SPAIN’S GOLDEN VISA

By Cathal Rochford,

The benefits of Spain’s ‘Golden Visa’

While Spain’s Non-Lucrative Visa and Residency Permit works very well for retirees, you need to spend around 183+ days a year in Spain to maintain it. This is not a problem if you are making a home in Spain, but if you do not intend to live here full time, the Golden Visa may be an option.

EU nationals have no restrictions on the number of days they can spend here each year, but UK and other third-party visitors need to carefully follow the ’90-day rule’.

Resident permits generally commit you to spending six months of the year in Spain and being tax resident here (so liable to Spanish taxation on your worldwide income, gains and wealth and subject to the local succession regime). This is not suitable for holiday homeowners and often does not work for those who divide their time between Spain and the UK either.

The 90-day rule

If you are not an EU national and do not have an official Spanish residence permit, you are limited to spending 90 days in Spain in any rolling 180day period without a visa.

This 90-day limit applies across the EU Schengen zone, so you cannot pause or reset your days by spending time in another member country. Once you have used up your allowance you will not be permitted to enter another Schengen country until you have spent enough time outside the area.

Anyone caught overstaying could risk deportation, fines and a record in their passport that can complicate future travel and visa applications.

If you want to spend more time in Spain, you have two general options: apply in advance for a visa for each extended stay or apply for a residence permit.

The Golden Visa and Golden Residency Permit offer a more flexible residence option for third-country nationals who can make a substantial capital investment in Spain. There are virtually no limits to how little or long you spend in Spain. These resident permits provide the freedom to come and go as you wish without having to become fully resident.

There are two options:

1. Spanish Golden Visa, which you apply for at the Spanish Consulate in the UK before moving.

2. Spanish Golden Residency Permit, obtained through the Large Business and Strategic Groups Unit in Spain.

Golden visa requirements

Both options require you to make significant qualifying investment in Spain, which can be one of the following:

• Buy Spanish property worth at least €500,000 (as at July 2023). If you already own one, it will count if acquired after September 2013. You can purchase a second property to make up the €500,000 minimum if necessary.

• Buy shares in a Spanish company or make a deposit in a Spanish bank, both with a €1 million minimum, or purchase at least €2 million in Spanish Treasury securities.

• Invest in a new business that offers employment opportunities or other significant local benefits.

You then need to satisfy certain requirements. This includes:

• Proof of financial means. You need to demonstrate that you can meet the minimum income requirement (4 x the Indicador Público de Renta de Efectos Múltiples (IPREM), so in 2023 this is €28,800 for an individual or €36,000 for a couple), or roughly double this deposited in a Spanish bank to support yourself and any dependants.

• Suitable medical health insurance from an approved insurer.

• Medical record check from an authorised doctor no more than 90 days old.

• Clean police records.

• No ban on entry into Spain or have been found to be there illegally.

Validity

The Golden Visa is initially valid for one year and the Golden Residence Permit for two. Renewals can then be made for successive five-year periods. You must reconfirm sufficient financial means and healthcare insurance at each renewal if you are residing in Spain.

If, after five years, you have lived in Spain for at least six months a year in each of these five years, you can apply for a permanent residence permit, valid for 10 years.

So, if you are still working in the UK but intend to relocate to Spain when you retire in a few years and wish to enjoy long periods in Spain between now and then, you could buy your (qualifying) Spanish property now, apply for a Golden Visa to avoid the 90-day rule, then make your move permanent once you retire.

Future of the Golden Visa?

These are the rules at the of writing (15 July 2023). Following scrutiny of these ‘golden visa’ schemes in various countries, there have been reports that the Spanish government is debating whether to increase the minimum property value (reportedly to €1 million) or perhaps even abolish this visa completely.

For now, this remains speculation and you still apply for a golden visa as outlined above.

A note on tax residency

While golden visa holders do not need to worry about the 90-day rule, you do need to pay attention to the number of days you spend in Spain and how strong your ties are here, so that you know whether you meet the tax residence criteria or not.

In summary, you are considered resident in Spain for tax purposes if any of these apply to you:

1. You spend more than 183 days in Spain in a calendar year, or

2. Your ‘centre of economic interests’ is in Spain, or

3. Your ‘centre of vital interests’ is in Spain (i.e. if your spouse lives here).

If you meet any of these criteria, you will benefit from planning ahead. A Spain based adviser with cross-border expertise on both taxation and residence is best placed to help you meet your obligations in the most tax-efficient way and take advantage of suitable opportunities in Spain.

This is a summary so take personalised advice. All information is based on our understanding of legislation and taxation practice at the time of writing; this may change in the future.