Spain's Golden Visa has been a major attraction for foreign investors for years, offering them the opportunity to obtain residency in the country in exchange for a significant investment.
However, its future is now in question, with the government announcing it is to be withdrawn a few days ago. The scheme, which has been the subject of debate both regarding how effective it has been in boosting the economy, and its social and political implications, generating a range of conflicting views.
We tell you exactly what the Golden Visa is, how it works and the reasons why it will soon disappear.
What is the Golden Visa in Spain?
A Golden Visa is a special type of residence permit created for foreign nationals who make a considerable investment in Spain, for example, by purchasing luxury real estate.
This visa allows them to live and work in Spain for an initial period of three years, with the option to renew it for a further five years, as long as they continue with their original investment.
Besides other benefits, this visa allows free movement within the Schengen area and the chance to obtain Spanish nationality after effectively residing in the country for a certain period.
How do Golden Visas work?
The Golden Visa's main purpose is to attract foreign investment, boost entrepreneurship and contribute to Spain's economic development.
Some of the key benefits include being able to reside legally in Spain, work in the country, access public services, and freedom of movement within the Schengen area, as mentioned above.
In addition, the Golden Visa provides investors with the chance to diversify their investment portfolio, obtain a second residence in a European country and, in some cases, make it easier to obtain Spanish citizenship.
This scheme also benefits the Spanish economy by attracting foreign capital that can be allocated to key sectors such as real estate, tourism, technological innovation and job creation.
How to get a Golden Visa in Spain?
This visa is intended for non-Spanish nationals who wish to make a significant investment in Spain and obtain a residence permit as a result. Applicants must meet certain investment requirements and criteria established by Spanish law. Investors who can apply for the Golden Visa must:
- Purchase real estate in Spain for a minimum value of €500,000
- Invest in shares or holdings in Spanish companies for a minimum value of €1 million
- Invest in Spanish public debt for a minimum value of at least €2 million
Investors who set up companies in Spain and meet job creation and wealth generation criteria are also eligible. Moreover, investors' family members may also be eligible to apply for the Golden Visa as dependents of the primary applicant. It is important to note that Golden Visa applicants must meet certain requirements:
- Have a valid passport
- Have a criminal record certificate
- Not being prohibited from entering Spain or the European Union
- Have health insurance and sufficient financial resources to support themselves and their families during their stay in Spain
- Make a significant investment in Spain with the characteristics mentioned above
The Golden Visa is valid for one year and once this period has passed, the investor must apply for a residence permit to continue residing and working legally in Spain.
Why are Golden Visas being withdrawn in Spain?
At the beginning of April 2024, the President of the Government, Pedro Sánchez, announced the end of golden visas through home purchases. This measure, as Sánchez explained, aims to "guarantee that housing is a right and not a mere object of business speculation."
The Golden Visas, the socialist leader continued, have been granted above all in areas where the property market is under great pressure and this makes it "almost impossible to find decent housing for those who live and work in those areas and pay their taxes every day".
"This is not the country model we need, that of speculative investment in housing, because it is a model that leads us to disaster and above all it leads us to a crippling inequality as a result of many young people and families not being able to afford housing," said the president.
In short, Golden Visa withdrawal responds to the government's attempt to redirect housing and residency policy towards a more equitable and social approach. The measure aims to ensure that housing is an accessible right for all, not just a privilege for those with purchasing power.
What countries have the Golden Visa?
In the European Union, only four countries currently have similar schemes: Spain, Malta, Greece and Italy.
The trend is therefore gradually moving towards phasing them out. Countries such as the UK, Ireland, the Netherlands and Austria have either scrapped or announced that their Golden Visas will be phased out due to concerns about security, transparency and possible abuses.
However, outside the EU, other countries offer similar schemes, such as Australia, Singapore, the United States, Thailand and Canada.