The Spanish “Golden Visa” Program contained in Law 14/2013, of September 27, to support entrepreneurs and their internationalization, and in particular in its Sections 61-67 and 75-76, has not stopped attracting foreign investors since its inception. According to it, foreigners that are not residents in Spain, but want to obtain this status, have to be ready to make in investment that, in the case of the real state sector, has to be equal to or greater than 500,000 euros. Many of them have taken advantage of this opportunity and as a result of it, the Spanish Government, over the last 10 years, has granted 14,576 “Golden Visas” to foreigners from numerous countries, mainly European, Latin American or Asian, for investments superior to more than 10 billion euros.
Requirements for Obtaining a “Golden Visa” in Spain
For the residence authorization to be obtained, the investor must comply with various requirements, such as, for example, with regard the abovementioned investment, certificates of ownership, of the amount paid and of the property encumbrances. In addition to these documents, there are others that must be provided as well, otherwise the application would be incompleted: a legible copy of all pages of the passport, a proof of the investor economic resources for his maintenance and that of his family, a public or private medical insurance entered into with an entity authorized to operate in Spain, a certificate of criminal record and, in case the investor is accompanied by his family -wife and/or children under 18 years of age- a proof of the family relationship, duly legalized and translated into Spanish by an official translator.
Benefits and Conditions of the “Golden Visa” Residency
The residence authorization has associated the benefits of a period of residence of 2 years, renewable for periods of 5 years, provided that the investment conditions are maintained; the right to work, both for the investor and his relatives, on their own account or as employees and the reunification of the investor with his wife and/or children under 18 years of age. If we take into account the compliance with these requirements, and as a consequence of it the number of visas granted and the money invested so far, according to the figures mentioned above, it is undeniable that the Spanish “Golden Visa” Program has been a complete success. That is why it is striking that the President of the Spanish Government has announced a few days ago, in a somewhat surprising way, the end of these type of visas.
Success and Controversy Surrounding the Spanish “Golden Visa” Program
Strange as it may seem, the reason for supressing them is not, as might be assumed, the failure of the Spanish “Golden Visa” Program, but on the contrary its success, excessive in the Spanish Government opinion. The Government, ignoring that these investments represent an average investment of 951,203 euros, well above the half a million required, and that the properties sold under this Program only constituted 0,1% of the homes sold in Spain during these last 10 years, considers that these investments stress prices. So, in a dramatic change of position, it encourages the foreign investor to invest, not in this kind of housing, but in a social one, with a more affordable price, despite the fact that the analysts, contradicting this opinion, estimate that the problem is not this type of visas, but the lack of supply.
Critiques and Responses to the Program Changes
As it was easy to be foreseen, this announcement I am referring to has been the subject of numerous criticisms by Spanish business associations, regional governments and specialized analysts. Thus, José Luis Bonet, President of the Chamber of Spain, has described this announcement as “a demagogic gesture”; Carolina España, Finance Minister of the Andalusian Government, has stated that ” it penalizes and scares away investment and it closes a path for job creation”; and Iñaki Unsain, of the real state consulting company AGV Gestion, has said that “the only thing it will achieve is a decline in foreign investment in Spain”. Unlike other migratory flows, these, as Lorezo Bernaldo de Quirós rigthly points out, “contribute more than they receive”.
Analyzing the Impact on Foreign Investments
In these circumstances what should be done?. Firstly, wait for this announcement to become a legal precept, since for now it is nothing more than a mere political statement. Secondly, when this statement becomes a legal provision and enters into force, analyze its scope and contents, in particular its impact on future “Golden Visa” applications associated with a real estate investment, and above all on those that are already in process. Thirdly, verify if this legislative reform will affect all the Spanish “Golden Visa” Program applications, or only, as it seems to be deducted from the words of the Spanish President of Government, to those “Golden Visa” I am referring to. How long will it take? I believe that this is very much conditioned by the political climate of the different electoral calls in progress.
Next Steps and Considerations for Visa Applicants
I agree with those who criticize this change of course by the Spanish Government, a change of course that is in striking contradiction with the attempts to attract foreign investments. Having said that, I hope that this change is limited, in any case, the Spanish “Golden Visa” Program applications associated with a real estate investment, and does not extend to “Golden Visa” applications associated with the acquisition of public debt and significant participations in Spanish companies, or with the financing of projects of general interest. If this extension does not occur, foreign investors at least will be able to obtain “Golden Visas”, and with them the residence in Spanish territory, through these applications. I will be attentive to it in order to be able to inform the readers of this Post accordingly. For more information, please refer to our guide “Golden Visa and Property Guide for Spain.”
Antonio Viñal
Lawyer
AVCO Legal
madrid@avco.legal
