If you’re looking to diversify your investment portfolio on an international level, Spain is a very attractive destination. Real estate prices dropped in 2013 following an economic recession, which led to incredibly inexpensive property prices for foreigners whose own finances were left unaffected. While the economy has certainly recovered significantly since then (in part, because of programs like the Golden Visa), scenarios still remain for property investments abroad in Spain with large capital gains and ROI opportunities.
In 2013, after a hit to the Spanish economy, the government created a program for non-EU citizens to get fast-tracked residency and benefits in return for a minimum investment of €500,000 towards property in Spain. The purpose was to attract foreign investors to purchase property and/or open businesses in Spain to inject money back into the economy and employ Spanish citizens. In the same vein of other countries’ similar laws (i.e. Portugal and Greece), this program, too, was informally dubbed the Spanish “Golden Visa.”
The Golden Visa comes with some really beneficial perks for those interested in investing abroad in Spain. For one, your entire family (spouse, children, dependents) will receive Spanish residency all for the single €500,000 investment. This gives you free visa travel within all of the EU Schengen region countries. Unlike other residency options in Spain, which require you to live six months out of the year to maintain your temporary residency, the Golden Visa investment program eliminates any in-country requirements to reside. This means that by investing abroad in Spain, you can travel freely in and out of the country while still maintaining your temporary residency permit.
After five years of temporary residency under this investment program, you can qualify for permanent residency. After another five years of permanent residency (ten total years from point of investment), you can qualify for Spanish citizenship. While annually renewing your temporary residency comes with no requirements to live in Spain, upgrading to permanent residency does require that the investor and their family’s primary residence be in the country.
Starting a Business in Spain
Investors who would like to start a business in Spain can also receive a type of entrepreneur visa, granting them temporary residency in the country. You will need to employ Spanish citizens and conduct a certain percentage of your business in the country. In doing so, your new company will have a tax rate of 15% for the first two years in business, 25% annually after that.
It’s always important to make sure that the country you are investing abroad in is politically and economically stable, so you can ensure the security of your investment. It’s also important to make sure that the country is safe, so that no harm will befall you or your investment.
In the 2017 Global Peace Index, Spain ranked 23 out of 163 countries profiled. The country ranked very positively in homicide, intensity of internal conflict, violent demonstrations, political stability, political terror, terrorism impact, death from external/internal conflict, and neighboring countries relations.
From an economical standpoint, Spain is the 14th largest economy in the world. At present, the current exchange rate of the euro is €1 = $1.19 USD (0.925 GBP, $1.48 CAD). In Madrid, Spain’s capital, an apartment in the city center would cost $4,978 USD per square meter ($2,680 just outside the city center). A one-bedroom apartment would rent for an average of $927 per month in the city center ($683.8 outside of the center).
Is there financing available for you new overseas property?
- GDP: $1.786 trillion USD (2017)
- Labor Force: 23 million
- Unemployment: 18.6%
- Ease of doing business ranking: 32nd
- Average Net Salary (after tax): $1,869 monthly, $22,428 annually
- Mortgage Interest Rate in Percentages (yearly): 2.04%
The main industries in Spain include machinery, metal and metal manufacturing, chemicals, pharmaceuticals, shipbuilding, automobiles, tourism, textiles, food and beverage.
With an affordable property market, political stability, domestic/international safety, and beneficial residency/visa programs for foreign expats, investing abroad in Spain could prove to be a very lucrative endeavor.
Tyler Sorce is an American writer and digital nomad currently living in Lisbon, Portugal. In a past life he was a chef in Manhattan and Paris, follow his travels and favorite dishes on Instagram.
“The 15 Questions You Should Ask When You Buy Properties Overseas”
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