By Uglobal Staff
Spain's immigration investment program began in 2013 and offers investors an opportunity to obtain legal residence in Spain, with a Spanish golden visa. Similar to golden visas in neighboring countries, an investor can include dependent family members on their applications, which will grant them immediate legal residence.
Investors, who are approved under Spain's immigration investment program, will initially receive a residence visa valid for one year. Investors can then transition to a renewable residence permit for an initial period of two years.
The process of gaining a Spanish golden visa can be completed in as little as two months. However, gaining citizenship in Spain will take substantially longer. After a five-year period of temporary or full-time residence in Spain, residents can then apply for citizenship. It will take an additional five-year period before citizenship can be granted, according to Bence Zákonyi, Project Support Officer at the European Union Intellectual Property Office.
It's pertinent to those interested in gaining citizenship to know that Spain does not allow dual citizenship. This means candidates will lose their original citizenship if they choose to become citizens of Spain.
There are a number of paths to gain legal residence in Spain, including: Investing at least €2,000,000 in governmental bonds, investing at least €1,000,000 in shares of companies, deposit of €1,000,000 euros in Spanish bank accounts, purchase of real estate in Spain for at least €500,000, and a major business investment, which fulfills at least one of the following three conditions: A meaningful job creation as a direct result of the investment, a significant socioeconomic impact in the geographical location where the activity will be carried out and technological or scientific impact.
"The most popular option is an investment of €500,000," said Zákonyi. "There are no nationality restrictions at all, Spain is a welcoming country."
The minimum investment of €500,000 is enough to purchase one of the following options: One very good and profitable restaurant, five seaside two-bedroom apartments, 10 seaside one-bedroom apartments, four castles from the 13th century (with land), 815 acres of land, also one big or two small vineyards in the historic vine regions with EU protected brands, according to Zákonyi.
Future applicants for the Spanish golden visa must be 18 years old, have adequate health insurance, pass a health screening, and have entered Spain legally without a criminal record.
Benefits include free public schools and tertiary education. Also, Spain is a secure jurisdiction that offers the seventh best healthcare globally, that does not require any out of pocket cost to citizens, according to Business Insider.
Perhaps one of the most important financial benefits is that investors only need to visit Spain once per year and is not required to live there full-time. Investors are also not required to occupy their property at all in order to qualify. Golden visa recipients have the option to rent out their property for additional income.
"If the wealthy resident spends less than 183 days per year in Spain, he or she can keep the tax residency outside of the high-tax jurisdiction," said Zákonyi.
In addition, investors who receive the Spanish golden visa are allowed to travel, visa-free throughout Europe's Schengen Zone. Travels are restricted to a period of 90 days within each six-month period. Europe's Schengen Zone includes France, Germany, and Switzerland among 23 other countries.
Nearly four years after the Spanish immigration investment policy was introduced, 27,301 residency permits were handed out to 2,236 investors and their family members, with 72 perccent of investments in property, according to Mark Stücklin, head of www.spanishpropertyinsight.com, a property information website.
The demand for property has been largely directed at Barcelona, with 893 property investments. Malaga follows with 348, Madrid with 306 and Costa Blanca with 151.
"Naturally, most of the clients are originally Chinese and Russian citizens, but applicants arrive from everywhere," said Zákonyi.
The program looked bleak in its production when it originally began in 2013. The lack of success was attributed to its comparison to programs in neighboring countries, like Portugal. Also, because the program was said to be too bureaucratic when introduced and didn’t give participants a clear and timely path to citizenship. However, after upgrades were implemented, the program has had a much-needed positive effect on Spain's economy.
Spain’s immigration investment program has accumulated €2.16 billion for Spain since 2013. The results have improved greatly after 2015 when Spain's government upgraded the benefits of the application process to permit family members to make the program more enticing to investors. This improvement paid dividends as golden visa investments were four times greater in 2016 than they were in 2014.
"The Spanish Golden Visa initiative has attracted some foreign capital to Spain during the crisis, but most of all it has helped increase demand for property in the country at a time when domestic demand was deeply depressed," said Stücklin.
The benefits of Spain's immigration investment program will help both the investors and the country. Spain will benefit due to the relatively high cost of investments required to obtain a Spanish golden visa. Investors will benefit by gaining legal residence in a beautiful country while avoiding Spain's high tax rate, which borders 45 to 47 percent for those who make above €600,000 annually.