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 the 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.
Only certain types of investment are included in this group. Those would be the following:
(1) Real Estate investments of 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.
(2) Investments in Spanish Public Debt or in Spanish companies.
When investing on Spanish Public Debt, the minimum amount is 2,000,000.00 EUR; when investing on shares of Spanish Companies, the minimum amount is 1,000,000.00 EUR.
(3) Investment in Projects that could be considered of public interest.
It can also serve to the purposes of becoming resident, the fact of making an investment through a company –that cannot be incorporated in a tax haven-, where the applicant holds the majority of voting rights, and has the power нto appoint the majority of members of the Board of Directors.
Residency application may be filed retroactively, with the exception of the application after Public Debt investment, as here there is a deadline of 60 days.
The residence permit obtained by this via would be valid for one year at least, and the process would be significantly faster than the traditional one. In fact, they foresee that the new permits will be issued in ten days, and it will not be required obtaining the Foreigners Identification Number (NIE).
For renewing and extending this residency –every two years-, the requirement will be that the person is under the same circumstances as when obtaining residency on the first place. Please note that the investor is expected to have travelled to Spain at least once during the first year of residency.
Applicants will also need to meet all other requirements for becoming resident, i.e. hold a public or private health insurance, have sufficient resources for themselves and their family members, and showing a clean criminal record.
