Becoming a Resident in Spain

On September 19, 2013 Congress finally approved the law which regulates the possibility of obtaining Spanish residence through certain investments.

How to prove the investment

1. In the case of investment in government bonds, corporate or bank deposits, this can be proved by means of certificates from the competent authorities or banks, which should be issued in a period not exceeding 60 days prior to the application.
2. In the case of property, this can be proved by means of a certification from the Land Registry Office. At the time of the application it would be necessary to have signed the acquisition (Title Deed) before a Notary Public, even if this has not yet been registered in the property registry office. This implies having already paid the purchase price, of at least, up to 500,000 € net.

Visa and residence permit

The visa obtained gives the right to reside in Spain for one year and entitles you to apply for a residence permit for TWO YEARS, fulfilling the following requirements:

1. Having a valid visa or to be within the first 90 days following its expiry date.
2. Having travelled to Spain at least once in that period.
3. Having kept the investments previously made, which shall be supported by means of certificates as required by law.

If the above requirements are maintained the residence permit can be renewed for a further TWO YEARS.

The law does not specify whether there are possibilities for subsequent renewals, however it is reasonable to think so, provided that the initial investments is maintained. In fact the law refers to “renewal periods of two years”, in plural.

It is possible to include the spouse and children (MINORS) in the application; alternatively they can be included afterwards.

General requirements which should also be considered

The applicant must also fulfil the following requirements:

1. Not be residing illegally within Spanish territory.
2. Be 18 years or older.
3. Not have any criminal records in Spain or in any other country of previous residence.
4. Not have entrance prohibited in Spain or the territorial space of other countries with which Spain has signed an agreement to that effect.
5. Have a public or private health insurance policy in place with an Insurance company duly authorized to operate in Spain.
6. Have sufficient financial means to meet their living expenses and return costs for themselves and their family during the period of time for which they wish to reside in Spain.
7. Have paid the legally established fee.

Tax aspects

The big question that arises is the treatment which these residents will receive in terms of taxes. In general terms it must be considered that a resident is liable to pay income tax on profits earned worldwide.

This may not be of interest to investors who, for various reasons, are seeking residency in Spain but do not want to pay taxes in this country based on their worldwide income.