End of the Golden Visa Program

Organic Law 1/2025 of January 2, 2025, on Measures to Improve the Efficiency of the Public Justice Service, puts an end to the Golden Visa program as of April 3, 2025.

The Golden Visa, as established by Law 14/2013 of September 27, on Support for Entrepreneurs and Their Internationalization, offered a residency visa to foreign citizens who made significant capital investments in Spain, with the aim of promoting investment in strategic sectors and contributing to economic development.

The Organic Law, in its Final Provision Twenty-One, eliminates this mechanism by adopting the following measures:

1. Removal of Content from Law 14/2013

Several provisions of Law 14/2013 are rendered void, including:

Article 63: Definition of Significant Capital Investment

This article defined the types of investments that qualified for the Golden Visa:

1. Financial Investments:
   • In Spanish public debt: €2 million.
   • In shares or social participations: €1 million in companies with real activity in Spain.
   • In investment funds or venture capital: €1 million.
   • In bank deposits: €1 million in Spanish financial institutions.
2. Real Estate Investment:
   • Acquisition of real estate properties in Spain with a minimum value of €500,000.
3. Business Projects of General Interest:
   • These must meet at least one of the following criteria:
     • Job creation.
     • Significant socio-economic impact in the geographic area where the activity will be developed.
     • Substantial contribution to scientific and/or technological innovation.

Article 64: Required Documentation to Prove Investment

• Financial Investments: Certificates issued by financial authorities or managing entities.
• Real Estate: Certification from the Land Registry proving ownership or pre-contracts supported by guarantees.
• Business Projects: A favorable report from the Economic and Commercial Office on the general interest of the project.

Article 65: Effects of Visa Granting

This article allowed visa holders to reside and work in Spain during the visa’s validity.

Article 66: Residency Authorization for Visa Holders

Visa holders could apply for a national residency authorization, provided they maintained their initial investment. This required:

• Certificates proving the maintenance of the investment.
• Compliance with tax and Social Security obligations.

Article 67: Initial and Renewable Authorization Durations

• Initial authorization lasted three years.
• Renewals could be granted for successive five-year periods, provided the conditions that justified the visa remained.

2. Transitional Provisions Added to Law 14/2013

Two new transitional provisions (First and Second) regulate the situation of:

• Applications Submitted Before April 3, 2025:
  • These applications can still result in the granting of a visa or authorization based on the regulations in force at the time the application was submitted.
• Renewals of Visas and Authorizations for Investors in Real Estate:
  • Visas and authorizations valid as of April 3, 2025, will remain effective for their original duration.
  • Renewal requests will be processed under the regulations in force at the time the initial authorization was granted.

You are a non-resident, and you are planning to invest in Spain. You have the intention to buy a property to conduct economic activity such as rental.

If that’s your case, you could either decide to buy the property as an individual or as a Spanish limited company.

BUY-TO-RENT AS AN INDIVIDUAL

• LESS BUROCRACY: as a company, you would need ongoing legal and accounting services to comply with annual obligations and potential Tax Office checks.
• LESS COMPLEXITY: process of purchase is much more straight-forward and avoids the complexity of corporate law.
• RENTAL INCOME TAX: if you are buying to rent, you would pay 24% on your gross income if you are non-EU tax resident or 19% on your net income if you are EU tax resident.
• CAPITAL GAIN TAX: you would be subject for payment of capital gain tax on the profit you make after the sale (19% on the net capital gain).

BUY-TO-RENT AS A SPANISH LIMITED COMPANY

• DEDUCTION OF EXPENSES: as a company based in Spain, you could offset expenses related to the rental regardless your tax residency.
• COMPLEX STRUCTURE: the process of purchase would be more complex as it is necessary to set up the company before. The company would need a loan from the shareholders to purchase the property. This loan could include an interest that would be also deductible as an expense.
• CAPITAL GAIN TAX: company could deduct all related expenses (management fees, interests of the loan, depreciation of the property, etc) and result in a nil capital gain.

If the property is intended to be your main or secondary residence, it may be simpler and more tax-efficient to buy as an individual.

However, if you plan to buy-to-rent, you would definitely need to consider purchase through  a Spanish limited company.