This article was published in the ABA Journal, Section Inmigration & Naturalization, click here to see the pdf
On September 19, 2013, the Spanish Government finally approved the Law to Support the Entrepreneur and Internationalization (the Law).
Those foreign nationals who invest in Spain by complying with certain established legal requirements can now achieve residence in our country. The Law introduces visas of periods of stay and residence for foreign investors, such as the authorization of residence (for a period of two years, open to renewal).
To benefit from this Law, foreign investors in Spain will have to carry out any of the following investments:
- Acquiring shares of Spanish companies in an amount greater than 1,000,000€;
- Purchasing Spanish Government bonds in an amount greater than 2,000,000€;
- Creation of business projects of general interest;
- Purchasing of buildings of a value greater than 500,000€.
The families of those foreign nationals interested in any of the above investments may also request residence authorization: both the spouse and minor children of the investing foreign national can request residence. The request for children, presented with the request for residence of the foreign investor, will benefit those children under 18 years of age or those children over 18 years of age who can objectively demonstrate that they cannot care for their own needs because of health reasons.
For your interest, we will focus this article succinctly on the investments referred to in points (3) and (4), and especially in (4).
Creation of business projects of general interest
These projects must be of an innovative character and of economic interest to Spain, according to a report from the Economic and Commercial Office of the geographic region for where the foreign investor presents the visa application.
The report will positively evaluate these factors, among others:
- The creation of jobs
- The carrying out of an investment with relevant socioeconomic impact
- The relevant contributions to scientific or technological innovation
The Law does not require that these projects reach a minimum quantity of investment; however, the innovation and economic interest of Spain factors are more subjective requirements.
Purchasing of buildings of a value greater than 500,000€
The foreign investor will accredit availability to an investment of 500,000€ free of liens or encumbrances, yet with the ability to become subject to liens or encumbrances (value exceeding the 500,000€ amount). The foreign investor must make this accreditation with the appropriate certification of Land Registry including information about domain and burdens.
In the case of the residence-authorization application, these accrediting documents must be dated within the 90 days preceding the presentation of the application.
The approval of this Law takes place in an economic environment that is already favoring foreign investment in real estate in Spain. For example, one in every six acquisitions of buildings (16.9%) is by a foreign national, and the foreign investment in real estate has experienced an increase of 40% during the last five years.
One of the key motives of this increase in foreign investment has been the imminent fall of prices motivated by the housing-sector crisis. Specifically, the cumulative fall of property prices over the past five years has now reached 34.4% (source: Bank of Spain), matching registered prices in 2007. In addition, it has been difficult for Spanish purchasers to acquire real estate in Spain because of the current economic crisis and financing issues.
The particular posture of the Spanish housing market plus the commitment of the Spanish Government to promote this Law demonstrates high hopes to crystallize an even more significant increase in Spanish real-estate purchases by foreign investors.
All of this highlights the natural attraction of Spain —its strategic geographic position, its highly skilled population, its excellent network of infrastructures, and its enviable climate and culture— making our country an ideal place for foreign investment.
This article is not considered as legal advice