Golden Visa Program for Business Owners in Spain

Comparison of the Golden Visa Program in Spain and Portugal After the Record-Breaking Year of 2019

Recently published data from Spain's Ministry of Labor shows that the country's Golden Visa program approved a record 1,422 main applicants in 2019, compared to 1,188 the previous year. Since 2014, the program has welcomed 5,515 main applicants and has attracted at least €2.8 billion.

Although their numbers were significantly lower than in the first half of 2019, Chinese applicants still accounted for about 38% of investments in the second half of 2019, followed by Russians at 17%. Overall, since the program’s inception, Chinese applicants now make up 35% of participants, while Russians account for 24.6%.

While many program participants invest amounts significantly exceeding the minimum €500,000 required for real estate purchases, detailed data on the size of investments are not publicly available. However, even assuming that each main applicant invests only the minimum amount, Spain would have collected around €2.8 billion since the program's launch at the end of 2014, with more than €700 million coming in 2019 alone.

It is worth noting that Spain's Golden Visa program is currently more extensive than Portugal's (and ranks second in Europe after Greece) not only in terms of the number of participants (Portugal approved only 1,245 applications in 2019) but also likely in terms of annual investment volume. Portugal reportedly attracted €742 million in 2019, a figure that is monitored. While there is no exact figure for direct foreign investments in Spain, it almost certainly exceeds €800 million.

Spain's success is achieved even though migrant investors who choose the program pay significantly more per square meter of real estate than in competing programs such as Greece, Portugal, Cyprus, or Latvia. In our analysis conducted in September, we found that, adjusted for differences in required investment amounts, Golden Visa investors receive three times more square meters in Athens than in Madrid.

Business in Spain and the Golden Visa

Not long ago, Portugal was the leader in Europe in issuing so-called Golden Visas. But in 2017, Spain, no less sunny, overtook it, and the gap between them continues to grow. What is the reason for the Kingdom's success, and why has the country been able to attract over half a billion in investor money annually? Specialists from the well-known licensed immigration center "GARANT" answer these and other questions.

Can You Start a Business in Spain with a Residence Permit?

Many investors are concerned about whether they can open a business in Spain with a residence permit. Yes, Spain's Golden Visa allows its holders to conduct business in the country.

This decision was made by the government back in 2017. Spain is an attractive country in terms of investment and business. It has everything: a reliable banking system, prospects, and government incentives.

Investment Requirements for Spain’s Golden Visa Applicants

First, let's limit ourselves to a brief listing of the conditions, and then we’ll analyze them in more detail. If a foreigner, who is not a citizen of one of the EU countries (which is precisely the target audience of the Program), wishes to obtain a Golden Visa in Spain, they must make one of the following investments:

• Purchase and register real estate worth at least €500,000.
• Create a bank deposit in Spain of at least €1 million. Alternatively, they can buy local government bonds or invest in local investment funds for the same amount.
• Purchase Spanish government bonds worth at least €2 million.
• Submit a business project to the Spanish authorities. If it is deemed interesting, this can also serve as a basis for issuing a Golden Visa.

Note that the investment must be maintained for five years.

Is It Necessary to Become a Tax Resident?

This is not necessary if you are the founder of a business and simply plan to earn a profit. In this case, the position of managing the company must be held by a tax resident.

However, if you intend to manage your own business, you will need to become a tax resident of Spain. In this case, you will need to reside in the country for at least 183 days a year.

Real Estate in Spain – The Best Path to Getting a Visa

Market analysts claim that this is the option chosen by the overwhelming majority of investors. In terms of investment sums, this option far outweighs all others combined. It is worth adding that among Golden Visa applicants, the majority are from China and Russia. Half a million euros is not such a high price for a residence permit (and subsequently, the potential for citizenship) in an EU country. For that money, for example, you can buy a spacious apartment in Barcelona or a two-story, though older, villa in the suburbs of Valencia. Additionally, consider the following important features:

• The specified amount can be invested in multiple properties, not just one.
• If you have your own company, you can purchase it.
• It is permissible to use mortgage funds for the investment, but mortgages in Spain are excluded.
• The purchased property can be sold after obtaining the Golden Visa, but after a year, during the visa renewal, the assets must be reacquired.

The Million-Euro Option

This is straightforward, requiring little explanation. Just note that the specified amount cannot be withdrawn from the account while the visa is active. Naturally, the investor must legally confirm the "cleanliness" of their funds.

Buying Government Bonds

This option will be the most financially demanding for the applicant. Moreover, the entire amount cannot be returned for five years. The money must work for the country's economy. However, this is also the least troublesome option, requiring no additional "maneuvers" from the investor.

The Golden Visa as a result of a Successful Business Project

Unlike the previous option, this path will be the most challenging, requiring time and business acumen. On the other hand, it could be even cheaper than buying real estate. All that is required from the investor is to submit their business project to the immigration commission, which they will develop in Spain. The essential components of the project include providing new jobs to the country's citizens and demonstrating that it will positively impact the region's economy. Additionally, the commission must recognize it as innovative, employing modern technologies and production approaches.

Advantages of Spain's Golden Visa

When discussing the necessary financial investments to achieve this goal, it is essential to clarify the benefits that an investor receives by becoming the owner of a Golden Visa:

• Your finances, as well as your close relatives and family members, gain the protection of European legislation.
• You acquire the right to move freely across many countries, including the entire Schengen area.
• Opportunities open up for doing business in developed world countries.
• You can work in Spain, and your children can receive a European education.
• The residence permit status is easily renewable, and in the long term, after 10 years, there is every chance of obtaining a full-fledged passport as a citizen of Spain.
• Long-term residence serves as a haven where you can retreat in times of turmoil in your home country.

Rights of the Spanish Golden Visa Holder

In some ways, these rights are a continuation of the benefits mentioned above. A resident who has obtained the visa has the right to bring their entire family with them, including children, parents (if they are dependents), and even a common-law spouse. Both the main applicant and their family members have the right to work in Spain. The Golden Visa holder status does not require you to become a tax resident of Spain or to be physically present in the country (a significant advantage compared to other residence permits).

The Golden Visa is issued for one year, after which it must be renewed. However, if all investment conditions are met, this procedure becomes a simple formality.

Requirements for Applicants

If the applicant can make the necessary investments, the remaining requirements can be considered standard. Among other things, these include:

• Being at least 18 years old.
• No prior refusals for entry to any Schengen area country.
• Mandatory registration of purchased property in the Spanish Property Registry.
• Having health insurance.
• Proving the legality of income.
• Collecting the necessary package of documents.

The last requirement is difficult to fulfill without the assistance of qualified specialists. The full list of required documents can be found on our website, Garant.in. Here at the "GARANT" center, clients can also receive all necessary legal assistance.

Steps to Obtain Status

• Work on the document package, search for real estate, and sign the preliminary purchase agreement.
• Submit documents for the Golden Visa and obtain it. This step can be done remotely with the involvement of lawyers in Spain.
• The period of document verification by the Spanish authorities.
• Status confirmation, obtaining resident cards.

Conclusion

Some changes are expected in Spain's Golden Visa program shortly. Within the country and in Brussels, it is often criticized for being overly lenient, creating conditions for money laundering. In this regard, Spain lags behind its "stricter" neighbors—Malta, Portugal, and Cyprus. Additionally, the government is dissatisfied that investments are predominantly made through real estate purchases, rather than flowing into the country's "financial bloodstream." The investment size also raises concerns; there is talk of the need for an increase.

Spanish media often write about the need for stricter quotas for Chinese and Russian applicants, who make up the majority of all Golden Visa recipients. However, at present, these are just intentions, and Spain remains one of the most attractive EU countries for obtaining a Golden Visa.