How to obtain Spanish residency
If Spain is on your investment radar, you need to know what is considered a “significant investment” that will make you eligible to apply for Spanish residency.
Basically, there are three investment options for foreigners seeking to obtain European residency in Spain. No matter which of the three you choose, you will need to keep it for a minimum period of three years.
You can invest as an individual or as a company, something that is unique in the world of immigration investments. As long as your company is not located in a tax haven and you have a majority stake in it, you can invest as a legal entity.
Option 1: Real Estate Investment
Have you always dreamed of enjoying the Mediterranean climate, perhaps in your villa by the sea?
Then investing in real estate as a way to obtain your Spanish residency could be the perfect option for you. Many investors love to give their family access to a residential home in Spain, as well as access to all of Europe.
If you want to go this route, the minimum amount required is €500,000which makes him the the cheapest option too.
You must purchase real estate no more than 90 days before submitting your visa application. You cannot apply for Spanish residency retroactively.
What is considered a suitable investment? Luckily, Spain is quite flexible. You can buy land, plots, buildings, houses, commercial properties, parking, etc., as long as it is worth €500,000 or more.
You can also mix and match residential and commercial properties, as long as the combined value meets the minimum required.
Several residency visa applicants can pool their resources to purchase a property. For example, you and a friend can contribute to buy a 1 million euro villa.
Another interesting thing is that you can mortgage the amount that exceeds the minimum investment of €500,000. So, as long as you have half a million of your own funds, you can become a resident by investment in Spain.
You can rent the property(s) as you wish, although don’t forget that you will have to pay income tax (24%).
Other taxes associated with real estate include VAT on the purchase of new properties, a transfer tax (ITP) on resale properties, capital gains tax (24-27%) on the sale of a property and capital gains taxes. the property.
Before jumping to this option, Read more about why Andrew is not investing in Spanish real estate.residency opportunities aside.
Option 2: Start a business
This is an original option because it does not have a minimum investment amount. This is probably the reason why Spain has attracted so many investors to select this investment route.
If you have a brilliant business idea that you think could be carried out in Spain, you could be granted Spanish residency without the need to make a fixed monetary investment in advance.
However, you must meet at least one of these conditions:
- It will create jobs for local people.
- It will have a regional socioeconomic impact
- It will contribute significantly to scientific or technological innovation.
You will agree to start a company in Spain and do some business there. The cost of setting up a Spanish company and obtaining residency is not outrageous; Expect to pay between approximately €5,000 and €10,000 for a full service, depending on a variety of factors.
Spain isn’t exactly known as a tax haven, but there are some incentives to encourage people to start businesses here.
Spanish startups enjoy a tax rate of just 15% for their first two years of activity, which is one of the main reasons for Barcelona’s vibrant startup scene. After that, rates are 25% with several other caveats.
In general, even if taxes in Spain are going down, companies are still subject to audits and other tax requirements that you won’t encounter if you did business in another, more business-friendly jurisdiction.
The real impact is the tax on your salary as a director of your company (and you must pay one).
Option 3: invest in financial assets
Perhaps the simplest option is to invest in a financial asset, but it has a higher price. That said, the Spanish government offers many options:
- Put €2,000,000 in government bonds
- Buys €1,000,000 value of shares or participations of Spanish companies
- Commit €1,000,000 in investment funds or venture capital funds in Spain
- Make a €1,000,000 deposit in a Spanish bank account
You must make the capital investment no earlier than 60 days before the deadline for submitting your application.