Spanish Residence Investor Guide & FAQ

Spanish Residence Investor Guide & FAQ


Spanish Residence Investor Guide & FAQ

Spanish Residence Permits for Property Investors

Your passport to European Residence and visa-free travel.

Spain introduced in 2013 a new law to attract property investors from outside the European Union by offering Residence permits in return for an investment of €500,000 or more in Spanish real estate.

Popularly known as the “Golden Visa” law, but officially called the Ley de Apoyo a los Emprendedores y su Internacionalización 14/2013 (Law in support of Entrepreneurs and their Internationalisation), the law also entitles investors to visa-free travel in the Schengen area of the European Union for 90 out of every 180 days.

Recently, in July of 2015, the Spanish Government passed an amendment to the Law in order to make it easier and faster to obtain the Residence Permit

Jausas and Duvan Duvan explain this law, and answers frequently asked questions.

The Importance of Legal Advice

Should I hire a lawyer?

Yes. When making a big investment in a foreign country you need the best legal advice you can get. You should hire a qualified lawyer at a reputable law firm that can deliver the service you need to invest without taking unnecessary risks, and offer you a long-term service to maintain your Residence Permit.

Some property companies offer a cheap, or even free, legal service for buying property and obtaining a Residence Permit. Is this good value?

If the legal service is cheap, or even free, it is usually a bad sign. It suggests the legal service is either poor quality, or being paid for by your property company out of inflated commissions on the property you are buying, which is asking for trouble. With such an important investment you need a qualified lawyer who you can be sure is looking after you, and has no conflict of interests. Cheap or free legal services are a false economy that increases your risks whilst driving up your costs in the long run. Don’t take the risk.

(visit www.jausaslawfirmspain.com for reliable legal services in Spain)

Investor Requirements

To take advantage of this new law and get the Residence Permit in Spain you must meet the following conditions:

  • ●  Not be in Spain in an irregular situation,
  • ●  Be over 18 years of age
  • ●  Have no criminal record in Spain or in the countries where they have resided for the past five years, for criminal offenses defined in the relevant Spanish legislation.

● Not be subject to an alert issued for the purposes of refusing entry in the territorial space of countries with which Spain has signed an agreement in this regard.
● Have a health insurance policy with an insurance company authorised to operate in Spain.
● Have sufficient financial resources for themselves and for the members of their families during their residence in Spain.
● Have paid the visa or authorization processing fee.

The investment can also be made through a company, so long as the company is not based in a tax haven, and you can demonstrate a controlling stake in it (direct or indirect control over the voting rights and the power to name and remove the majority of board members).

One application can cover Residence permits for your immediate family members, that is spouse or person with an analogous affective relationship, children who are minors or those of legal age who, being financially dependent on the holder, have not formed a family unit for themselves and the parents in their charge) if required.

Investment Requirements

You must make one of the following investments out of your own funds:

  • ●  €500,000 on Spanish real estate
  • ●  €2 million on Spanish Treasury bonds
  • ●  €1 million on Spanish company shares
  • ●  €1 million in investment funds constituted
  • ●  €1 million in bank deposits in Spanish financial institutions
  • ●  A ‘major’ business investment which fulfils at least one of the following conditions: i)Meaningful job creation, ii) significant socioeconomic impact in the area where the investment takes place) technological or scientific impact

 

How it works with a property investment?

The first step is to buy a property worth €500,000 or more in Spain, and sign the title deeds before a notary. For the purposes of Residence applications, the investment value that counts is the purchase price recorded on the deeds.

The purchase may be done in person, or through a POA arranged before a notary in Spain or any member- state of the Hague Conference. Alternatively, a POA may be arranged through a Spanish consulate or embassy anywhere in the world. If the purchase is made in person, the subject needs be legally in Spain (under a temporary/tourist visa or any other legal status according to the requirements established for each nationality).

Once the property has been acquired, you can apply for the Residence Permit, which lasts 2 years before the Unit for Large Companies and Strategic Economic Sectors, and you must be legally in Spain in the moment of the application.

This permit may be renewed for unlimited additional 5 years periods, as long as the investment still in place.

Spanish Residence Permit FAQ

The investment

How much do I have to invest?
At least €500,000 of your own money, net of any mortgage financing.

Can I use a mortgage?
Yes, but only for the excess above €500,000 that must be financed out of your own pocket.

Is it retroactive?
No. Any investment made prior to the 28th of September 2013 will not qualify.

Do I have to invest €500,000 all at once?
No, you can spread the investment out over time, but, you can only apply for the Residence Visa once you have invested €500,000 or more of your own funds. Therefore, for example, if you spend €300,000

on a property today and €200,000 on another property in a year’s time, you will then be able to apply for the Residence Permit.

Are transaction costs like taxes included in the investment threshold of €500,000?
The short answer is no, meaning you have to spend €500,000 not including tax and expenses.

What taxes and transactions costs will I have to pay?
It depends on the type of property and where it is located. Generally speaking you pay VAT on new properties and a transfer tax (ITP) on resale properties. You will also have to pay stamp duty, notary, and registry fees. See our guide to transaction costs for more information.

Do I have to buy one property worth €500,000 or more, or can I buy several properties with a combined value of €500,000 or more?
You can buy several properties costing less than €500,000, so long as their combined value is €500,000 or more.

Can I rent out the property I buy?
Yes, this new law places no restrictions on legal property use.

What kind of property do I need to buy?
You can buy commercial property, residential property, or land. In other words, any type of property investment is valid.

Can I sell the property?
Yes, you can sell the property, but you have to re-invest €500,000 in another Spanish property if you want to renew your Residence Permit.

What should I invest in?
Spanish real estate prices have fallen for several years, but not all investments are equally good. Don’t let the Residence Permit distract you from investing wisely. Focus on quality investments offered by professionals with good reputations.

The Residence Permit

How long is the Residence Permit granted for?
Initial Residence Permit has the duration for 2 years, renewable indefinitely every 5 years.

Can I lose the Residence Permit?
Yes, if you liquidate your investment in Spain, or fail to meet one of the investor requirements.

How long do I have to spend in Spain?
You only have to visit Spain once to get or renew the Residence Permit. There is no minimum stay requirement, and you do not have to become a fiscal resident.

Can I get a Spanish passport?
This is a 2-year Residence Permit, not the right to permanent Residence or a Spanish passport. However, it can lead to long-term Spanish Residence after 5 years of continuous residence, and citizenship after 10 years.

Does this replace other ways to get Residence?
No, it does not. Existing permits and procedures are still valid. This law is specifically tailored to attract affluent non-EU investors, and helps cut red tape.

Can I include my family in my application?
Yes, you can get additional permits for your spouse or person with an analogous relationship and children under 18 years or those of legal age who, being financially dependent on the holder, have not formed a family unit for themselves. You can also get additional permits for your parents in your charge.

Can I travel visa-free in Europe?
You can travel without a visa for 90 days out of every 180 days within the Schengen area, but you will still need a visa to enter EU countries outside the Schengen area like the UK.

Can I work in Spain with this Residence permit?
Yes, you can reside and work in Spain during the validity of the permit.

Do I need health insurance cover for Spain even if I’m never there
Yes, it does not matter how little time you plan to spend in Spain, you must have health insurance cover valid in Spain.

What kind of health insurance should I have in Spain?
If you are a citizen of a Member State of the European Union, the European Economic Area or Switzerland and entitled to coverage under the social security system of your country, then you can apply to the European health Insurance Card (EHIC), which can be obtained from the public health authorities of your home country.
If you are a citizen of a country outside the European Economic Area or Switzerland, then you must find out whether there exists a mutual health provision agreement between the Social Security system of your country and Spain.
If you do not fall into any of the above categories or cannot give proof of the document issued by the relevant national authority of your country, then prior to departure, you must take out private medical insurance to cover the whole stay in Spain.

However, if you have a labor contract in Spain, you will have the national health cover automatically.

Can my children go to a state school in Spain?
Yes, in fact in Spain it is mandatory the scholarship for children under 16.

Tax Implications

Once I have a Residence Permit, what are my tax obligations in Spain?
If you spend less than 183 days a year in Spain, you can avoid fiscal Residence, meaning you do not have to pay income tax in Spain, or declare your worldwide assets. The option to avoid fiscal Residence is one of the big attractions of this new law. However,, you still have to pay certain taxes related to owning property in Spain, such as rental income tax and municipal taxes.

The Application Process

How long does it take?
20 working days for Residence Permits.

Do I need an NIE number (Spanish Identify Number for Foreigners)?
Yes, you need an NIE number to buy a property in Spain. You can get this in person in Spain, or your lawyer can get it for you with a POA.

Can I purchase through a company registered outside Spain?
Yes, so long as the company is not based in a tax haven, and you can demonstrate control of the company.

Do I have to come to Spain?
The real estate property can be acquired without visiting Spain though a POA. However, in order to apply for the Residence Permit, you have to visit Spain.

Jausas are a leading Spanish law firm with an international staff who can speak your language. To avoid unnecessary risks and false economies get in touch with Jausas to invest in Spain and get your “Golden Visa”.

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