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How Spain plans to toughen conditions for its golden visa

The Spanish government is considering changing its golden visa scheme, meaning that those who want to invest in property here may have to pay up more or have a limited time in which to do so.

Published: 8 May 2023 17:08 CEST
Updated: 14 May 2023 09:12 CEST
How Spain plans to toughen conditions for its golden visa
Spain is considering change the conditions of its golden visa to make it tougher. Photo: Pascal Habermann / Unsplash

Spain offers non-EU citizens various visas and residency permits, many of which require applicants meet certain conditions and plenty of paperwork.

If applicants can afford it, one of the ‘easiest’ to obtain Spanish residency is through investment in property and the so-called golden visa.

This allows you to live in Spain if you spend €500,000 on a Spanish property (properties), or invest a €1 million in shares in Spanish companies, or invest €2 million in government bonds, or transfer €1 million to a Spanish bank account. 

The golden visa’s €500,000 property option is the most popular of all of these as a means of obtaining a residence permit for a period of three years, extendable for another two.

But now the Spanish Ministry of Inclusion, Social Security and Migration is considering making the conditions for this type of visa even tougher.

The objective is to raise the bar, sources from the ministry headed up by José Luis Escrivá confirmed.

READ ALSO: Portugal and Ireland have scrapped their golden visas. Will Spain be next?

Real estate experts and lawmakers believe that the €500,000 threshold is now insufficient, especially in Spain’s main cities, where many homes cost this amount, and therefore half a million can no longer be considered a price tag for luxury properties. Furthermore, they believe that these visas only end up driving up prices and kicking residents out of their neighbourhoods.

The Ministry of Social Security is due to hold talks with the Ministry of Economic Affairs and the Ministry of Transport, which will decide the ultimate fate of these visas, whether it’s to define the new scheme, up the investment amount or phase them out completely.  

The increased figure mentioned in the Spanish press is an investment in property of €1 million, twice what it is currently.

A spokesperson for the Ministry of Economic Affairs is quoted in El País as saying that they are willing to address the matter, but insists that currently nothing has changed. 

According the head of Spain’s Mas País political party, Íñigo Errejón, the golden visa encourages “speculation” of housing prices in Spain, it does not benefit the national economy and “expels the local population”, generating a “very negative” chain effect on the housing market. 

Back in February, his party lodged a legal proposal at the Spanish Parliament calling for Spain’s golden visa scheme to be scrapped and many have been in favour of this. 

The mayor of Barcelona, Ada Colau, is firmly against the existence of Spain’s golden visa as well, stating that “it’s elitism, classism and racism”. 

In recent years, more and more foreigners have decided to invest in property in Spain rather than financial or corporate investment options, which have remained practically unused.

Spain granted 2,462 residence permits in 2022 to golden visa investors who bought properties for more than half a million, which represented an increase of almost 60 percent since the previous year.

Only a few dozen visas were given out to investors who used other channels, such as the purchase of public debt, investment in companies or deposits of more than one million euros. For example, last year, only six foreigners applied for residence permits for investing in public debt.  

Since Spain’s golden visas came into force, 11,464 have been granted, along with another 19,805 authorisations for family reunification.  

In recent months, Portugal, Ireland, Greece and Malta have all either scrapped the equivalent of their golden visas or made the conditions much harder for millionaires who want to make a real estate investment.

These decisions come after years of warnings by the EU that such foreign investment residency deals were a risk to security, transparency and the bloc’s values. The European Commission also asked EU partners to stop granting them a few months ago.

This has been highlighted by the joint ban of golden visa applications by Russian tycoons looking to flee to Europe following their government’s invasion of Ukraine. 

The golden visas were originally approved by Mariano Rajoy’s government in 2013 through the entrepreneurs’ law, at a time when the Spanish real estate sector was in trouble and many foreign investors were leaving the country.

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VISAS

EXPLAINED: When you can exchange visas in Spain

There are several different types of visas and residency permits you can get to be able to live and work in Spain, but what happens when your situation changes and you want to exchange your visa for a different one?

Published: 30 April 2024 14:20 CEST
EXPLAINED: When you can exchange visas in Spain

There are many different reasons you may want to exchange the type of visa or residency permit you have. Perhaps you’re on a student visa and have completed your studies, but still want to be able to stay in Spain. Or maybe you’ve been on a one-year non-lucrative visa, but can no longer afford not to work and want to exchange it for one where you’re allowed to work. 

Read on to find out which visas are possible to exchange and which are not. 

Student Visa to Digital Nomad Visa 

The simple answer is yes, it is possible to exchange your student visa for the new Digital Nomad Visa (DNV) that first became available last year. This will, however, depend on your individual circumstances and what job you plan on doing.

Firstly, in order to apply for DNV you must either have a degree from the field you want to work remotely in or have three years’ work experience in that industry. If you’ve just finished your studies this could be possible, but if you were studying something different, it could prove difficult.

If you are an older student, you could definitely have three years’ work experience in the industry you want to work in or you may have gained the experience working part-time in Spain while on your student visa.

Secondly, you must make sure you have worked for the company that hired you for a remote role for a minimum of three months before you apply for the DNV. The main caveat is that the company has to be registered outside of Spain as you are not eligible for the DNV if more than 20 percent of your income comes from inside Spain. This means that you will have to secure a remote job in another country while still on your student visa, making sure that you stick to the 30 hours a week you’re allowed to work.

Non-Lucrative Visa to Work Permit or Self-Employed

Being in Spain on the Non-Lucrative Visa or NLV can prove to be expensive because you’re not allowed to work, but have to prove you have a significant amount of savings or passive income. If you want to stay in Spain, beyond the initial year, you may be considering a different residency permit. Luckily, you can exchange it for a work permit or self-employed permit in a process called residence modification.

During your last few months on the non-lucrative visa, you are able to apply for jobs in Spain, which may give you the possibility of being granted a work permit. There are many prerequisites, including having lived in Spain for a year and being offered a pre-employment contract.

You could also decide to become self-employed at set up your own business. In order to do this you will need to meet the requirements that current legislation requires for opening and operating your chosen business. You will also need to sign up to the autónomo system, pay your own social security fees and submit your taxes five times a year.

READ ALSO: Should I change my non-lucrative visa for another residency permit in Spain?

Student Visa to Work Permit or Self-Employed

If you’re living in Spain on a student visa, then it’s relatively straightforward to exchange it for a work permit or become self-employed, if you want to be able to stay longer. The main requirement is that you have to have lived in Spain for three consecutive years, before you exchange it. This means, it’s really only possible for those who are doing a long-term course, such as a degree at a Spanish university. If you’re simply here for a year doing a language course, then it won’t be possible.

If you have been here for three years on a student visa, you have two options – the first is to find a job and become an employee by getting a work permit and the second is to become self-employed. If you opt for the first, the easiest way is to get a job offer and apply for the permit that way. Because you’ve already had a student visa and been here three years, it will be easier for companies to hire you as they won’t have to prove that there isn’t anyone from Spain or the EU that can do it first or that they have a shortage of professionals who can carry it out.

If you want to exchange it for a self-employment permit, you will have to present a business plan in order to get approval and prove you have the correct qualifications and experience to carry it out. If approved, then you will typically sign up to the autónomo system.

Student Visa to Entrepreneur Visa

Student visas are the easiest visas to modify in Spain, meaning you have many different options to exchange them if you want to stay longer. The Entrepreneur Visa – Visado de Emprendedor is another option that will allow you to stay for a period of three years (with the option of exchanging or extending). It is, however, slightly more complicated to exchange to than simply getting a work permit or becoming self-employed.

The Entrepreneur Visa is especially for those who want to set up a business considered to be innovative with a special economic interest for Spain. Unlike becoming just an autónomo, you must agree to be able to create employment opportunities for locals in the future. You could also in theory exchange your NLV for an entrepreneur visa too, provided you can prove that you haven’t done any work while you’ve been living in Spain for the year on your NLV.

Non-Lucrative Visa to Digital Nomad Visa

Unfortunately, this exchange is not possible. The main issue is that you’re not allowed to work while on a NLV and the requisites of the DNV are that you must have worked for the company that hired you for a remote role (or your clients if you’re self-employed) for a minimum of three months before you apply.

If this is the case then you’ll be admitting that you were working while on your NLV, which could get you into trouble. This means will have violated the terms of your visa and will be highly unlikely to be granted another one. You may also face penalties and fines, depending on your circumstances.

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