Spain’s Growing Allure for Residency-by Investment (RBI) Seekers

An article written by Alexander Osetinskiy IMCM, Partner at PRO-Relocation

In today’s world, navigating through the challenges has become increasingly difficult due to the fast-paced globalization and political and social uncertainties. This situation is particularly prevalent in regions with limited opportunities and high instability. Amidst the complexity, there is a glimmer of hope for those seeking security and a better future. “Golden visas” provide a path to an improved quality of life.

Among other European states, Spain is increasingly seen as a reliable provider of RBI permits, offering an enticing opportunity for individuals and families to find stability without nationality-based restrictions.

Now, more than ever, Spain, especially Madrid, beckons to investors with an irresistible proposition. At an event hosted by the ‘Spain-US’ Chamber of Commerce and ‘Invest in Madrid’ in New York, the President of the Community of Madrid unveiled a game-changing plan: a new personal income tax deduction set to take effect in 2024. This deduction offers a lifeline to those who haven’t resided in Spain for the previous five years. Their ticket to this tax benefit? Investment, relocation, and a fresh start as taxpayers in this vibrant region.

In a contrasting global development, on October 18, 2023, the European Commission proposed a more robust suspension mechanism for visa-free travel within the European Union. The Commission firmly regards investor citizenship schemes as potential threats to the Union’s security and the integrity of its border policy. In our assessment, these policies are poised to usher in stricter regulations for Caribbean CBI programs, possibly complicating access for applicants. Spanish residency programs, especially the coveted “Golden visa,” emerge as a more dependable alternative to Caribbean passport programs for those who envision relocating to the EU.

Purchasing real estate remains the most common route to securing Spain’s investment permit. Among investors seeking “Golden visas,” this real estate option holds enduring popularity. Spain’s RBI program extends a warm welcome, free from geographical restrictions or limitations on eligible real estate types.

It’s worth noting that while neighbouring Portugal has withdrawn the real estate option for “Golden visa” investors, such a move is unlikely in Spain. The numbers paint a compelling story – in 2022, foreign investors acquired 88,585 out of 646,241 residential properties sold. Furthermore, 8,975 of these residential properties (1.38%) exceeded 500,000 euros, rendering them eligible for the “Golden visa.” However, fewer than 1,000 “Golden visas” were granted to real estate investors. Despite the residency-by-investment program, there is no sign of undue pressure on the Spanish real estate market based on these figures.

For those looking beyond real estate, alternative paths to the Spanish “Golden visa” remain relatively less explored by the market and potential clients. Yet, these lesser-known routes may appeal more significantly to experienced investors who understand the value of diversification and risk management. 

These alternative avenues include:

• Acquiring funds managed by a Spanish financial institution, starting from 1 million euros.
• Placing deposits of 1 million euros: a straightforward and secure route to obtaining residence permission while achieving stable capital returns with no risk of equity devaluation or bond issuer default.
• Investing in Spanish company shares with a minimum of 1 million euros. This approach offers opportunities for long-term returns and safeguards against excessive devaluation caused by inflation.

To navigate the dynamic landscape of investment opportunities in Spain, seeking advice from knowledgeable professionals who understand the country’s laws and economic potential is essential.