Latest changes to the Golden Visa in Spain (2024)

The Golden Visa has been a fundamental pillar of Spain’s foreign investment attraction strategy since its creation in 2013. This visa has allowed thousands of investors and their families to obtain residence permits in exchange for significant investments in the country, boosting key sectors such as real estate and finance. The Golden Visa has not only contributed to economic growth, but has also facilitated the internationalisation and development of business projects.

However, in recent months, important developments have emerged that could radically transform this visa. The Spanish government has proposed a series of modifications with the aim of reducing real estate speculation, improving transparency and strengthening the prevention of money laundering. Among the most notable changes is the elimination of investment in real estate and funds as ways to obtain the Golden Visa, leaving only options such as bank deposits, public debt and business projects of general interest.

In this blog post, we will explore these proposed changes in detail and analyse their potential impact on the market and future investors. We invite you to learn how these changes may affect your plans and how our team of experts at Relomar is prepared to help you navigate this new landscape.

Understanding the context of the Golden Visa in Spain…

PasaporteThe Golden Visa in Spain was introduced in 2013 during the tenure of Mariano Rajoy’s government, at a time when the country was seeking to recover from the consequences of the Eurozone crisis. This crisis had left a deep mark on the Spanish economy, especially on the real estate sector, which suffered a sharp drop in prices and a significant decline in demand.

To counteract these negative effects and revitalise the economy, the government implemented the Golden Visa as a measure aimed at attracting crucial foreign investment. This visa offered residence permits to non-resident investors who made significant investments in Spain, with the aim of encouraging the arrival of foreign capital and stimulating key sectors such as real estate, finance and business.

The initial objectives of the Golden Visa were:

 

  • Attract foreign capital: The Golden Visa was conceived as a tool to attract high net worth investors willing to inject capital into the Spanish economy.
  • Revitalise the real estate sector in Spain: By purchasing properties valued at 500,000 euros or more, it was hoped to stimulate the real estate market and absorb the oversupply of housing.
  • Boosting economic growth: By investing in companies and other financial assets, the creation of the Golden Visa was intended to support job creation and the development of business projects.

Since its creation, the Golden Visa has facilitated thousands of investments, becoming an important pillar of Spain’s economic policy. However, over time, criticisms and concerns have arisen about the impact of the Golden Visa on real estate speculation and its effectiveness in the equitable distribution of economic benefits. These concerns have led to recent proposals for modification, which seek to bring the Golden Visa in line with the country’s current needs and demands for greater transparency and economic sustainability.

This is the proposed law to modify the Golden Visa

The recent bill to amend the Golden Visa in Spain comes in response to growing concerns about real estate speculation and the need for greater transparency in foreign investment flows. The two main objectives of these changes are:

  1. Reducing property speculation: One of the most frequent criticisms of the Golden Visa has been its contribution to property speculation, especially in large cities and tourist regions. The massive purchase of property by foreign investors has resulted in rising prices, making it more difficult for local residents to access housing. By eliminating investment in real estate as a route to obtaining the Golden Visa, the government aims to alleviate this pressure and foster a more accessible and balanced real estate market.
  2. Improving transparency and preventing money laundering: Another crucial objective is to increase transparency in foreign investments and strengthen anti-money laundering measures. The new proposals seek to ensure that investments that qualify for the Golden Visa are clear and traceable, making a positive contribution to the Spanish economy without risks associated with illicit activities.

Gráficos en portátil y móvilIn addition, the draft law introduces significant changes to the investment routes allowed to obtain the Golden Visa, with the aim of aligning them with the aforementioned objectives of reducing speculation and improving transparency. The most important changes are:

  1. Elimination of investment in real estate and funds. Until now, one of the most common ways to obtain the Golden Visa was through the purchase of real estate worth at least 500,000 euros. The new proposal eliminates this option, as well as investment in funds, which also allowed investors to obtain residency.
  2. Other investment avenues for obtaining the Golden Visa remain in place. Investors can opt for a bank deposit of at least one million euros in a Spanish financial institution. Another option is to invest at least two million euros in Spanish public debt securities, an option that directly contributes to financing the state. It is also still possible to obtain the Golden Visa through a business project that is developed in Spain and is considered to be of general interest. This type of project must meet at least one of the following conditions:
  • Job creation: The project must generate significant employment for the local population.
  • Relevant socio-economic impact: The investment must have a positive impact on the economy of the Spanish region where it is developed.
  • Contribution to scientific and/or technological innovation: The project must contribute to technological or scientific progress in the country.

These amendments seek to ensure that investments made to obtain the Golden Visa have a positive and tangible impact on the Spanish economy, reducing risks associated with speculation and improving the transparency and legality of capital flows.

What is considered a ‘significant capital investment’? More details on the Golden Visa amendment bill

 

The new bill to modify the Golden Visa in Spain redefines what is considered a ‘significant capital investment’, specifying the conditions and minimum amounts that must be fulfilled to qualify for this visa.

In order to obtain the Golden Visa, non-resident foreigners must make a capital investment that is considered significant according to the following criteria set out in the bill:

Minimum investment in government debt securities, shares, equity or bank deposits

  • Government bonds: An initial investment of at least €2 million in Spanish government bonds. This option not only provides stability for the investor, but also helps to finance the needs of the state, contributing to the country’s economic well-being.
  • Shares or equity: An investment of at least EUR 1 million in shares or equity in Spanish companies. This channel encourages the growth and development of the private sector, supporting both established companies and new innovative start-ups.
  • Bank deposits: A bank deposit of at least €1 million in a Spanish financial institution. This option provides liquidity to the banking system and ensures a steady flow of capital into the national economy.

Business project of general interest

For those who choose to undertake a business project in Spain, the investment must be considered and accredited as being of general interest. The assessment of these projects will be based on the fulfilment of at least one of the following conditions:

  1. Emprendedor extranjeroJob creation: The project must demonstrate that it will generate a significant number of jobs for the local population, contributing to the reduction of unemployment and the development of the community.
  2. Relevant socio-economic impact: The investment must have a noticeable socio-economic impact on the region where the activity will take place. This may include the revitalisation of depressed areas, the promotion of strategic sectors, or the improvement of local infrastructures.
  3. Contribution to scientific and/or technological innovation: The project must make a relevant contribution to scientific or technological innovation in Spain. This may include advanced research, development of new technologies, or any other activity that boosts scientific and technological progress in the country.

These definitions and requirements detailed in the bill are designed to ensure that investments under the Golden Visa have a positive and significant impact on the Spanish economy and society. By focusing on transparent and high quality investments, the government seeks to foster a more sustainable and fairer economic environment, while attracting foreign capital and talent that will contribute to Spain’s long-term development.

Official statements and reasons for the modification of the Golden Visa in Spain

Spanish Prime Minister Pedro Sánchez has been clear and forceful about the need to reform the conditions for obtaining the Golden Visa. During a meeting of the Council of Ministers on 9 April 2024, Sánchez emphasised that the housing market in several regions of Spain is under ‘enormous pressure’. According to his statements, ‘94 out of every 100 such visas are linked to real estate investment, in large cities that face a very stressed market and where it is almost impossible to find decent housing for those who already live, work and pay taxes there’.

Sánchez stressed that his government’s main objective is to ensure that access to housing is recognised as a fundamental right and not merely a speculative activity. The elimination of the real estate investor visa is seen as a crucial step towards easing tensions in the housing market and ensuring that local residents have access to affordable housing.

Ciudad españolaThe consensus to end the practice of granting visas in exchange for the purchase of properties valued at 500,000 euros or more was reached during the aforementioned Council of Ministers meeting. This agreement reflects a concerted effort by the government to address the structural problems of the real estate market and to foster a more equitable and sustainable environment.

The report discussed at the Council of Ministers reveals significant figures on visas granted in 2023. According to official data, 3,273 Golden Visas were granted. However, Transparency International suggests that in reality around 6,200 visas related to real estate investments were granted, indicating that the figure could be even higher. The geographical distribution of Golden Visas highlights the regions most affected by real estate pressure: Madrid, Barcelona, Valencia, Malaga, Alicante and the Balearic Islands.

Furthermore, the Transparency International report highlights that the main beneficiaries of these visas were citizens of China (2,712), Russia (1,159), Iran (203), the United States (179) and the United Kingdom (177). This predominance of investors from certain countries has raised additional concerns about the fairness and distribution of the economic benefits derived from the Golden Visa conditions.

Ultimately, the official statements and data presented underline the need to reform the Golden Visa eligibility conditions in order to address the challenges of the real estate market and ensure that access to housing is an accessible right for all residents in Spain.

International trends and Europe’s influence on Golden Visa changes

The European Commission has played an important role in pressuring member states to review and reform the Golden Visa. This pressure is based on concerns related to security and transparency. The European Commission has urged EU countries to take stronger action, highlighting the need to ensure that foreign investments are not used for illicit activities such as money laundering.

Several European countries, including the UK, Ireland and Portugal, have responded to these concerns by eliminating or significantly modifying their investor visas. For example, the UK ended its High Net Worth Visa programme in 2022, while Ireland eliminated its Golden Visa programme in 2023. Portugal also adjusted its visas to stop granting residences in exchange for property purchases. These actions reflect a broader trend towards greater transparency and regulation in the field of foreign investment in Europe.

Outside Europe, several countries have also taken steps to modify investor visas. One notable example is Australia, which recently abolished its programme for investors investing more than A$5 million. Instead, Australia chose to focus on the entry of higher-skilled workers, reflecting a preference for merit and skills-based immigration.

These cases point to a global trend towards greater scrutiny and regulation of investor visa programmes.

Future of the Golden Visa and how to obtain it

For current Golden Visa holders in Spain, the future may seem uncertain amid the proposed changes to the programme. A number of questions may be raised about the maintenance of their residency status and the requirements for renewal. However, it is important to remember that any changes to the legislation would be implemented gradually and would respect the acquired rights of existing holders. Transitional provisions are likely to be put in place to ensure a smooth and fair transition for those who already hold the Golden Visa.

Expatriados comiendo en un jardínDespite the possible changes to the Golden Visa, Spain remains an attractive destination for foreign investors seeking investment and residence opportunities. There are several alternatives available for those wishing to relocate and settle in Spain:

  • Residence by investment in companies: Investors may consider the option of investing in business projects in Spain that generate employment and add value to the local economy. This route offers the possibility of obtaining residency by investing in strategic and promising sectors.
  • Residence by investment in financial assets: Another alternative is investment in financial assets, such as government bonds or investment funds, which meet the requirements established for obtaining residence in Spain. This route provides flexibility and diversification in investment options.
  • Visas for entrepreneurs and highly qualified professionals: Spain offers specific visas for entrepreneurs and highly qualified professionals wishing to establish themselves in the country. These visas are designed to encourage innovation, talent and job creation.

How Relomar can help you at Relomar to obtain the Golden Visa

At Relomar, we understand that every situation is unique and that each investor’s needs may vary. Our team of relocation experts is committed to offering personalised advice and solutions tailored to the specific needs of each client. We have the Spanish market knowledge and experience to guide our clients through the regulatory changes and help them find the best alternative to meet their investment and residency objectives in Spain.

Whether you are looking to obtain a new residency, renew your existing status or explore different investment options, at Relomar we are here to help you every step of the way. Our commitment is to provide a high quality service and a hassle-free experience to ensure a successful transition to your new life in Spain.