Getting an EU Residence Permit through Real Estate Investment
Executive summary
1. THE ECONOMIC DOWNTURN IN EUROPE:
AN ASSET FOR DEVELOPPING COMPANIES
Foreign investors turning to Spanish real estate investments.
A passport to the European Union.
2. EXECUTIVE SUMMARY
THE REAL ESTATE IN SPAIN
VALENCIA: POTENTIAL DESTINATION FOR FOREIGNERS
DIFFERENT TYPES OF TARGET
THE SPANISH RESIDENCE PERMIT? A PASSPORT TO THE EUROPEAN UNION
WHY TO INVEST RAPIDLY IN SPAIN ?
CONCLUSION
BIBLIOGRAPHY
CONTENT
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3. Nowadays, Spain has between 700,000 and 1 million unsold new homes following the collapse of its real estate market
in 2008. Moreover, one third of these seem to be designed as holiday homes in coastal tourist areas. In order to face the
crisis, some governments took measures to attract investors and thus, revitalize the economy of their country. Whereas
some countries allow European a permanent residence permit after having lived 5 uninterrupted years in European
Union country, the Spanish government provides this permanent residence permit more easily.
In fact, for any real estate investment spread over several properties or bought as unique property for a total purchase
price of at least €500,000, the Spanish government provides European permanent residence permit to any foreign
investor and all his or her family (wife and children). In addition, this permit could become a final permit if the real
estate bought is not sold within 5 years. These new residents will not have to find employment in Spain, or to
contribute to social security or even to live in the country for most of the year (spending just one or two weeks per year
is enough). Finally, the main asset of this European permanent residence permit is that it allows its holders to move
anywhere in the Schengen area.
This project will principally target the Russian, Chinese and American people. In fact, getting a passport to Europe from
these countries may be complicated and may take a long time. Moreover, Russian people would appreciate the good
weather on the Spanish coast while Chinese people would perceive this investment as a good deal in the real estate
market which is in difficulty. To be more specific, it would be good to target families. In fact, they will have access to the
universities in the European Unions easily, paying their university fees as a European citizen which is less expensive
than Non-European university fees. Finally, this accommodation could be used as holiday home during summer.
EXECUTIVE SUMMARY
Large investors from Eastern countries seem to invest more in Spain in order to have access to
the European Union while enjoying the good weather on the Mediterranean coast.
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4. According to experts such as Julio Gil,
President of the Foundation for Property
Research, the real estate in Spain will see its
demand increasing by prices stability, cheap
and accessible finance in the future.
In 2013 and 2014, most of the home sales
were resale houses. In fact, the number of
new homes transactions decreased over the
year.
There was a fall in new home sales by
62.81% to a total of 18,400 transactions.
Between October and December 2013.
More than 75% of the total property
transactions are for resale housing in 2013.
Between new homes and resale housing:
Nowadays, Spain, ranked the fifth European country with a GDP around USD30,000, has between
700,000 and 1 million unsold new homes with average price having fallen by 30% following the
collapse of its real estate market in 2008.
Home sales rose by 14% in November 2014
compared to the previous year.
Average number of home sale transactions
per month (between January and November
2014): 29,016 transactions. (+17.5%).
The sale of apartments: +14.4%* in 2014.
The sale of individual family homes:
+12.3%.* (*Compared to 2013)
Some luxury houses and apartments lose up
to 85% of their value in south of Spain.
Leaving the foreigners the choice of buying
several properties at a discount price.
The key numbers:
THE REAL ESTATE IN SPAIN
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5. Valencia, an attractive destination.
VALENCIA: A POTENTIAL
DESTINATION FOR FOREIGNERS
40,34%
35,02% 34,34%
23,62%
Balearic Islands Valencian
community
Canarias Murcia
Foreign Share of Total Demand in Coastal Area
*Source: according to globalpropertyguide.com
Madrid and Valencia have been named the two potential property
investment hotspots for 2015.
Valencia: A key tourist destination:
Business and investment hub
+30% in number of properties sold in Valencia compared to 2013.
One of Europe’s most exciting and progressive cities.
“California of Europe” thanks to its long stretches of coastline.
Balmy temperatures all year round, renowned gastronomy, rich
cultural heritage and architecture.
Accessibility to Madrid, Ibiza and Barcelona.
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Five places to invest in Valencia city
• El Cabanyal
• Pla del Remei
• Gran Vía
• Ruzafa
• El Mercat
Advantages in their strategic location and their
potential price increases in real estate.
Proximity to the sea, renovation of urban area,
new green spaces and numerous facilities.
6. A non-European people target:
Russian investors wishing to acquire a
second home as holiday pied-a-terre.
Chinese investors in search of
investment opportunities.
The American and Canadian people
looking for a retirement plan.
Targeting the families with children to
make the most of the golden visa.
DIFFERENT TYPE OF TARGET
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The Foreign investors’ interest in Spanish real estate.
Investors looking to cash in on important depressed
property prices due to the crisis in 2008.
Interest has increased from the Middle East, Asia
and Russia since 30th September 2013 due to the
residency permit granted.
In 2013, the foreign share of total demand in
Spanish real estate increased from 5% to 10% while
the Spanish demand decreased at the same level.
Foreign Share of Total Real Estate Demand in
Spain
*Source: Spanish Ministry of Development
7. THE SPANISH RESIDENCE PERMIT:
A PASSPORT TO THE EUROPEAN UNION
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The requirement and documents needed:
Documents Needed:
• Identity document or passport.
• Public or private health insurance taken out
with a company operating in Spain.
• A Background check.
• Proof of sufficient funds during the residence in
Spain.
• Proof of the acquisition of the property and
purchase deeds of the real estate.
No actual residence in Spain needed. The only
requirement is to visit Spain once during the period
of residence.
Make a minimum investment of €500,000 of equity in
real estate. Comprised of one or several properties.
The Benefits for non-European people to get a
“Golden Visa”:
Getting the Spanish residency to live and work
anywhere in Spain.
The status of Non-Resident relating to payable taxes
in Spain is maintained.
No minimum period of stay.
The right to travel to Spain and all the 27 countries
of the Schengen area without a visa.
No Social Security contribution.
Spouses and underage children may be included in
the permit.
Access to the universities as European people. The
university fees are the same as for European
students.
8. WHY TO INVEST RAPIDLY IN SPAIN ?
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The advantages investing in Spain
Spain, the 14th largest economy in the world.
The Spanish legal framework:
• The stability of Spanish legal institutions
• General liberalization system: No difference
between EU residents and non-EU residents.
• Diversification of Investors portfolio in Spain
A great opportunity:
• Capital values falling more rapidly than rental values
The Spanish infrastructure:
• Extensive road and rail network, ports and airports.
• Valencia : among the 10 largest container ports in
Europe
• Spain as the longest motorway network in Europe
A gateway open to the world
• Spain, a bridge to North Africa, Europe and the rest
of the world with its international airports.
The forecasts for the future:
According to the S&P, Spain will see an
upswing property prices climbing by 2% in
2016.
Arrival more frequent of British and US
property funds in Spain with the intention to
develop themselves.
The Spanish economy is forecast to take-off
in 2015
The real estate sector will be the engines of
economic growth in Spain in 2015, as well as
company and household financing.
9. CONCLUSION
To conclude, although the economic downturn in Europe has created some economic problems in European countries,
especially in Spain, this economic downturn has become an asset for Spanish real estate companies. In fact, the foreign
investors’ demand has increased due to the prices decreases. In addition, the number of second hand property
transactions represents the major part of the total property transaction in Spain. Barcelona being already an attractive
city for its real estate investments, the Valencian community, also in a coastal area, is a great opportunity to invest. In
fact, being one of Europe’s most exciting and progressive cities, Valencia is becoming in someway the “California of
Europe”. Balmy temperatures all year, renewed gastronomy, the quality of their infrastructures and many urban
renovations motivate the purchases.
Rich Russian and Chinese families, being essentially targeted for their high purchasing power and their desire to have
access to Europe, added to American and Canadian people looking for a retirement plan, could be a strong target.
Making a minimum investment of €500,000 in Spanish real estate and coming at least once a year to Spain is sufficient
to get the famous “Golden Visa”, allowing its holder full access to the Schengen area.
Finally, attracting this clientele as soon as possible is becoming urgent for the real estate companies thanks to the
current economic environment in Spain. In fact, time is running quickly and the Spanish government will find other ways
to face the crisis prior to an economic upturn.
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10. • World Bank. “GDP per Capita (Current US$)” [Online]. 2014.
http://data.worldbank.org/indicator/NY.GDP.PCAP.CD (Accessed the January 25th, 2015).
• Global Property Guide. “Spain’s housing market is recovering”. [Online]. 20 July 2014.
http://www.globalpropertyguide.com/Europe/Spain/Price-History (Accessed the January 24th, 2015).
• Fiona Govan. “Foreigners offered chance to stay in Spain for £130,000“. The Telegraph. [Online]. 19 Nov 2012.
http://www.telegraph.co.uk/news/worldnews/europe/spain/9689008/Foreigners-offered-chance-to-stay-in-Spain-for-130000.html
(Accessed the January 25th, 2015).
• Jean- François Venne. “Espagne: achetez une maison, recevezun permis de séjour en prime!”. Conseiller [Online]. 31 May 2013.
http://www.spain-property.com/files/pages/spain-residence-permit.asp (Accessed the January 25th, 2015).
• Spanish Property Insight. “Residency in Spain for Property Investors (“Golden Visa”)”. [Online].
http://www.spanishpropertyinsight.com/residency/ (Accessed the January 26th, 2015).
• Property Wire. “Valencia and Madrid tipped as potential property hotspots for 2015”. [Online]. 06 January 2015.
http://www.propertywire.com/news/europe/spain-real-estate-market-2015010610006.html. (Accessed the January 26th, 2015).
• “Spanish Golden Visa Program”. Immigration Spain, International lawyers Group. [Online].
http://www.immigrationspain.es/2013/02/spanish-golden-visa-program/(Accessed the January 27th, 2015).
• Spain Property. “Golden Visa - Spain residence permit for Non-EU citizens”. [Online] 23 Jan 2015.
http://www.spain-property.com/files/pages/spain-residence-permit.asp (Accessed the January 27th, 2015).
• Kyero.com. “Home Sales Rose by 14% in November”. [Online] 20 January 2015.
http://news.kyero.com/2015/01/home-sales-rose-by-14-in-november/19346 (Accessed the January 27th, 2015).
• EuroWeeklyNews. “Spain’s property market shows signs of recovery, but who’s buying?” [Online] 29 January 2014.
https://www.euroweeklynews.com/properties-in-spain-sale-real-estate-spain/item/118455-spain-s-property-market-shows-signs-of-recovery-but-
who-s-buying. (Accessed the January 27th, 2015).
• Fiona Govan.”Spanish Property: is the time finally right to buy ?”. Telegraph. [Online]20 July 2013.
http://www.telegraph.co.uk/property/internationalproperty/10188136/Spanish-property-is-the-time-finally-right-to-buy.html.
(Accessed the January 27th, 2015).
BIBLIOGRAPHY
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