Complete Guide to Spain's Golden Visa

GUIDES

SPAIN GOLDEN VISA

Your Complete Guide to Spain's Golden Visa: Everything You Need to Know about Spanish Residency by Investment

Spain's Golden Visa programme has been a hot topic since its inception in 2013. It's designed to attract wealthy foreigners to invest in the Spanish economy, primarily through real estate purchases, job creation, and securities investments.

The programme offers six investment routes, with property investment being the most popular. The minimum investment threshold stands at €500,000. One of the programme's key selling points is its flexibility. Investors aren't required to pass language or cultural exams. There's no obligation to reside in Spain, and property investments can be rented out.

To maintain residency status, investors must keep their investments intact. After five years of residence, they can apply for permanent residency. Citizenship becomes an option after a decade, albeit with the condition of relinquishing one's original passport.

First up - Important updates to the Spain Golden Visa laws

Spain's Golden Visa programme isn't ending, but it's certainly evolving.

The Spanish government announced significant changes to the programme during the Council of Ministers in April 2024. These changes signal a shift in immigration and housing policies, aimed at addressing domestic housing challenges.

Since its inception in 2013, Spain's Golden Visa programme has been a magnet for foreign capital. It's been particularly attractive to Chinese, Russian, and Iranian investors. Post-Brexit, there's been a notable uptick in applications from British and American citizens seeking a European foothold.

However, the programme's success has brought its own set of challenges. Recent evaluations show that 94% of Golden Visas granted in Spain were concentrated in major urban areas. This has put significant strain on housing markets in Madrid, Barcelona, and the Balearic Islands.

Prime Minister Pedro Sánchez has stated that the reform aims to transition housing from a "speculative business" to a fundamental right. The most significant change is the proposed removal of the real estate investment option from the Golden Visa alternatives.

This shift mirrors recent changes in Portugal's Golden Visa programme. However, it's important to note that this change won't happen overnight. The exclusion of real estate from Spain's Golden Visa programme isn't expected to take effect until 2025, though an official date hasn't been announced.

Even with these changes, the Golden Visa programme will continue with other investment options. These include substantial investments in government bonds or Spanish companies.

The debate around Golden Visa programmes in Europe continues, with countries like the UK and Ireland terminating their programmes, while others like Portugal and the Netherlands have modified theirs to exclude property investments.

As these changes unfold, potential investors and current visa holders should keep a close eye on developments. The programme's future will likely balance economic incentives with social welfare concerns, shaping the landscape of residency-by-investment across Europe.

Overview - What is the Spain Golden Visa programme?

The Spain Golden Visa programme, officially launched in 2013, is a residency-by-investment scheme. It's designed to attract non-EU investors to Spain by offering them and their families the opportunity to obtain Spanish residency permits.

The programme allows investors to choose from several investment options, with real estate being the most popular. The minimum investment threshold is €500,000, making it competitive compared to similar programmes in other European countries.

One of the programme's key attractions is its flexibility. Investors aren't required to reside in Spain to maintain their residency status. They only need to visit once every two years to renew their permit.

The benefits - Why apply for a Spain residence permit by investment?

The Spain Golden Visa offers a plethora of benefits, making it an attractive option for investors worldwide. Firstly, it provides visa-free travel within the Schengen Area. Golden Visa holders can spend up to 90 days in any 180-day period in other Schengen countries without additional visas.

Family inclusion is another significant advantage. The investor's spouse, unmarried dependent children, and dependent parents can all obtain Spanish residence permits under the programme.

There are no language proficiency, education, or business experience requirements for Golden Visa applicants. This makes the process more straightforward compared to traditional immigration routes.

The programme also offers a 'safe haven' for investors. Even if borders are closed to tourists, residence permit holders can enter Spain at any time.

Access to European education and healthcare is another compelling benefit. Investors' children can study at Spanish schools and universities, while the whole family can receive quality medical services in Schengen countries.

Golden Visa holders also have the right to work and do business in Spain. They can obtain work permits, transfer existing businesses to Spain, or create new companies.

Perhaps most importantly, the Golden Visa can lead to EU citizenship. After five years of residence, investors can apply for permanent residency. After an additional five years, they become eligible for Spanish citizenship.

Who can obtain the Spain Golden Visa?

The Spain Golden Visa is available to non-EU citizens who meet specific criteria:

The primary applicant must be over 18 years old.
They must have a legal source of income, earned outside of Spain.
A clean criminal record is essential.
Applicants must not have any outstanding debts in Spain.
Valid health insurance coverage is required.

Family members can also be included in the application:

Spouses or partners in officially registered or unregistered partnerships, including same-sex couples.
Children under 18.
Adult children who are unmarried, have no children, and are financially dependent on the investor.
Parents who are financially dependent on the investor or their spouse.

Investment options for the Spain Golden Visa

Spain offers six investment routes for Golden Visa applicants:

Option 1: Real Estate Purchase

Invest in Spain's Golden Visa by purchasing real estate, with a minimum investment of €500,000. This option allows for flexibility in purchasing one or multiple properties, either residential or commercial. Investors can buy directly or through a company where they hold a majority stake. Be aware of additional costs like transfer tax, VAT, and stamp duty, which can add 10-25% to the purchase price. Note that potential changes may exclude real estate from the program by 2025.

Option 4: Investment Fund Units

Opt for a balanced approach with investment fund units, requiring a minimum investment of €1,000,000 in Spanish investment funds. This route grants access to professionally managed portfolios, including mutual funds, hedge funds, or private equity funds. It combines the hands-off nature of bank deposits with the potential for higher returns found in share purchases.

Option 2: Bank Deposit

For a more liquid and low-risk investment, consider the bank deposit option. This requires a minimum deposit of €1,000,000 in a Spanish bank account. Investors have the flexibility to distribute funds across multiple accounts or financial products. The key condition is that the funds must remain deposited throughout the residence permit's duration, providing a secure and stable investment option.

Option 5: Government Bonds

For risk-averse investors, the government bonds option offers a conservative and secure investment. With a minimum investment of €2,000,000 in Spanish public debt instruments, this route is backed by the full faith and credit of the Spanish government. Although yields are typically lower, it provides a low-risk investment with guaranteed returns.

Option 3: Share Purchase

Capitalise on Spain's economic growth by purchasing shares in Spanish companies. This option requires a minimum investment of €1,000,000, allowing you to spread your investment across multiple firms, whether public or private. The share purchase route offers potential for higher returns while supporting Spanish businesses, making it an appealing choice for investors seeking growth opportunities.

Option 6: Business Investment

The business investment option offers the most flexibility and potential for active involvement in the Spanish economy. Unlike other options, there's no set minimum investment amount. The focus is on job creation or making a significant socio-economic impact in Spain, whether through starting a new venture or investing in an existing business. This route is ideal for those looking to make a lasting contribution to the Spanish economy.

The Application Process for the Spain Golden Visa

The entire process can take anywhere from 2 to 6 months, depending on the investment route chosen and individual circumstances. Obtaining a Spain Golden Visa involves several steps. Here's a step by step guide to help you navigate the process:

Step 1: Initial Due Diligence

Begin your Golden Visa journey with a preliminary due diligence check to identify any potential issues early, reducing rejection risks. A certified Anti-Money Laundering Officer will conduct this check, requiring your passport and other ID documents. This essential step takes about a day.

Step 4: Application Submission

Once your documents are ready, submit your Golden Visa application online. Ensure you're in Spain during this step, possibly entering with a Schengen visa if needed. This submission is crucial and marks the official start of your visa processing.

Step 2: Investment Selection

After passing due diligence, you can proceed with your investment choice. If opting for real estate, this process typically takes 1 to 4 months. Engage a local real estate specialist, obtain a taxpayer number (NIE), and sign the necessary documents, including a power of attorney if you're not in Spain.

Step 5: Biometrics and Processing

After submission, you must visit a police station in Spain to submit biometric data, such as fingerprints. Legal representatives can assist you during this process. The application processing time is generally 30 to 45 days, during which the authorities will review your case.

Step 3: Document Preparation

While your investment is underway, you can start preparing your Golden Visa application. This process takes 3 to 5 weeks and involves gathering documents like your passport, criminal record check, proof of investment, and obtaining health insurance valid in Spain. Complete government forms and pay all necessary fees.

Step 6: Collecting Your Residence Permit

If your application is successful, return to Spain to collect your residence permit card in person, usually at a police station. Legal representatives may accompany you. Your initial permit is valid for two years, with the option to renew for five-year periods as long as you maintain your investment.

Taxes and costs of Spain Golden Visa

Golden Visa holders are subject to Spanish tax laws if they spend more than 183 days per year in Spain. Property buyers should be aware of additional costs such as transfer tax, VAT, and stamp duty, which can add up to 10-25% of the property value.

Next step - obtaining Spanish citizenship after Golden Visa

After holding a Golden Visa for five years, investors can apply for permanent residency. After ten years of residence, they become eligible for citizenship. This requires passing Spanish language and cultural knowledge tests, and typically involves renouncing one's original citizenship.