Obtaining a residence permit for investors  (popularly known as the “Golden Visa”) has become, in recent years, a mechanism widely used by foreigners with a high purchasing power looking to establish themselves in Spain.

Following the example of other European countries, such as Portugal, Malta, Bulgaria or Latvia, in 2013, Spain implemented the residence visa for investors, pursuant to Law 14/2013, of 27th September to support entrepreneurs and internationalisation, with the objective of attracting foreign capital and talent and strengthening the fabric of business. This permit, which authorises its holder to reside and work in Spanish territory, may also extend to a spouse or person with whom a similar relationship is maintained, children under the age of 18 years, children over the age of 18 years, but who are financially dependent on their parents, or dependant ascendants.

In order to obtain the permit, the applicant must be a non-European community citizen (this excludes persons with dual nationality when one of the nationalities is that of a Member State of the European Union, in which case the European Community regime regulated in Royal Decree 240/2007, of 16th February is applicable) and comply with the following requirements:

  • Not being in Spain in an irregular situation;
  • Being at least 18 years old;
  • Not having any criminal record in Spain and in the countries of residence during the last five years;
  • Not appearing as rejected in the territorial area of countries with which Spain has signed an agreement to such effect.
  • Being holder of complete health insurance cover in Spain; and
  • Having sufficient financial resources for themselves and for family members. Currently the applicant must be able to demonstrate that he/she has an amount equivalent to 400% of the Spanish annual public index on income (IPREM), that is to say approximately Euro 28,000, and an additional amount of 100% of said index (around Euro 7,000) for each of the family members who will benefit from the permit.

Furthermore, the applicant, must have carried out, in a personal capacity or via a legal entity controlled by the applicant, one of the following types of investment in Spain:

(i) An investment of Euro 2,000,000 in public debt or of Euro 1,000,000 in shares or membership interests, investment funds, or bank deposits;

(ii) A business project considered to be of general interest; or

(iii) The acquisition of real estate property.

The latter option, which is chosen by the vast majority of applicants, requires the acquisition of one or various properties for an amount of Euros 500,000 (taxes not included). This amount must be disbursed at the time of the purchase and sale, free of liens and encumbrances, so it is not possible to take out a mortgage on said amount. However, it is possible, on the other hand, to grant a mortgage with regard to the part of the price which exceeds said amount. In order to demonstrate the investment, a certificate of ownership and encumbrances issued by the Land Registry where the property is registered must be provided. Should the certificate not reflect the amount of the acquisition, the applicant, must further provide the public deed of purchase and sale. If the purchase and sale transaction has not yet been formalised, but the applicant has however signed a deposit agreement (contrato de arras) in a public deed, the applicant may apply for a residence permit, facilitating said agreement and demonstrating that a bank deposit account has been opened containing the amount required for the acquisition, albeit the funds being  unavailable for any other purpose.

With regard to the duration of the residence permit, this will depend on the place where the applicant is located. If the applicant is located abroad, a residence visa must be applied for at the Spanish Consulate of their country, which would allow residence in Spanish territory for 1 year. On the other hand, if the applicant is already in Spain, the residence authorisation must be applied for at the Large Business Unit (forming part of the Spanish Immigration Department), which will be valid for 3 years, with the possibility of renewing it for successive periods of 5 years while the investment is maintained. On the aforementioned premise whereby the real estate property has not yet been acquired, but the deposit agreement has been undertaken, the visa or residence authorisation will have a validity of 6 months.

Finally, it must be pointed out that the residence permit for investors offers numerous advantages compared with other similar permits, such as a non-lucrative residence permit. Whereas a non-lucrative residence permit is valid for one year, it only authorises residence in Spain (without the possibility of working) and it obliges its holder to become a tax resident in Spain, and, therefore, to reside here for at least 183 days of the year, instead, the residence authorisation for investors has a duration of 3 years, it allows its holder to carry out an employment or professional activity and does not require the holder to establish their tax residence in Spain, thus there is no obligatory minimum period of permanence in the territory. This will allow the holder of the permit to retain their fiscal address in their country of origin or wherever a more favourable tax regime is available.

In view of the above, we may conclude that the Golden Visa stands as the quintessential residence permit, and offers an excellent opportunity to foreigners with substantial purchasing power who are looking to establish themselves in Spain in a rapid and simple manner.

 

 

Joan Lluis Rubio

Vilá Abogados

 

For more information, please contact:

va@vila.es

 

16th June 2023