Spain’s Golden Visa has one of the fastest processing times in the investment migration world yet rarely flaunts its unique advantages to potential high net worth individuals.
Should investors reconsider the Spanish Golden Visa option, especially during these tumultuous times across the world?
Why should the Spanish Golden Visa be considered?
The Spanish Residence Permit (Golden Visa) allows investors and their dependents to reside in Spain by investing at least EUR 500,000. The most common options are real estate, though there are other ways to obtain the Spanish Golden Visa. The applicant may invest:
- EUR 500,000 in real estate
- EUR 2,000,000 in treasury bonds issued by Spanish government
- EUR 1,000,000 in a Spanish company
- EUR 1,000,000 in investment funds
- EUR 1,000,000 in Spanish bank deposit
Whilst investment in either of these options is permissible, the most popular route is still real estate.
The investment can be done in person or by virtue of a power of attorney. Once the investment has been made and the completed file and application submitted, it takes under a month for the Spanish government to process and decline/approve the application. The applicant and dependents must then travel to Spain to submit biometrics. They subsequently obtain a residency permit for which can be renewed (remotely/in person) for so long as the qualifying investment is still held.
Does the Spanish Golden Visa lead to a second passport?
Yes, through naturalization and subject to meeting physical residence criteria.
Unlike the Portuguese Golden Visa, where a residency permit leads onto a second citizenship without the investor having to reside in-country/relocate for a certain number of years, Spain does require physical presence for 10 years without substantial time abroad during this time, in order to qualify for citizenship.
Spain – A Remarkable Golden Visa Solution
In comparison to other jurisdictions, Spain has a tremendously fast processing period of 20 days from file submission until the residency permit is issued. It grants the holder visa free travel throughout the Schengen area for up to 90 days and the right (though not obligatory) to live, work and engage in business in Spain.
In contrast to other investment migration programmes, no government donation is necessary in Spain. In Malta for example, the permanent residency program (MIRP) requires a donation of EUR 30,000 (non-refundable) to be made to the State of Malta, EUR 250,000 in government bonds (these can be sold in future) and a Maltese property investment of approximately EUR 320,000.
Legal and application fees for the Spanish golden visa are also considerably lower than those in Malta, Portugal and to some extent Greece, all popular Golden Visa jurisdictions in Europe.
Regardless of all its merits, Spain’s Golden Visa is not aggressively marketed to high-net-worth individuals, in stark contrast to its Iberian neighbour, Portugal. But for those looking for an affordably priced residency permit in Europe and a place in the sun, Spain’s golden visa should certainly be considered.
Read more: Routes to the Spanish Golden Visa
What to expect in Spain’s real estate market?
By late February 2020, Spain was already ‘at war’ with Covid-19. Madrid was severely battered by the virus and the number of daily cases and deaths grew exponentially.
We are now entering the summer months and the dust begins to settle.
As illustrated by the worldometer graph below, Spain’s epidemiological situation is showing promising signs of improvement and containment. Not only new cases, but daily deaths have been markedly falling throughout the country as the country gradually eases lockdowns and starts to resume economic activity in all sectors, including construction.
At the end of Q1, the RICS (Royal Institute of Chartered Surveyors) assessed the industry’s sentiment towards real estate markets including Spain’s and identified that the current sentiment had deteriorated (-17 in Q1 2020 vs 15 in Q4 2019).
So, whilst we don’t yet know what impact the pandemic will have on the price of real estate for those investors who have funds available, a long-term plan of 5-10 years and the ability to source a deal in the Spanish real estate market, it could be an opportunity.
Spain’s Golden Visa in a Post Covid-19 World
European golden visas offer a slower but more affordable route to a second passport than citizenship investment programmes such as the Malta Individual Investor Programme or Cyprus Investment Programme, which require an outlay of approximately EUR 1,000,000 and EUR 2,000,000 respectively. Once secured, citizens of EU nations have the right to live, work and do business in any member state.
Up until now, not having to migrate or physically relocate to the host nation in order to obtain a second passport, was a selling point for various investment migration programmes, predominantly Portugal. Applicants sought an attractively priced global mobility solution with the least disturbance to their status quo.
The ‘pot of gold at the end of the rainbow’, a seamless path to a second EU citizenship.
But 2020 has brought with it, massive change and upheaval and as a result we expect demands and priorities too will change.
At a time where Hong Kong’s protesters are feeling evermore quashed by the Chinese government, the US is suffering historic civil unrest, Europe is mourning its dead and markets are suffering the economic fallout of a global pandemic – relocating to new pastures is no longer off the cards for many affluent families.
Quite on the contrary, economic migration is now front-of mind for many high net worth individuals across the globe.
If this time of upheaval has brought anything bubbling up to the surface of society, it is the importance, or privilege of having options. Options for a safer location to call home, options to safeguard one’s wealth and options to exit, relocate, re-start whether temporarily, as a Plan B, or as a new beginning are quintessential.
For those affluent investors who seek a European residency permit in a timely manner, who seek a high quality of life for their families Spain’s Golden visa, with all its merits should certainly be on the table. Will the pandemic result in the investment threshold falling to less than EUR 500,000? We’ll keep you posted.
