WHAT WILL HAPPEN WITH THE SPANISH GOLDEN VISA? MANY EXPATS IN SPAIN AND THOSE WHO WISH TO TAKE ADVANTAGE OF THE INVESTOR VISA OPTIONS ARE WORRIED.
The President of Spain, Pedro Sanchez, has announced the government’s plans to cancel or change the so-called Golden Visa in Spain. He specifically puts emphasis on his plans to change the real estate investment option, considering that it has a negative impact on the Spanish real estate market, which should become far more socially responsible and accommodating to provide housing to those who already reside here and need affordable living space.
To clarify, the Spanish investor visas, also called Golden Visas, were introduced in 2013 through the Law 14/2013, of 27 September, on support for entrepreneurs and their internationalisation.
As per Article 61 of said law, Spain allows the entry and stay in Spain for reasons of economic interest in the following cases:
“1. Foreign nationals who intend to enter or reside, or who already reside, in Spain shall have their entry and stay in Spanish territory facilitated for reasons of economic interest in accordance with the provisions of this section, in those cases in which they can prove that they are:
a) Investors.
b) Entrepreneurs.
c) Highly qualified professionals.
d) Researchers.
e) Workers who carry out intra-corporate movements.
f) International teleworkers.”
In accordance with art. 63 of Law 14/2013, you may apply for a residency and work permit, if you:
· invest at least 500.000 € in Spanish real estate,
· invest 2 million € in Spanish debts,
· invest 1 million € in Spanish companies, stock,
· deposit 1 million € in a Spanish bank account,
· are hired as a highly qualified professional by a company in Spain or
· plan on realising a business project considered as of special economic interest.
The investment visas (real estate, bank deposit, Spanish debt, Spanish company) are considered Golden Visas and allow for a privileged and faster application process than the normal residence and work permits that usually require applying through a Consulate and then a rather long processing time.
Investors can choose to either apply for a one year residence visa at the Consulate or directly for a three year residence permit while they find themselves legally in Spain.
The goal of Law 14/2013 of September 27 was to promote economic reactivation by trying to strengthen the business and self-employed sector, particularly for investors, entrepreneurs, highly qualified professionals, researchers, workers who carry out intra-business and tele-business movements, as well as international workers, who can take advantage of this option to enter and remain in Spain.
The Spanish Government is considering the modification of this law, or its possible elimination. So far, no new drafts have been suggested and any change would require a proposal for a new wording of the law.
One possible step would be upping the minimum investment in real estate since the required investment of 500.000 € is no longer a reserved to investments in luxury real estate. In fact, in the major cities and more popular regions of Spain, many properties will already be offered at prices of 500.000 € and more. Voices supporting this thesis argue that this leads to the Golden Visa investments taking possible social living space away from the community.
At Artemis Law, we do not expect the Law 14/2014 to be abolished completely. This would eliminate many other visa and residence permits that do not have anything to do with the problem that the Government wishes to solve, the continuing real estate crisis and problem of availability of affordable living space.
It seems far more likely that the investment threshold for the real estate investor visa and residence permit will be increased. One possible way to address the alleged impact of the Golden Visa on the Spanish real estate market would be to up the required investment to 1 Mio. € and thus, aiming to limit the Golden Visa investment to luxury properties. Besides the raising of the required investment amount, the law would have to be changed to not allow for the purchase of various properties to comply with the threshold, of course.
While we do not have any concrete information on the possible changes and their chances of passing to change the law, we can only speculate.
What is important is that at this moment, no changes have happened yet and implementing changes would take some time.
We recommend holders of investment visas and residence permits to get in touch to assess whether a renewal is already an option in their case. Once the changes come into force, we do not expect the law to cancel existing permits.