The called Act for Entrepreneurs is already in effect. It was approved by the Spanish Parliament and published in the Official Gazette. This law has been prepared to encourage and facilitate the creation and growth of companies and their international development as a necessary engine for the economic recovery of the country.
The law has many new features but we will focus on the aspects we consider most relevant for foreign investors in Spain, and among them the ability to access a residency visa or residency permit for those who make significant investments in the country.
Who is eligible to get a residency visa or permit?
First of all, the basic requirements imposed by law are:
- Not to be illegally in the country.
- To be at least 18 years old.
- To have no criminal record in Spain nor in the countries of residence in the last five years.
- To have a health insurance (with a company that legally operates in Spain)
- To have sufficient financial means to support the applicant and his/her family during their stay in Spain.
- To pay a fee for the residency visa or residency permit.
Well, it seems clear that these visas or permits do not apply to citizens of member states of the European Union, which already have the right of free movement and residence for a period up to three months and that could get registered as EU resident citizens by proving that they have either a work or means to survive in Spain, which would entitle them to use public services (schools, healthcare, etc).
It is also very apparent that this visa or permit has not been thought to help the non EU citizens that apply for residency through the normal channels, basically all those that cannot invest “significantly” in the country’s battered economy.
Therefore it seems that this new way to obtain a residency visa or permit would benefit only those investors from a non EU country that are willing and able to invest in Spain … significantly.
I bet that at this point you are already asking yourself: ¿What is the exact meaning that the adjective “significant” has for the Spanish Government? The law clarifies that question in article 63:
- An initial investment starting from 2,000,000 Euros on Spanish Government bonds.
- An initial investment of at least 1,000,000 Euros in stocks or shares of Spanish companies.
- An initial investment of 1,000,000 Euros deposited in Spain with any Spanish bank.
- The acquisition of real estate in Spain for a value of at least 500,000 Euros for each applicant. The investment of this amount must be free of liens and encumbrances, so the investment that exceeds that required amount may be subject to liens or encumbrances. That is, if a non-EU citizen wishes to acquire the residency visa or residency permit through this course and to that effect he/she acquires a property valued at 1,000,000 Euros, the charges or encumbrances on such property shall not exceed half a million Euros.
- A business project to be carried out in Spain and considered of general public interest because it involves the creation of jobs (read many); socioeconomic impact in the geographical area where the activity will take place (read great); or significant contribution to scientific or technological innovation (read profitable).
All these cases are also applicable to investment done by a foreign company, providing it is not domiciled in a tax haven and the applicant (individual) for the residency visa or permit holds, directly or indirectly, the majority of the voting rights and has the power to appoint or remove the majority of the members of its board. That is what you would normally call the owner.
In short, the target that the Spanish Government seems to be looking for is a non EU adult citizen, with no criminal records, with a health insurance, not staying illegally in Spain but wishing to reside here and that is prepared to spend no less than half a million Euros, plus investment expenses and maintenance costs over his/her stay in Spain.
What types of residency are granted?
The law distinguish between:
- Residency visa for investors. It enables the applicant to stay as a resident in Spain for a year and it is the first that needs to be requested. The law does not seem to request that they actually spend time in the country.
- Residency permit for investors. It enables the applicant to stay as a resident in the country for a period of up to two years and can only be requested if you have previously obtained a residency visa for one year. This residency permit can be renewed for another two years.
To apply for a residency permit the applicant must meet the following requirements:
- To be the holder of a valid residency visa for investors, or one that is not overdue for more than 90 calendar days.
- To have travelled to Spain at least once during the allowed residency period. Yes. It seems that you only need to travel here. Law does not specify the length of the visit, so theoretically one day visit might be sufficient.
- To accredit that your investment is still around.
- To be up to date in the fulfillment of tax obligations and Social Security payments.
So if you are within the desired target, it is obvious that the Government does not bother too much about how many days you will finally spent here as long as you invest “significant” amounts in the country and keep them for the time of your allowed residency. Actually, there seems to be nothing that prevents you from getting five years of residency by visiting the country three times over that period. And guess what! The fact that you might stay in the country for shorter periods than six months in a year does not jeopardize the possibility of getting the long term residency or even nationality once the terms are met.
When and how do I submit the application and what are the deadlines for the granting of the residency visa or permit?
It is important to note that the investment must have been made within two months prior to the date when the application for residency visa was submitted. If the investment was made earlier it will not have the effects provided in the law.
Applications for residency visas need to be submitted to the Embassies and Consulates of Spain in the demarcation of the applicant. They shall be resolved and notified within 10 working days, except in certain cases according to EU Visa Code.
Applications for residence permits need to be submitted to the General Migration Department of the Government. They shall be resolved and notified within 20 days from the presentation, and they will be consider estimated by “administrative silence” after such period if there is no official reply.
Luis M. Vicente Burgos
VICENTE & OTAOLAURRUCHI LAWYERS
