According to official statistics and data taken from Idealista.com, the Chinese and Russians continue their long-standing positions at the top of the real estate purchases ranking. This interest in real estate investment in Spain is largely a result of Law 14/2013, on support for entrepreneurs, which offers the possibility for investors to gain residence permits with the right to free movement in most European Union countries in exchange for a significant capital investment. According to data from the Secretary of State for Trade, Chinese and Russian citizens have taken advantage of this regulation the most since its entry into force in September 2013 , although the ranking also includes Ukrainian, Venezuelan, American and Saudi Arabian citizens.
The main requirement for obtaining a residence permit for investors is to make a significant investment in Spain directly or through a legal entity controlled by the applicant and not domiciled in a tax haven.
Why is this residence permit so appealing?
The permit has a series of advantages:
- Unlike all other existing permits, this residence permit does not require effective residence in Spain. In other words, it allows the holder to choose between actually residing in Spain, becoming a tax resident, or using residence simply as a multiple-entry visa.
- It gives the holder the right to work as an employee, a self-employed person and to hire, if appropriate, third parties.
- Joint or subsequent processing for family members. There is no requirement for the family members to wait 1 year, unlike with other residence permits. Even children of legal age and ascendants can apply for residence. The children need to prove economic dependency on the holder, and the ascendants also need to prove that they are dependent on the holder.
- In these cases, the processing time for the visa and residence is shorter.
- Validity period - the initial residence for investors is valid for 2 years, and is renewable for successive periods of 5 years, as long as the investment is maintained.
- In these cases, residence permits can be applied for directly from Spain, and the visa application procedure with the Spanish Consulate in the applicant’s country of current residence can be avoided. In order to do this, the applicants must be legally in Spain at the time of submitting the application (entering with a tourist visa, for example).
The investment has to be classified as at least one of the following types (the most common is real estate investment):
- Purchase of real estate in Spain, with an investment value of 500,000 euros or more, free of taxes and charges (most common type).
- 1 million euros in shares or participations of capital companies with real business activity.
- 1 million euros in investment funds, closed-end investment funds or venture capital funds incorporated in Spain.
- 1 million euros in bank deposits. The applicant must be the sole holder of the bank deposit.
- 2 million euros in Spanish public debt. The applicant must be the sole holder of the investment for a period of 5 years or more.
If the investment is made by a couple married under the community property system or similar, and the value does not amount to at least double the established thresholds, it will be considered to have been made by one of the spouses, and the other spouse will be able to apply for a residence visa as a family member. If, on the other hand, the investment made by the couple is equal to or greater than double the established thresholds, both spouses may apply for and obtain a visa or residence permit as investors.
The requirement to maintain investments
During the validity of the visas or permits, the foreigners must maintain the requirements which entitled them to these. The authorities may carry out the necessary checks on this. Any changes must be notified to the Large Companies and Strategic Collectives Unit within 30 days. If it is verified that the legally established requirements are not met, the competent body may cancel the visa or permit, in a reasoned manner, following a hearing.
Although there is no obligation to officially reside at the time the permit is granted, if the holder wishes to obtain Spanish nationality or long-term residence, he/she must prove his/her residence during previous years for periods of longer than six months each year.