Visas and residence permits in Spain through property investment
In 2013 the Spanish government introduced the new ‘Ley de Emprendedores’. The new law relating to entrepreneurs hopes to contribute to Spain’s economic growth through the inflow of foreign capital.
One of the circumstances stipulated by the law allows for the concession of residence visas to foreign investors who purchase property with a value equal to or more than €500,000.
Below you will find a few examples of properties for sale in the main cities in Spain that fulfil this requirement:
Application via a legal entity
As an alternative to making a private investment, the foreign applicant of a visa or permit may also carry out the investment by means of a legal entity (a commercial entity), residing in a country which is not considered a tax haven according to Spanish law. In the latter case, the investor must possess (either directly or indirectly) the majority of their rights to vote and the right to appoint or dismiss members of the administration authority.
A very popular way of owning property in Spain is through owning the shares of a Spanish Company who is the legal and full owner of the real estate. However the owner can also be any non resident company in Spain, although certain taxes will apply in each case.
Duration of visa or residence permit
The investment will initially provide visa concession for at least one year.
Once in possession of the visa, in order to be eligible to apply for a residence permit, the applicant must:
1. Be in possession of a valid visa or one which expired less than 90 days ago.
2. Have travelled to Spain at least once during the authorised period.
3. Sustain the investment.
Residence permits are granted for two years and are renewable every two years as long as the conditions met to obtain the concession are maintained.
Family and mobility benefits in Europe
Visas and residence permits apply to both the spouse of the applicant and their children under 18.
The visa or residence permit in Spain allows free movement within the remaining 26 countries signed in the Schengen Agreement:
Austria, Belgium, Denmark, Estonia, Finland, France, Germany, Greece, Holland, Hungary, Iceland, Italy, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Norway, Poland, Portugal, Czech Republic, Slovakia, Slovenia , Spain, Sweden and Switzerland.
Other countries which do not belong to the Schengen Area but which guarantee the free movement of persons are: Andorra (required to show passport together with the visa or residence permit), Monaco, San Marino and the Vatican City.
I want to invest in Spain, but I don’t know the value of the property market or how it works.
Rimontgó was founded in 1959 and is a leading company in the luxury real estate market, who also provide consultation services on corporate investment in Spain. With a broad knowledge of the property market, Rimontgó are able to advise clients in strict confidence during their search to find the most suitable investments which match their criteria. Rimontgó is an exclusive affiliate of Christie’s International Real Estate and founding partner of the European Real Estate Network (EREN).
I want to invest in Spain, but I don’t know about the legal or tax aspects involved.
Rimontgó collaborates with firms of independent Spanish lawyers with both knowledge and experience in foreign investment by individuals or companies. Rimontgó safely guarantees that these firms will provide the best legal and tax assistance to solve every aspect and all the paper work required during the entire process of the property or financial investment.
Visa and Spanish residence permit
Do you provide a consultation service for the obtaining of a visa or residence permit?
We certainly do. Over the course of our 50 years in existence, Rimontgó has established arrangements with the most qualified professionals who are there to advise you during every phase of the application process; from the initial steps to the final stage of obtaining your visa and/or residence permit.
How long does the procedure take to be granted a resident permit?
In the case of visas, applications will be resolved and applicants notified within a period of 10 working days. Residence permits are resolved within a maximum period of 20 days from the submission of the application. If the application is not resolved within the set period of time, it will be deemed upheld by administrative silence.
How should I provide as evidence of my investment when I apply for a visa or resident permit?
If you purchased a property, you must provide a certificate from the ‘Registro de la propiedad’, the Spanish Land Registry Office corresponding to said property, dated 90 days before presenting the application. If the property is in the process of being registered in the Land Registry, an official copy of the public deed of the purchase will suffice as evidence.
Frequently Asked Questions for Visas and Residence Permits in Spain through investment
In the case of property investment, should the property be free of burdens?
Not necessarily, as long as the contribution of private funds is over €500,000. This means that you can buy a property with a mortgage provided that the difference between the purchase price and the current mortgage is more than €500,000.
It may be that you purchase a property that is free of burdens but you want to finance part of the purchase with a loan. If this is the case, as the future buyer you can take out a bank* loan and mortgage the property, as long as this still results in the purchase price made by a foreign buyer amounting to at least €500,000.
*Be aware that the bank may ask for documentation about your pre-existing estate, as well as evidence of regular income that you may receive.
Does having a Spanish residence permit entitle me to healthcare in Spain too?
Being granted either a visa or a residence permit does not entitle you to social or healthcare benefits.
You will need to have private health insurance in order to receive benefits without being subjected to higher charges.
Can I transfer my money from anywhere in the world?
Yes, but you must be able to provide evidence as to the origins of the funds to prove that they come from clean sources and that they are not involved in any criminal or illicit activities.
Additionally, if the investment fund comes from a tax haven, a declaration procedure must be carried out beforehand at the ‘Registro de inversiones‘, a specific department of the Ministry of Economy in Spain.
Other European countries have similar laws, so why should I choose Spain?
For a number of important reasons:
The strength of the economy and the ability to overcome the crisis: Spain’s economic prospects (as the fourth economy in the Euro zone and 13th in the world) for 2014 are very positive. The Spanish government predicted a GDP growth of 0.7%, whilst private entities in the banking sector such as BBVA or Santander push this increase to 0.9%. Other entities of international prestige such as Morgan Stanley,Ernst&Young, HSBC and Barclays have all recently recommended investing in Spain due to its solid state of value in Europe.
Spain’s evident appeal as a country for property investment: in the first trimester of 2013, the proportion of sales of property to foreign investors represented 8.63% of total sales, coming close to some of the highest percentages in Spanish history.
Since 2010 foreign investment in Spanish property has been increasing and in 2012 it represented 5,540 million Euros of investment; 17% more than in 2011 and the highest since 2004.
The leveling of property prices: according to several reports on European property market trends carried out by PwC (PricewaterhouseCoopers) and BNP Paribas, current property prices in Spain have reached a turning point, providing a unique opportunity for return on investment as soon as economic recovery triggers an upturn in prices, as well as rewarding investors with significant profits.
A privileged geostrategic location: Spain is the gateway to the Mediterranean, North Africa and South America. It also has a number of important ports in cities such as Algeciras, Las Palmas, Barcelona and Bilbao, not to mention Valencia, the main port on the Mediterranean. The port of Valencia is the 5th largest in Europe and the 30th on a global scale, with a movement of 4.5 million containers in 2012; an increase of 3.3% compared to 2011. Spain also shares third position with Japan in the ranking for the movement of containers for countries with the most ports.
The network of modern and quality infrastructures in place, as well as an excellent transport network.
A tax revenue below the EU-27 average and the Euro zone average. Also, corporate tax is below the OECD average, boasting an attractive tax reduction system.
A superb quality of life: a rich historical and cultural heritage, world-renowned gastronomy, an exceptional climate and more than 8,000km of coastline.
Other alternatives to obtain a visa
The law grants residence visa concession to foreign investors that comply with the following requisites:
1. That they buy a property with a value equal to or more than €500,000
2. That they acquire public debt equal to or more than 2 million Euro
3. That they acquire assets and company shares of Spanish firms, or make a bank deposit equal to or more than 1 million Euro
4. That they undertake a business project in Spain of “general interest” and one which is deemed “pertinent”, leading to the creation of jobs, an economic investment or a technological or scientific contribution. In this case, it will be necessary to show an affirmative report issued by the ‘Dirección General de Comercio e Inversiones’, Spain’s Directorate-General of Trade and Investment of the Ministry of Economy.
While Rimontgó is a European leader in online marketing of residential luxury homes, in our Company we also have a division of commercial Real Estate and Income producing property. Please visit Investment/Profitability.