 real estate prices in Spain dropped considerably and made investing in property a very attractive and affordable proposition. The market has recovered well in many regions and prices remain attractive.
After 5 years of residency, applicants can apply for Permanent Residency provided they have lived in the country for more than six months each year.
However, Citizenship can only be granted after 10 years of living in Spain and passing a Spanish language test. (applicants will need to have been living in Spain full-time throughout the 5-year period leading up to citizenship).
Once applicants have acquired citizenship then they are free to dispose of their investment. In order to renew permanent residency status, applicants must prove that they have the minimum amount invested in real estate upon renewal (every 5 years).
Qualifying family members include spouse and all children under 18. Children aged 18 and over and parents can qualify if dependent or in full-time education and must be unmarried.
Investors will only be taxed on their worldwide income if they are resident in Spain for over 183 days in any tax year. For those non-resident individuals tax is charged at 24.75% only on income derived in the country, such as rental income. This can be reduced with expenses. Capital gains tax (CGT) applies to any profit on the sale of a property. CGT starts at 24% rising to 27% for gains over €50,000. There are allowances and deductions that can be made.
Annual property taxes are payable to the local authority, typically €200 – €400 per year for an apartment and slightly more for a villa.
Applicants deciding to live full time in Spain will require:
Our consultants and immigration lawyers will manage the entire application process with document preparation and validation and all government formalities. We partner with the best real estate developers and agents and will arrange for the client to view the properties and get the best possible investment opportunities. Please contact us and our team will be delighted to assist you.