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Tuesday, July 15th, 2014

Chinese businesses and nationals now more confident when investing in Spain

There is no doubt that Spain represents an attractive country to Chinese nationals, and this has been demonstrated by the rise in the number of Chinese tourists visiting our country. In 2013, this number reached 211,000, which represents a 50% increase compared to the previous year. However, despite this notable rise in interest in our country, the number of Chinese visitors is still far from that of British or German tourists (13 and 8 million respectively in the last year). Nevertheless, certain obstacles which hinder Chinese tourists wanting to visit Spain, such as a lack of flight connexions between both countries, are beginning to be overcome. For example, Air China has now opened an air link between Barcelona and Beijing, with a changeover in Vienna. However, Spain still remains a considerable distance behind other European countries in terms of the number of tourists it receives from China, and this is illustrated with the cases of France, a country which received 900,000 Chinese nationals last year, and Germany, with more than half a million Chinese visitors during the same period.

This growing Chinese interest in our country has been reflected in the investment sector, with activity as significant as Dalian Wanda’s acquisition of the Edificio España in Madrid, for an approximate value of €300 million, which, without a doubt, represents one of the biggest international investment operations in the housing sector in our country. In 2005, Chinese investment in Spain only totalled €0.6 million, but towards the end of 2012, this figure had risen to over €400 million (according to the Spanish Ministry of Economy’s Investment Registry). In fact, China has now moved from occupying the 65th position in 2005 in the list of countries investing in Spain, to the 10th position in 2012.

Chinese investors interested in the Spanish property market have found that, following a drop in prices triggered by the economic crisis which has affected Spain, assets have now stabilised, and this has increased attraction from both large investment groups (whose primary objectives are office buildings in key areas of Madrid and Barcelona), and small investors who are interested in quality residential properties in large cities like Madrid or Valencia. Exclusive developments on the outskirts of these cities, such as Las Rozas (Madrid) or Los Monasterios (Valencia) for example, are also a target for this latter group.

This increased interest in investing in Spanish real estate follows the approval of the famous ’Entrepreneurship Law’, which was passed at the end of 2013. Thanks to this law, it is now possible to obtain a visa and residency permit by (amongst other options) purchasing a property for the value of €500,000 or more. One of the main added advantages of obtaining this visa and residency permit (which can be extended to the investor’s spouse or children under the age of 18), is that it allows the holder to circulate freely between the various countries which form part of the Schengen Agreement.

As well as important details relating to the ‘Entrepreneurship Law’, it is also worth highlighting that Spain offers other attractions to Chinese nationals looking to invest in our country, including a high standard of education, a prestigious healthcare system, an advantageous tax system, and the fact that we are the European leader in terms of  quality of life. To this, we can add other key factors which increase their interest, such as gastronomy, art, culture, history, geographical diversity and climate.

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