10 GREAT REASONS TO INVEST IN SPAIN

Is Spain back? Based on the current economic data it seems like it. So if you're thinking about the destination of your next investment why not take a few minutes to consider Spain? Here are 10 great reasons to do so.

Company incorporation

1.- No share capital needed;

2.- Minimum number of shareholders and directors is one.

3.- Attractive public grants in qualifying regions.

Tax reasons

1.- Newly incorporated smes benefit from a reduced rate of 15% on the first € 300,000 of tax base and just 20% thereafter during their first 2 years with positive tax base;

2.- The non-habitual residency scheme allows new fiscal residents to be taxed at a flat rate of just 24.75%.

Hot property market

1.- Low prices on attractive property make for great deals;

2.- Investor/ golden visa opportunity for foreign investors who buy property for just € 500,000.

Investment hub

1.- Easier access to hot Spanish-speaking markets such as Mexico, Colombia, Peru or Chile;

2.- 101 signed double taxation treaties, with 88 of them in force.

3.- Easy and effective holding company scheme.

INVESTOR VISA IN SPAIN (and III)

On our last post on the Spanish investor’s visa we had briefly touched on the subject of citizenship. It is worth noting that there is a draft law in the works that will render a minimum knowledge of Spanish compulsory.

Another important issue regards the need for a visa or not to enter Spain. EEE countries plus Andorra just need their ID cards. The following countries need a passport valid for 3 months after the end of the traveller’s stay (maximum stay is 90 days):

Albania, Antigua and Barbuda, Algeria, Argentina, Australia, Azerbaijan, Bahamas, Barbados, Bermudas, Bolivia, Bosnia-Herzegovina, Brazil, Brunei, Canada, Chile, Colombia, Costa Rica, Croatia, Egypt, El Salvador, Ecuador, Georgia, Guatemala, Honduras, Israel, Japan, Kazakhstan, Kuwait, Macedonia, Malaysia, Mauritania, Mauritius, Mexico, Moldova, Monaco, Montenegro, Morocco, New Zealand, Nicaragua, Panama, Paraguay, Peru, Philippines, Russia, Saint Christopher and Nevis, Senegal, Serbia, Seychelles, Singapore, South Africa, South Korea, Taiwan, Thailand, Tunisia, Turkey, Ukraine, United Arab Emirates, United States, Uruguay, Vatican, Venezuela, Vietnam, as well as Hong Kong and Macao. (This list may be subject to changes)

On a final note, reunification is possible and the following family members are eligible for reunification: spouse or de facto partner; children under legal age (18); sponsor’s parents (if they are over 65 years old) and spouse’s parents (if they depend economically on the sponsor): minors and disabled under the sponsor’s custody.

As regards the reunification of the spouse’s parents, evidence must be produced to prove that the parents do not have the financial resources to support themselves.

INVESTOR VISA IN SPAIN (II)

The Spanish investor’s visa is valid, initially, for one year. The investor can apply thereafter for a residence permit, which is valid for 2 years and renewable for 2-year periods. Applicants that want to keep their residence after the initial term must travel at least once to Spain.

In order to obtain or renew the permit, the applicant must fulfil the initial conditions when the visa was issued: ie, maintain an investment of € 1 or € 2 million; be the owner of real estate valued at € 500,000; maintain the investment project free of debts before the Internal Revenue Service and Social Security and obtain a favourable report form the Directorate General of Trade and Investment.

Finally, as a general rule, after a ten-year residence period residents can apply for Spanish citizenship. Citizens from Latin-American countries, Andorra, Equatorial Guinea, Philippines, Portugal and of Sephardic origin just need a two-year residence period.

INVESTOR VISA IN SPAIN (I)

The Entrepreneurship Act was finally passed last September 28^th. Non-EU/ EEA citizens may now apply for an investor visa in Spain if they meet one of the following requirements:

1.- Buy real estate with a minimum value of € 500,000 (the first € 500,000 must be free of liens);

2.- Invest € 2 million in Spanish bonds;

3.- Invest € 1 million in shares of Spanish companies;

4.- Deposit € 1 million in a bank account;

5.- Undertake a business project of general interest to be executed in Spain. This project must meet at least one of the following conditions:

- Creation of jobs;

- Investment of socioeconomic impact in the region where it will be executed;

- Relevant contribution to scientific and/ or technological innovation.

The project must also receive the approval of the Spanish Economic and Trade Office nearest to the applicant in the form of a favourable report.

It is worth noting that the investment can also be executed through a company if the applicant holds the majority of voting rights. Finally, the investor visa allows for an initial residency of a 1 year period. 

INVESTOR VISA IN SPAIN

According to the draft Entrepreneurship Act, non-EEA citizens may apply for an investor visa in Spain if they meet one of the following requirements:

1.- Buy real estate with a minimum value of € 500,000 (the first € 500,000 must be free of liens);

2.- Invest € 2 million in Spanish bonds;

3.- Invest € 1 million in shares of Spanish companies;

4.- Deposit € 1 million in a bank account;

5.- Undertake a business project of general interest to be executed in Spain. This project must meet at least one of the following conditions:

- Creation of jobs (the draft does not specify how many);

- Investment of socioeconomic impact in the region where it will be executed;

- Relevant contribution to scientific and/ or technological innovation.

The investor visa allows for an initial residency of a 1 year period; visa holders can then apply for a residence permit which allows for a 2 year period stay. 

NO SPANISH PROPERTY TRANSFER TAX WHEN BUYING A COMPANY

The Spanish Fraud Act (Law 7/2012, of October 29) has amended the Securities Exchange Act in order to exempt the acquisition of companies that hold real estate from property transfer tax. However, such exemption is only applicable when the company's real estate is allocated to its business e.g., hotel or mining activities, hospitals, solar or wind farms... This would represent savings of 7%-10% in any acquisition as per above. On the other hand, any purely speculative operations would be subject to property transfer tax.

For more information please contact our Madrid office.