Spain is a popular residency-by-investment program, commonly known as a Golden Visa program. Here are the most Frequently Asked Questions about the program.
1) Why Spain for a Golden Visa?
Spain is a destination that attracts individuals from all over the world. The quality of life it offers to its residents, combining a rich cultural heritage, affordable housing, good medical care, great location at the heart of Europe, and financial stability, means that it is more than just a popular tourist destination. We have recently seen a sharp increase in requests for Spanish Golden Visas, in particular from clients from the Philippines.
While there are other ways to become Spaniard (e.g. by evidencing your lineage, marriage and/or time), the Spanish residency-by-investment program (aka Spanish Golden Visa–in effect since 2013), in essence, grants a right to legally reside in Spain in exchange of an investment into a real estate property (or properties) worth a minimum of EUR 500,000. By extension, a Spanish Golden Visa holder (and all qualifying family members) may opt to work and study in Spain without the need to further secure an additional work or study permit. Another benefit of the Spanish Golden Visa is that it permits significant mobility within other Schengen countries for up to 3 months in any 6 months period.
The Spanish Golden Visa is notably popular in the Philippines since it provides a fast-track pathway to citizenship (and so a European passport) after only 2 years of residence in Spain under the Spanish Golden Visa. This is a significant advantage granted to Filipinos – whereas other nationals may have to wait 10 years for citizenship.
2) What are the advantages / disadvantages of getting a Spanish Golden Visa, compared to getting a Portugal Golden Visa?
The main factors which differentiate the Spanish Golden Visa and Portugal Golden Visa are residency requirements, options for investment and the citizenship path.
Portugal Golden Visa carries a residency requirement of a week per year. The Spanish Golden Visa does not set any minimum residency requirement.
The Spanish Golden Visa is mainly popular for its real estate investment option, whilst the Portugal Golden Visa on the other hand offers multiple options for potential investors.
So far, this choice of investment options has definitely played in favour of the Portugal Golden Visa. Most popular investment options in Portugal that our clients have shown interest in include:
- A minimum investment of EUR 350,000 into an SEC-approved investment fund;
- A minimum investment of EUR 350,000 into a qualifying real estate property dating more than 30 years to be refurbished – this option can be further reduced to EUR 280,000 under certain conditions;
- A minimum investment of EUR 500,000 into one or multiple real estate property(ies);
- A commitment of EUR 175,000 into an incubation program under the Start-up Visa program.
Path to Citizenship
As noted above, Filipinos (or other nationals from Andorra, Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Cuba, Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Portugal, Puerto Rico, Uruguay, and Venezuela) benefit from a fast-track pathway to Spanish citizenship as they apply for citizenship after only 2 years of residence in Spain – whereas it would take them 5 years of residence in Portugal to do so.
On the other hand, for individuals who are not nationals from one of the countries listed above, Spanish citizenship requires 10 years of residence in Spain, which is twice as long as what is required for Portuguese citizenship.
Once citizenship is secured, according to the latest data from IATA, Spain has a slight advantage regarding its passport strength since it currently provides visa-free access to 188 jurisdictions, while Portugal is at 186. In comparison, the Pilipinas Pasaporte currently provides visa-free access to less than 70 countries.
3) What are the major hurdles for a Spanish Golden Visa?
There is no hurdle in applying for the Spanish Golden Visa so to speak. However, there is a note to be made about the misconceptions on the differences between what the Spanish Golden Visa is, the path to citizenship, and the requirements (and potential impact) of becoming a Spaniard on one’s wealth situation.
The Spanish Golden Visa, as described above, is fairly straightforward and does not have residency, language nor test requirements. Renewing this Spanish Golden Visa – every 2-5 years – is simple and the fees for each renewal are minimal. As long as the applicant and family maintain the investment and continue to respect the initial requirements, the Spanish Golden Visa can be renewed.
The pathway to citizenship is a different story. To qualify for citizenship in Spain, one must speak Spanish and demonstrate a certain proficiency. This will further be ‘tested’ by sitting an examination on the Spanish culture and history – in Spanish.
For nationals from non-Spanish colonized countries, the former citizenship may need to be relinquished and the path to citizenship will likely be a 10-year journey. For Filipinos, that journey will take around 2-3 years while allowing the retention of the Filipino citizenship. Said journey, depending on each family, may also have tax circumstances given that Spain prevents applicants to be outside of Spain for a certain number of months per year.
4) What is the approximate total outlay for a successful Spanish Golden Visa?
There is no ‘one size fits all’ as the total outlay varies depending on the family composition, as well as the investment route chosen and the location.
As a tentative overview, the minimum investment being set at EUR 500,000, the investor should expect an additional EUR 50,000 to EUR 75,000 in various taxes and fees associated with the property as well as third-party disbursements such as government and application fees and of course, the professional legal fees.
Any applicant looking to explore the Spanish Golden Visa should look to invest an average of EUR 575,000 to EUR 600,000.
5) How long will the process take?
This vary depending on whether the applicant will (or can) visit Spain or not. An average processing time would be between 1-4 months. It is to note that at the moment, and in light with the pandemic, HLG is able to process all applications remotely. Indeed, all meetings with our counterpart in Spain, the selection and purchase of property, the completion of the Golden Visa application can be done remotely and through digital means with our firm.
6) Can everyone apply for a Spanish Golden Visa?
The program is restricted to non-EU/EEA nationals. Other grounds for inadmissibility include but is not limited to those with:
– past criminal convictions;
– have debts or any similar unpaid monies to the Spanish authorities e.g. unpaid taxes;
– have entered or stayed illegally in Spain.
A note should be made that Politically Exposed Persons (PEP) are not, prima facie, inadmissible for the Spanish Golden Visa program, but their eligibility will require a thorough and extensive legal assessment.
7) What happens to the Golden Visa if an investor wants to sell the property?
The Spanish Golden Visa is dependent on the property and therefore proper consideration should be given to an investor who wishes to sell the property before converting the residency permit into a permanent residency status in Spain – or becoming citizen. Once the investor attains either of those status, they may decide to dispose of the property without any impact on their immigrant status in Spain.
8) Would you recommend the Spanish Golden Visa to your clients?
The Spanish program remains generally a popular option. All our 25+ programs have their own set of pros and cons and our recommendation will depend on the needs and requirements of the applicants. It is our duty to understand the needs of the applicants and their family and advise what program(s) may be suitable based on their specific circumstances. Ultimately our role is to provide legal advices to the applicant to enable an informed decision to be made.
9) Why should I choose HLG to help apply for the Spanish Golden Visa?
Our professional duties are to the client and in our experience, we have seen many ‘consultants’, ‘advisors’ and other questionable individuals presenting the Golden Visa in Spain as an outright ‘Citizenship-by-Investment Program’ or as a ‘walk in the park’ process to get citizenship, which obviously is not a true representation of the program. Ultimately, failing to consider key factors, or hiring a non-professional, could result in unfortunate financial losses in addition to a potential immigration ban.
Each client should carefully consider the necessary due diligence on both the investment and the service provider, as well as seeking a professional opinion on the potential tax exposure in their current country of residency and Spain. As an international law firm with a global footprint, HLG carries out the necessary due diligence and manages the whole process from the start to finish.
HARVEY LAW GROUP
Mr. Samuel Harvey – LL.L.