Almost a year has passed since the entry into force of the Spanish Entrepreneurial Support Act, Law 14/2013, of 27th September 2013, which was approved with the hope that it would attract foreign investors to our weak post-crisis economy thanks to its “promise” of visas and residence permits for investors, entrepreneurs and highly skilled professionals through a streamlined and simplified procedure. Undoubtedly, the most widely known measure introduced by this law was the granting of a residence permit to the foreign investor who makes a real estate investment of at least €500,000.
However, after this implementation period the results are not what were expected. Based on an initial assessment of 8th May 2014 the figures are clearly much less than those expected: only 81 non-EU citizens have benefitted from the new Law in Spain. Of this number, 72 made a real estate investment (of a minimum of €500,000 in real estate), while 6 made a capital investment (of a minimum of two million euros or one million in Spanish public debt securities, in shares or in company shares in Spanish business entities, respectively) and 3 presented a project to be developed in Spain and of general interest. Almost half of the investors were Chinese or Russian.
But, why has the Law not yielded the expected results? Among other reasons, one could argue, the fact that in other neighbouring countries the benefits of the “Golden visa” are much greater. One example of this is Portugal, where 1,340 visas have been granted since the Portuguese Law entered into force in October 2012, and some 900 from January 1st 2014 to August this year.
The main difference between the Spanish and Portuguese systems which explains this difference in result is that in Portugal one can expect Portuguese/EU nationality to be granted if the foreign investor maintains the initial terms of investment during a minimum period of residence of six years in Portugal (this being understood to mean a minimum stay of two weeks in the territory every two years).
Once again, the Spanish legislator has legislated, yes, but has clearly done so inadequately and with little reflection. Once again, it has put on a show for the gallery.