NEW RESIDENCE PERMITS FOR FOREIGN INVESTORS
OBTAINING RESIDENCY IN SPAIN BY INVESTING IN PROPERTY:
- - Investment on real estate assets (500,000.00 EUR or over).
Spanish Parliament recently approved Law 14/2013, dated 27th of September 2013 that seeks to encourage new business initiatives within an international scope.
Said Law was officially published on the 28th of September 2013, and is in force since September 30th 2013.
A more throughout study of this new law would also include the tax, financial and regulatory dimensions of it; however, we will focus on the sections that regulate how to obtain a residence permit when investing in Spain.
By means of the new Law, non-European citizens could be entitled to obtain said permit, whenever they are prepared to carry out a significant capital investment in Spain.
Real Estate investments with a minimum amount of 500,000.00 EUR (per person).
In this case, the minimum amount that an individual must invest on real estate is 500,000.00 EUR (excluding loans/mortgages).
In case of ownership by more than 1 person (for example a married couple), the minimum requirement is not met. In those situations, further study should be carried out to prove that the head of the family is able to show commitment to support the rest of the family through a sponsorship letter.
Acquisition of real estate may be done through an investment company vehicle, whenever the company is not incorporated in a tax haven jurisdiction, and that the applicant for the residence
permit holds the voting majority rights, being entitled to appoint the majority of the members
within the Board of Directors.
Whenever the applicant invests in several properties, this would also be valid, as long as the full amount invested in all of the raises 500,000.00 EUR.
In case there is a mortgage involved, application would also go through, as long as there is an invested amount of 500,000.00 EUR free of encumbrances.
INVESTMENT ON REAL ESTATE ASSETS
- - Investment of minimal 500,000.00 EUR per person on real estate in Spain.
- - Spanish private medical insurance.
- - Proof of being able to support family and properties in Spain.
- - Clean criminal record.
Question: The same person owns three properties: one for 250,000.00 EUR, another one for 150,000.00 EUR, and a third one for 100,000.00 EUR.
Answer: In this case, the person IS eligible for residency permit, as the total value invested in property is 500,000.00 EUR.
The owner of a property, whose value is 750,000.00 EUR, obtained a mortgage loan for
250,000.00 EUR. The remainder of 500,000.00 EUR was paid upon completion of the acquisition process.
Answer: This person would be eligible for residency, as even though he acquired the property with a mortgage, the amount of 500,000.00 EUR is paid and free of burdens.
Husband and wife buy a property with a value of 700,000.00 EUR.
Answer: They are NOT eligible for residency permit, as each one owns 50 % (350,000.000 EUR each only).
However, if the head of the family can show commitment to support the rest of the family through a Sponsorship letter, residency for the others can be obtained.
There is a property off-plan. The private contract has been signed and 550.000,00 EUR has been paid, does this qualify to get this residency.
Answer: No, the ownership of the property has to backed with Title Deeds and proven with a certificate of the Land Registry.
An investor buys a plot of land 300.000,00 EUR, and start construction, investing so far
700.000,00 EUR. Does this qualify?
Answer: No, as there is no Title Deed of Declaration of New Building, and the Deeds registered (for the plot), don’t achieve the minimum 500.000,00 EUR to qualify.
Could I get residency buying through a non-resident company?
Answer: It is possible to do so, meanwhile the applicant is in control of the company:
- - Majority of shares.
- - Majority for voting rights.
Do I have to be Company Administrator?
Answer: No, as long as conditions above are in place.
What are the deadlines for applications?
Answer: For real estate investment permit, there is no application deadline.
Can I submit the application about an acquisition done last year (2012)?
Answer: In principle yes, as there is no time limit and the interpretation is considered retroactive.
What are further benefits of this application?
- - Quicker processing, of 10 days approx. for the first period of residency of one year (by the normal means, it takes around one year).
- - When renewing the process is 20 days, for approval with positive silence.
- - There is no need of staying in Spain any period of time, as long as there is a visit within the Residency Visa.
- - Flexibility to organize the fiscal residency.
For how long is the residence valid?
Answer: In principle, one year for the first period.
Then renewals are valid for 2 years, under the condition that the circumstances did not change.