Latest / IMI Podcasts / #26: Spain: Getting a Golden Visa for €350k and Citizenship Without Tax Residency - With Krista Victorio

Transcript

#26: Spain: Getting a Golden Visa for €350k and Citizenship Without Tax Residency - With Krista Victorio · IMI Podcasts

0:05
SPEAKER_04: Ladies and gentlemen, it's 7 p.m.
0:07
SPEAKER_04: in Dubai, 3 p.m.
0:08
SPEAKER_04: in Lisbon, 11 a.m.
0:09
SPEAKER_04: in St.
0:10
SPEAKER_04: Welcome to a new episode of Mobility Standard, the podcast where we detect current events, trends, and personal questions related to investment migration.
0:20
SPEAKER_04: I'm your host, Kristen Neste, editor of IMI, and I'm back from something of a podcasting IA.
0:27
SPEAKER_04: And in this episode, I had the pleasure of talking to Krista Victorio, a managing partner in Orient based Devonta.
0:35
SPEAKER_04: Originally, she's a Filipino-American and she first got involved in investment migration, but she herself got Spanish golden pizza many years ago, which now helps others to the state.
0:46
SPEAKER_04: Krista and I covered all manner of topics related to residency and citizenship in Spain, including the outcome of the recent Spanish general election and how the various alternatives for government might impact Golden Visa.
1:00
SPEAKER_04: We talked about whether the Spanish government is obfuscating Golden Visa statistics on purpose for some indications that they might be doing that.
1:08
SPEAKER_04: We spoke about how it's possible to get Spanish Golden Visa for a 350,000 euro upfront investment, how you can get Spanish citizenship without becoming a taxpayer in Spain.
1:21
SPEAKER_04: We talked about how Spain's startup slash digital nomad visa can reduce your tax bill for the so-called MECA law.
1:28
SPEAKER_04: We talked about why Spain's golden visa still remains open to Russian applicants.
1:33
SPEAKER_04: And we finally discussed how long it actually takes to get citizenship in Spain.
1:39
SPEAKER_04: All of that and a great deal more in today's episode of Mobility Dann.
1:44
SPEAKER_04: I'd like to remind you that you can follow all of iMI stories on our website, imydaily.com, on our mobile phone apps, and our free newsletters, as well as on your favorite social media network.
1:55
SPEAKER_04: You can also follow this podcast on Spotify, Apple Podcasts, and most other podcast platforms.
2:01
SPEAKER_04: With the preambles out of the way, let's get this show on the road.
2:08
SPEAKER_04: Okay, Krista, I think the first thing that we should start talking about is the results of the elections that Spain had on Sunday.
2:18
SPEAKER_04: It's pretty unclear.
2:21
SPEAKER_04: There's no clear winner in that.
2:23
SPEAKER_04: Can you just tell me uh a little bit about what happened?
2:25
SPEAKER_04: What are the relevant uh factions, the blocks, and uh how each of those blocks view golden visas?
2:34
SPEAKER_00: Christian, I love how you started this with asking the most complex topic of all.
2:39
SPEAKER_00: Um yeah, happy to dive in.
2:42
SPEAKER_00: So actually, you know, before I answer that, I want to spend just a couple of seconds explaining how the government actually works in Spain.
2:50
SPEAKER_00: So, you know, I'm from I'm a non-Spaniard, technically Spaniard now, but um the government here isn't formed in the same way as some other parts of the world.
2:58
SPEAKER_00: So just again, a quick explain like I'm five in Spain, the general elections vote for seats, right?
3:03
SPEAKER_00: So there's multiple political parties, and depending on who the majority is, or let's say alliance is formed within the majority, they then form a government and elect a president.
3:13
SPEAKER_00: So it's not about electing a president from the general election, rather, it's the populace deciding, you know, the basically who would represent them, and then those representatives electing a govern a president forming a government.
3:25
SPEAKER_00: Now, as expected, somewhat, or depending on who you're asking, the right was expected to, let's say, win this election.
3:33
SPEAKER_00: And by win, it means secure some kind of majority.
3:36
SPEAKER_00: That didn't exactly happen.
3:38
SPEAKER_00: So while the right did win more seats compared to the previous election, they didn't win enough to get a majority.
3:45
SPEAKER_00: So by right, I'm speaking mainly of PP and Vox.
3:49
SPEAKER_00: So these are the two big parties that traditionally are considered right-leaning, and the left was, let's say, the former government composed mainly of PSOE.
3:57
SPEAKER_00: And um, well, now it's a party called Sumar.
4:01
SPEAKER_00: So Sumar is, let's say, comprised of other smaller parties that used to exist, but together they're considered the left.
4:06
SPEAKER_00: What's happened is that effectively the left, if you put all of them together and they vote the same way, will have 172 votes.
4:15
SPEAKER_00: You need 176 to basically secure a majority and elect a president.
4:20
SPEAKER_00: The only way that the left will be able to do this at this stage is if they also secure the vote of a party called Jun Sper Catalunya.
4:28
SPEAKER_00: So let's say let's call it a swing vote.
4:31
SPEAKER_00: And um, what makes this extremely interesting is that a majority part of their platform is the Catalan referendum.
4:38
SPEAKER_00: So, what that means is for the left to effectively what we expect secure their vote, they would have to acquiesce to that.
4:46
SPEAKER_00: And we don't really see that as something that's going to happen.
4:49
SPEAKER_00: So, most likely it will go to, let's say, a second vote within the Congress.
4:54
SPEAKER_00: And in this case, for the left to win or secure, let's say, the majority, all Juan Sburg-Catalunia has to do is abstain.
5:02
SPEAKER_00: But in this case, an abstention would also mean a win, right?
5:06
SPEAKER_00: So, why they don't really have an incentive to do that.
5:08
SPEAKER_00: And just to kind of you know, drive down the point here is that Juan Spur Catalunya had the worst, let's say, turnout that they had in years.
5:16
SPEAKER_00: So for them, a repeat of a general election, which we actually think is most likely to happen, can only be for the best.
5:23
SPEAKER_00: And we see it as they have very little incentive right now to align with PSOE and Sumar to get the result that the left party wants.
5:32
SPEAKER_00: I don't really know what's going to happen.
5:34
SPEAKER_00: Um, they have until August 17th, effectively, to form Congress and then vote the president.
5:40
SPEAKER_00: In our opinion, at least in Orient, based on what we're seeing right now, everything is still in flux.
5:45
SPEAKER_00: All we can tell you is that the left lost seats, the right won seats, but not enough to secure a majority.
5:52
SPEAKER_00: Actually, just today, the news came out that now they're counting a lot of the postal votes, which could swing the seats just a little bit here or there.
5:59
SPEAKER_00: So nobody really knows.
6:01
SPEAKER_00: Our right now expectation is that another general election will be called perhaps sometime early next year.
6:10
SPEAKER_04: Okay.
6:11
SPEAKER_04: And Mazpais Inigo Errajon, who was the progenitor of this bill to end the uh real estate option for the golden visa, what happened, whatever happened to that?
6:23
SPEAKER_04: That that went nowhere?
6:25
SPEAKER_00: Well, I wouldn't say it actually went nowhere.
6:27
SPEAKER_00: Um, and so maybe for those that are listening, it's worth noting that the the the last time PP, let's say, had control of the government, they were actually the ones that established the golden visa.
6:38
SPEAKER_00: So you're right in saying that traditionally the right-leading parties tend to favor easing investment.
6:43
SPEAKER_00: And again, it was a right-leading government that effectively established the golden visa law in Spain.
6:48
SPEAKER_00: Now, to your point about Mas Baís, you know, this is a small political party that garnered some headlines a couple of months ago, it is worth noting that at least for us, when we verified, let's say, the truth or credibility of these claims, um, nothing ever actually made it to the floor of Congress.
7:04
SPEAKER_00: So there was a lot of things in media, but nothing actually made it to the floor.
7:09
SPEAKER_00: So there was a lot of noise then.
7:10
SPEAKER_00: And just to note, while we have no government, nothing can actually be done.
7:14
SPEAKER_00: No laws can be proposed, no laws can be revoked, no laws can be modified.
7:18
SPEAKER_00: Um, and the other thing I also wanted to note is along with Maz Baís, there were other political parties that suggested, let's say, their own changes, right?
7:26
SPEAKER_00: So of note, I think Ciudadanos, so they're they're not actually in the current elections.
7:31
SPEAKER_00: They wanted to eliminate the real estate option, but they also wanted to decrease the business, let's say creation one and even establish a startup golden visa, so to speak.
7:40
SPEAKER_00: Um, the ERC, Sudesquera Republica Catalana, actually wanted to ease the process and process the TA, I think, at the local consulates.
7:48
SPEAKER_00: So there were other political parties, each with their own opinion on what they wanted to do with a golden visa.
7:54
SPEAKER_00: Maz País, I think, being the more controversial one, did get broader more headlines.
7:59
SPEAKER_00: And Maz País now is actually within Sumar.
8:02
SPEAKER_00: So Maz País as a political party has now been swallowed, let's say, or or yeah, merged within Sumar.
8:09
SPEAKER_04: So one thing I've noticed about Spain is, well, actually not just Spain, but you know, I collect a lot of data, a lot of statistics on the various investment migration programs that are out there.
8:21
SPEAKER_04: And over the years, many of them have become, let's say, less timely in their publication of statistics.
8:30
SPEAKER_04: Now I see that Spain has stopped entirely publishing golden visa statistics.
8:34
SPEAKER_04: So that is to say, they're lumping the Golden Visa figures in with the broader work category.
8:43
SPEAKER_04: So it's impossible to know how many Golden Visa applications exactly have been approved in the last, well, not since 2021.
8:52
SPEAKER_04: Uh, do you think uh they're doing this on purpose because it's a sensitive topic that I want to have to go through the numbers in the press?
9:00
SPEAKER_00: That would be our suspicion as well.
9:02
SPEAKER_00: Yes.
9:02
SPEAKER_00: We think that they're doing this on purpose.
9:04
SPEAKER_00: There doesn't seem to be much of an incentive for them to actually publish these numbers.
9:08
SPEAKER_00: What I can tell you is that the last year that the UCE, so the UK is the Unidad de Grandes Empresas, which is actually the governing body that approves, let's say, the golden visa as we know it, the last time they published numbers was in 2019.
9:22
SPEAKER_00: And in 2019, I think they stated that 600 to 800 were new applications, which comprised about 15 to 20% of all, let's say, golden visa-related tramites at that year.
9:34
SPEAKER_00: So basically, that was the last year, you know, that they ever published this figure.
9:39
SPEAKER_00: Over the last, the next couple of years, they published, as you noticed, the general figures, right?
9:44
SPEAKER_00: So bundling in the golden visa as we know it with other residence permits.
9:48
SPEAKER_00: All we're doing, at least in Orient's, is using that same factor saying, well, if we apply this logic to what they have published, and just saying that in 2022, they actually published that they processed 54,000 residence files, saying 10% of that was attributed to golden visa, making no distinction between new applications, family members, and the like.
10:10
SPEAKER_04: But then you can assume a certain family size, et cetera.
10:13
SPEAKER_00: Exactly.
10:13
SPEAKER_00: And so for us, you know, our assumption here is about 20% of that then would be attributed to new applications.
10:19
SPEAKER_00: So that's just kind of something that we're comfortable with based on historical data and based on just the trend of you know the past recent years.
10:26
SPEAKER_00: The other thing I wanted to mention is that I would be cautious, and I know that this is what you play in, right?
10:32
SPEAKER_00: There's a lot of publications out there.
10:34
SPEAKER_00: I'm not saying it's you, you guys are actually one of the more reputable ones for sure, that that like to publish figures from you know one ministry or the other, but we say that it's really the UG that that is the authority in this because ultimately they're the ones that publish it.
10:47
SPEAKER_00: So other government ministries could have their own statistics.
10:50
SPEAKER_00: To be honest, we don't really know where they're getting those numbers from, but it is the UGE that really knows this as an authority figure.
10:57
SPEAKER_03: Sorry, UGE Union de Grandes Empresas.
11:00
SPEAKER_00: Unidad de Grandes Empresas.
11:01
SPEAKER_03: Unidad de Grandes Empresas.
11:04
SPEAKER_00: And actually, so one funny thing is, you know, there there's numbers that said it was more the 2000s, there's numbers that said this and that.
11:11
SPEAKER_00: There was an article, I think, that came out in March this year, 2023, saying that in 2022 that uh Spain only issued 136 golden visas.
11:21
SPEAKER_00: And I'm like, you know what?
11:21
SPEAKER_00: If that number is correct, then we issued all of them, and I'm gonna take that as a compliment.
11:25
SPEAKER_00: So who knows, right?
11:27
SPEAKER_04: Yeah, no, I I remember seeing that article and not giving it much credence.
11:32
SPEAKER_04: Um it was in uh idealista, I think.
11:34
SPEAKER_04: Uh something like that.
11:36
SPEAKER_04: Yeah, they mention some very small number, but yeah, that's not the data that I have.
11:40
SPEAKER_04: Yeah, um, I think um roughly estimated, just without without going into the details, wouldn't you say it's typically somewhere between 1800 and 2500 a year?
11:52
SPEAKER_04: We're a bit more conservative than that.
11:53
SPEAKER_00: Yeah, we're probably looking at more 1500, but I mean 1800, 1500, and who knows?
11:59
SPEAKER_00: It's uh we definitely would be shocked if it was anything higher than the upper limit you mentioned.
12:04
SPEAKER_04: Yeah, main applicants we're talking here.
12:06
SPEAKER_04: Right.
12:07
SPEAKER_04: Correct.
12:07
SPEAKER_04: Yeah.
12:08
SPEAKER_04: Okay.
12:10
SPEAKER_04: Can you explain to me the startup visa in Spain?
12:13
SPEAKER_00: Yeah, so the digital new land visa.
12:16
SPEAKER_04: Okay, so that's the same thing?
12:17
SPEAKER_00: Yes.
12:18
SPEAKER_04: It's basically Because it all it all came in through the there was this there was this law that was introduced at the end of last year.
12:24
SPEAKER_04: Um it's not ley de emprendedores from 2013.
12:28
SPEAKER_04: It's a separate law.
12:29
SPEAKER_00: It's basically the expansion of, yeah, but we interpret it as an expansion of the ley de emprendedores, as you mentioned.
12:36
SPEAKER_00: Well, that basically established the golden visa, and the digital nomad visa established what many call a startup visa, the nomad visa, etc.
12:43
SPEAKER_00: Um, and and so the important thing is the the law was approved in December, and it was really only in the first quarter of this year where the authorities, you know, published, let's say, the specific requirements and the process attributed to this.
12:56
SPEAKER_00: Very broadly speaking, it's really designed for digital nomads.
12:59
SPEAKER_00: It's designed for those, you know, who have a certain level of professional achievement and are maintaining employment with a non-Spanish entity.
13:07
SPEAKER_00: Um, and basically they would be granted at least an initial three-year resident permit in Spain, extendable to another two.
13:14
SPEAKER_00: One of the most important factors here is really that they need to prove that their employer is a non-Spanish entity.
13:21
SPEAKER_00: Although they are allowed to, let's say, work a percentage of time for a local entity.
13:26
SPEAKER_00: We realize that in practice this is really not done.
13:29
SPEAKER_00: Um, one of the most attractive things about the nomad visa is that it pretty much automatically qualifies you or puts you on a fast track to what is called Beckham Law.
13:38
SPEAKER_00: So Beckham Law, let's say, is Spain's answer to you know mitigating this idea of bad taxes in Spain and trying to attract talent.
13:49
SPEAKER_00: It basically grants um, you know, the those that have it a flat tax for income earned in Spain and no further taxes.
13:57
SPEAKER_04: So, okay, you correct me on my assumptions about Beckham Law, okay?
14:01
SPEAKER_04: I believe it's valid for six years, no more.
14:05
SPEAKER_04: So five years plus the year that you arrive.
14:09
SPEAKER_00: That's correct.
14:10
SPEAKER_04: And flat tax of 24% up to 600,000 in income.
14:16
SPEAKER_04: Yes.
14:17
SPEAKER_04: Uh so if you earn more than that, then uh the top rate of 47% applies on the money after 600,000.
14:25
SPEAKER_00: Correct.
14:26
SPEAKER_00: There's there's a graduated scale.
14:27
SPEAKER_00: And I will be cautious about what I'm saying in the next couple of lines here is that typically those who apply for this visa and are in that income bracket way above that, I would encourage them first to talk to a tax planner.
14:40
SPEAKER_04: Yeah, yeah.
14:41
SPEAKER_04: So just uh the disclaimer here this is not this does not constitute financial advice.
14:47
SPEAKER_04: This is for educational and entertainment purposes only.
14:51
SPEAKER_00: Um emphasis on the entertainment.
14:54
SPEAKER_04: But there's also um, I think there's something about Beckham while that's even more interesting, is that you can you can bring in foreign gains tax-free somehow.
15:05
SPEAKER_04: Uh sort of a non-DOM thing.
15:09
SPEAKER_00: There is, and and I think similar to what you just said, that this does not constitute financial and tax advice.
15:14
SPEAKER_00: I'm happy to do another session with that because I want to research you know certain topics.
15:18
SPEAKER_00: I want to be very careful about this because there are things that you can bring in, there are things that you cannot, and there's it's absolutely black and white, and it's not what you think.
15:27
SPEAKER_04: Okay, okay.
15:29
SPEAKER_04: Um and why do you say that the startup visa applicants get on a fast track for Beckham law?
15:36
SPEAKER_04: I mean, doesn't anybody who wants to do Beckham Law, I mean, if you're if you're coming in on a visa like let's say the non-lucrative visa.
15:44
SPEAKER_00: So it's part of the reason why the reason why we say it's a fast track, it's because pretty much the requirements of the digital nomad are very much aligned with what you need to qualify for Beckham Law.
15:54
SPEAKER_00: And it's not very clear for other visas.
15:57
SPEAKER_00: So pretty much Beckham Law is a separate application, right?
16:00
SPEAKER_00: It's not something that is necessarily automatically granted to you.
16:03
SPEAKER_00: You do have to apply for it.
16:05
SPEAKER_00: The thing is, with the requirements of the digital nomad visa, pretty much let's say overlaying that with Beckham Law, they're almost one in the same.
16:13
SPEAKER_00: One of the most important things for Beckham Law is that the reason that you come to Spain must be for employment.
16:19
SPEAKER_00: For the digital nomad visa, the reason you're coming to Spain is because of employment.
16:24
SPEAKER_00: So it's very much aligned with that requirement.
16:27
SPEAKER_00: You cannot necessarily say that for the non-lucrative because the whole point of the non-lucrative is to not work.
16:33
SPEAKER_00: So it's completely incompatible with the requirements of Vecham law.
16:37
SPEAKER_04: Yeah.
16:38
SPEAKER_04: Okay, so you you actually couldn't come in on a non-lucrative visa and then credibly argue that you should be under the Beckham regime tax-wise.
16:47
SPEAKER_00: You could, however, you would need to shift your residency first, right?
16:51
SPEAKER_00: Because it's like you'll you'll fail one of one or the other requirement.
16:54
SPEAKER_00: So you could enter as on a non-lucrative, then shift to a different type of resident permit, and then attempt Beckham law.
17:00
SPEAKER_00: It's it's not as straightforward as a digital nomad visa.
17:04
SPEAKER_04: Right, right.
17:06
SPEAKER_04: Um there's been a uh Supreme Court ruling recently that says uh, well, so so tell me what it used to be in the past.
17:16
SPEAKER_04: In the past, it used to be that if you had a Spanish residence permit, you needed to stay most of the year in Spain.
17:23
SPEAKER_04: Uh that was the requirement, right?
17:25
SPEAKER_04: That's what they were asking for.
17:26
SPEAKER_00: Well, it depends on which resident permit you were talking about, right?
17:29
SPEAKER_00: So there's different types of residence permits.
17:31
SPEAKER_00: And I think in terms of the ruling that we recently had, it pertains mainly to temporary resident permits, which would be digital nomad, non-lucrative, or even the golden visa.
17:40
SPEAKER_00: The golden visa is something that I would urge you to not think about at this moment because the golden visa actually has no minimum visit or stay requirement.
17:48
SPEAKER_00: So even though technically it is a temporary permit, this does not apply.
17:52
SPEAKER_00: Um, so what they actually said, right, was that the question raised to the high court, or let's say the Tribunal Supremo, I think, was that is the is it grounds for someone to be immediately revoked, or let's say an automatic like denied renewal if someone was living outside of Spain for more than six months?
18:12
SPEAKER_00: That was the question that was raised to the High Court.
18:14
SPEAKER_00: And they said no.
18:16
SPEAKER_00: They basically said the reason is this was established by a ruling and not a law.
18:20
SPEAKER_00: So under again, to confuse everybody about how Spain works is that there are laws, right?
18:25
SPEAKER_00: So let's say there's there's the spirit of how things are supposed to be governed, and then there's decrees or there's rulings, Real Decretos, and that's let's say the form, how things are implemented and executed.
18:36
SPEAKER_00: So what the Tribunal Supremo actually said is that this saying that you must be living in Spain for six months in order to be eligible for renewal or to maintain, let's say, your temporary residence, cannot be governed by a ruling as it is now, but must be put into law.
18:53
SPEAKER_00: So that's they were very clear on this.
18:55
SPEAKER_00: And thus they even want to say that that Spain cannot limit the freedom of movement of foreigners.
19:00
SPEAKER_00: So, as it is right now, there's actually been a lot of law firms that have issued press releases that effectively that if someone were to be denied, let's say, a renewal because they haven't been living in Spain for six months, that this is now a strong case for an appeal, which would most successfully be granted.
19:17
SPEAKER_00: Now, in the future, do we see that this could be put into law?
19:20
SPEAKER_00: Perhaps, but with what government?
19:23
SPEAKER_00: Going back to your question of the government that currently doesn't exist first needs to propose the law, et cetera.
19:28
SPEAKER_00: And this is going to take that.
19:30
SPEAKER_04: That's right.
19:31
SPEAKER_04: Yeah, you first need people to shuffle into that big room and the Congresa diputados.
19:36
SPEAKER_04: Yeah.
19:37
SPEAKER_04: Um now, if you have uh golden visa, you say there was it was never a requirement anyway, uh, for you to remain 183 days a year.
19:48
SPEAKER_04: That's correct.
19:49
SPEAKER_00: So this is oh, sorry, please go ahead.
19:52
SPEAKER_04: But but for purposes of eventually obtaining a permanent status, there was still a requirement.
19:58
SPEAKER_04: Can you tell us a little bit about like has that has that changed at all, or is it the same as before?
20:04
SPEAKER_04: It hasn't changed at all.
20:05
SPEAKER_00: So but I do want to be clear because I think the reason why a lot of people ask this question is is a question that I think you're going to ask me in just a second.
20:12
SPEAKER_00: So, at least with how the Spanish Golden Visa works, right?
20:15
SPEAKER_00: So the RBI program is that you're absolutely right.
20:17
SPEAKER_00: Under the Golden Visa law in Spain, there is absolutely no minimum visit nor residence requirement to maintain residency.
20:25
SPEAKER_00: I want to be very clear.
20:26
SPEAKER_00: As it is right now.
20:27
SPEAKER_04: To maintain temporary residency.
20:29
SPEAKER_00: Exactly, to maintain temporary residency.
20:31
SPEAKER_00: Now, what that is, it's a three-year permit, extendable and renewable for every five.
20:35
SPEAKER_00: So year three, year eight, thirteen.
20:37
SPEAKER_00: And the main requirement to maintain this residency is maintaining a qualifying asset.
20:42
SPEAKER_00: And with that, you have all the rights and privileges of residency in Spain.
20:46
SPEAKER_00: Now, however, you're right that in order to then qualify for permanent residency in Spain, you would need to actually reside here.
20:54
SPEAKER_00: The reason why a lot of our clients ask this, or at least friends ask this, is because ultimately the question they're asking is, can I get a Spanish passport?
21:02
SPEAKER_00: And this is where it becomes important to understand why permanent residency doesn't actually apply to some people.
21:09
SPEAKER_00: In the first instance, if you are from a former colony, and including some others that were technically not colonies, so let's say all of Latin America plus the Philippines, you only need two years of residency, let's say through the Golden Visa or temporary residence to apply for to qualify for citizenship.
21:25
SPEAKER_00: This is even before you would even qualify for permanent residence.
21:29
SPEAKER_00: So permanent residence is never not, is not even in your purview, shall we say.
21:33
SPEAKER_00: The other thing though is for those that are not on the two-year track, and rather the 10-year track, let's say the rest of the world, right?
21:41
SPEAKER_00: And very importantly, and listen very carefully, it is not required for you to first be a permanent resident to then apply for nationality.
21:48
SPEAKER_00: So Spain does not require that if you're first a permanent resident to then apply for citizenship.
21:53
SPEAKER_00: You can absolutely go from a temporary resident permit like the Golden Visa, like the non-lucrative, like the Novak.
22:00
SPEAKER_00: Etc.
22:00
SPEAKER_00: And then directly apply to citizenship.
22:03
SPEAKER_04: But uh are there no residence requirements, so physical presence requirements that count towards citizenship?
22:10
SPEAKER_04: This is a question that gets raised multiple times, and I'm so so so let's say let's say Christa, I I go and I'm you know, I am never more than three months a year in Spain on my golden visa.
22:24
SPEAKER_04: And I keep renew so the initial one that I get is two years and then I renew for three years at a time, right?
22:30
SPEAKER_00: And I keep three and then five at a time.
22:32
SPEAKER_04: Okay, so it's three and three plus five plus five plus five.
22:36
SPEAKER_04: So exactly.
22:37
SPEAKER_04: I do three and then five, and another uh renewal at five years, and then eight, thirteen, correct.
22:49
SPEAKER_04: In year three, in year eight, um, and I reach year ten and I can apply for citizenship.
22:57
SPEAKER_04: Now I've only been three months out of the year in Spain.
23:01
SPEAKER_04: Won't they ask me, you know, for some more presence?
23:04
SPEAKER_04: Uh didn't I have to be a tax resident, for example?
23:07
SPEAKER_00: Oh, that's an interesting question.
23:08
SPEAKER_00: I glad you I'm glad you raised that.
23:10
SPEAKER_00: The answer is, well, you're not gonna like the answer.
23:13
SPEAKER_00: The answer is it depends.
23:15
SPEAKER_00: So it's important to note that the governing body that confers nationality is not the same governing body that confers the golden visa.
23:22
SPEAKER_00: So the governing body that confers nationality is the DGRN.
23:26
SPEAKER_00: I don't actually remember the spelt-out version of it, but it's the DGRN.
23:30
SPEAKER_00: What's important is that under the law, and that's the only thing that's in the law, is that you know, certain individuals are eligible to apply for nationality after X number of years of continuous residency.
23:41
SPEAKER_00: And this is very important, right?
23:43
SPEAKER_04: So for those from Continuous residency.
23:45
SPEAKER_00: For those from former colonies, it's stated as two years.
23:49
SPEAKER_00: Rest of the world, it's 10 years.
23:51
SPEAKER_00: Here's the most important part the DGRN has changed its interpretation of continuous residency over time.
23:59
SPEAKER_00: In the past, what we found is they were a lot stricter with this 183 days, you know, rule that everyone has gone accustomed to.
24:07
SPEAKER_00: And in many ways, they're right.
24:09
SPEAKER_00: Recently, however, the ruling has stated that for them, continuous residency has more to do with, has less to do rather with the physical presence or absence of the applicant, but rather more to do with their affinity to Spain, ties to Spain, right?
24:26
SPEAKER_00: Professionally, we have to say that your strongest tie to Spain is still actually being in Spain.
24:31
SPEAKER_02: Right.
24:31
SPEAKER_00: So it is kind of like a non-issue.
24:34
SPEAKER_00: I have to mention that anecdotally, we've seen many applications where the physical, let's say, aspect of it was a lot less important, is probably what I'm trying to say.
24:44
SPEAKER_00: And applications were approved anyway.
24:47
SPEAKER_00: Regardless, what we say is for those on the two-year track, do not have a single absence more than three months in the qualifying period.
24:55
SPEAKER_00: And for those in the 10-year track, no single absence more than six months in the previous five-year period.
25:02
SPEAKER_00: According to the interpretation we have now.
25:05
SPEAKER_00: But there's one one very important thing, Christian, and I want to I want to make this part very clear, and I hope you know nobody hears this and decides to change the law.
25:12
SPEAKER_00: Under the requirements of citizenship, or when you apply, the document you need to submit is that you do not owe taxes to the hacienda.
25:20
SPEAKER_00: It's basically a certificate saying that you don't owe taxes.
25:23
SPEAKER_00: It is not a certificate that you are a tax resident.
25:26
SPEAKER_00: So be very clear, it is not required for you to be a tax resident in order to apply for citizenship, just that you don't owe taxes to Spain.
25:34
SPEAKER_04: Right.
25:36
SPEAKER_04: So theoretically, you know, because what everybody is looking for in this market is where can I get a path to citizenship that requires minimal physical presence from me?
25:50
SPEAKER_04: This is what was behind much of the success of Portugal, right?
25:53
SPEAKER_04: You could get uh citizenship after five years, with you know, after having spent a total of 35 days in Portugal over the last five years, right?
26:03
SPEAKER_00: At least that's what's marketed.
26:05
SPEAKER_04: That's what's marketed, and yeah, but we have to say, you know, we've we've confirmed a number of cases where that worked out.
26:11
SPEAKER_04: Um I'm not saying it's gonna work out in every case, but but you're saying in Spain, you know, out of an abundance of caution, you are, you know, as a as a private company, you're telling your clients, hey, this is what we would recommend in terms of minimal presence requirement.
26:29
SPEAKER_04: And it's it's quite you said uh no absence of more than three months uh if you're on that two-year track.
26:35
SPEAKER_02: Yes.
26:35
SPEAKER_04: Uh, and no absence of more than six months at any given in any given year if you're on the tenure.
26:41
SPEAKER_00: No, at least the the the previous five years.
26:43
SPEAKER_00: And the big discussion.
26:44
SPEAKER_04: But could you be let could you be 180 rather than 183 days a year in Spain?
26:50
SPEAKER_04: Do you see what I mean?
26:51
SPEAKER_00: Even less than that.
26:52
SPEAKER_00: I I mean at least the cases we've seen are even less than that.
26:55
SPEAKER_00: Similar to, I guess, the the example you stated, it's it's a case-by-case basis.
26:59
SPEAKER_00: And I can confirm that we've seen many applications where that physical requirement was a lot less and it was successfully approved.
27:07
SPEAKER_00: And and the other thing I want to mention.
27:09
SPEAKER_04: Citizenship in the end without without being Spanish tax residents.
27:13
SPEAKER_00: Correct, correct.
27:14
SPEAKER_00: And and again, you're not required to be a tax resident in order to apply for citizenship.
27:18
SPEAKER_00: This is the I understand that let's say the criteria are overlap, but there's no requirement stating you have to be a tax resident in in order to obtain citizenship.
27:26
SPEAKER_04: I know I understand that, but I always assume that in those countries that say, okay, you need to be here at least 183 days a year, they were saying that because they wanted them to become tax residents, right?
27:36
SPEAKER_00: So there is a subtle implication, but that's not actually what's done in practice based on what we've seen.
27:42
SPEAKER_00: And and the other thing I wanted to really emphasize is because, as we mentioned, it's not about what's just in the law, but also how it's interpreted.
27:49
SPEAKER_00: So this could change over time.
27:50
SPEAKER_00: Is this what we're seeing now, which is a more relaxed version of what we saw in prior years?
27:56
SPEAKER_00: Who's to say if it will be stricter or more relaxed in the years to come?
28:00
SPEAKER_00: Part of the reason too is, and I guess if I were to comment on this, we're not particularly upset with how you know how Spain is handling this because we also feel that part of the reason is Spain has never been advertised as a CBI program.
28:14
SPEAKER_00: And I think that's also part of the reason why it's been able to evade, or let's say not evade, avoid some of the angrier, you know, critics.
28:23
SPEAKER_04: Yeah.
28:24
SPEAKER_04: Yeah, I I think I think that's the case.
28:27
SPEAKER_04: They've kind of been able to fly under the radar.
28:30
SPEAKER_04: Uh, it's really when it comes to real estate that people seem to have an issue with it.
28:34
SPEAKER_04: Correct.
28:35
SPEAKER_04: So I'm curious about your model.
28:37
SPEAKER_04: At Orients, you do things a little bit differently when it comes to the uh business investment option for the Golden Visa, right?
28:44
SPEAKER_04: You're able to somehow tie that into uh what is it, franchises or uh local bricks and mortar businesses, retail, yeah?
28:52
SPEAKER_04: Tell me a little bit about that model and why it why it's interesting.
28:56
SPEAKER_00: Yeah, uh thanks, Christian.
28:57
SPEAKER_00: So, you know, well, part of the history of of how this this project came up was, well, at Orient, we are we do specialize in the Spanish program and we've helped many, many clients obtain their golden visas or other residencies.
29:10
SPEAKER_00: Um, one of the things we've noticed is that, you know, in recent years, a lot of our clients were debating between Spain and another program because they were, they had a little bit of a sticker shock.
29:20
SPEAKER_00: They they felt that the Spanish program was a little bit too expensive.
29:22
SPEAKER_00: And we said, okay, well, I can't change the law.
29:25
SPEAKER_00: Of course we can't do that, but maybe we can make it more palatable.
29:28
SPEAKER_00: So we found solutions to figure out if we could solve this problem for our clients.
29:33
SPEAKER_00: And we found an opportunity in in commercial real estate.
29:36
SPEAKER_00: Um, and we actually do it through, let's say, our sister company.
29:39
SPEAKER_00: So, Orion, strictly speaking, is a service company, but with this with the same partners, I'd say we have an investment arm as well.
29:46
SPEAKER_00: And we saw an opportunity in commercial mainly because of the economics of the play.
29:50
SPEAKER_00: In Spain, when you buy a commercial asset, the transfer taxes are lower compared to residential asset.
29:56
SPEAKER_00: So putting that into numbers, if you were to buy an apartment in Madrid, the transfer tax of that would be 6%.
30:02
SPEAKER_00: An apartment in Barcelona would be 10%, but a commercial asset in Madrid would be 1.5%.
30:08
SPEAKER_00: That is a pretty big incentive.
30:10
SPEAKER_04: Wow, yeah.
30:11
SPEAKER_04: I remember when I bought I bought an apartment in Madrid in 2019, and I remember being shocked at the round trip transaction costs on that.
30:19
SPEAKER_04: Yeah, it was such a huge chunk of the play, right?
30:23
SPEAKER_00: And commercial real estate as well has other features where tenants typically sign very long-term leases, usually 10 to 15 years.
30:30
SPEAKER_00: Commercial yields are also higher.
30:31
SPEAKER_00: Let's say currently they're about five, five and a half, whereas residential uh yields are lower.
30:36
SPEAKER_00: So having said that.
30:37
SPEAKER_04: And there's no risk, there's no risk of uh commercial ocupas, I guess.
30:44
SPEAKER_00: There's a much lower risk of commercial occupas, right?
30:46
SPEAKER_00: And it's a lot easier to evict a non-paying tenant in the case of commercial leases if we're going down that path.
30:52
SPEAKER_00: Well, so we saw an opportunity here and said, okay, great.
30:55
SPEAKER_00: We had a lot of clients actually that were already interested in investing commercial real estate and who are buying, let's say, these 500k plus assets anyway, as their compliance asset, as it were, for the golden visa.
31:05
SPEAKER_00: Where we took this a step further and said, okay, well, we already like these assets.
31:10
SPEAKER_00: We believe in the business model, we believe in Spain, we like the economy.
31:14
SPEAKER_00: Let's figure out how to make this easier.
31:16
SPEAKER_00: We said, okay, for a special class of our commercial assets, we'll offer them a lease back option.
31:21
SPEAKER_00: So call it whatever you want.
31:22
SPEAKER_00: What we're doing is on day one, the same day that you're purchasing an asset, you are also getting paid up front for the next 10 years of rent.
31:29
SPEAKER_00: Right now, equivalent to about 3% yield, but all paid up front.
31:33
SPEAKER_00: That effectively lowers the cost of your initial investment.
31:36
SPEAKER_00: For the next 10 years, we are then effectively, let's say it's a management sublease, right?
31:41
SPEAKER_00: So I then make that spread between the actual rent and the rent that I've paid you.
31:45
SPEAKER_00: But we also build in a buyback option on year 10, should you wish to exercise that, or you just make the rent yourself or even run it yourself if you want to on year 10.
31:54
SPEAKER_02: Right.
31:55
SPEAKER_00: This, I think, if the economics right now, let's say I'll give you some numbers, let's say you buy an asset that's typically 500,000 and you're paid up front 150, that effectively brings your net investment to 350,000, which rivals, let's say, many of its uh neighboring programs in Spain.
32:11
SPEAKER_04: Okay, I see.
32:12
SPEAKER_04: Yeah, it's a very clever model.
32:14
SPEAKER_04: And and it and it works, it works for the LECI as well, right?
32:18
SPEAKER_04: For you guys because you're leasing it back immediately at at below uh the rates you would otherwise have to pay, right?
32:25
SPEAKER_04: Yeah, correct.
32:25
SPEAKER_00: And in the economics of this, um some people have asked me, like, what's the catch?
32:28
SPEAKER_00: You know, why does this work for you guys?
32:30
SPEAKER_00: You know, what's in it for you?
32:31
SPEAKER_00: It's like, well, I'm effectively leasing it at 3%, but the yield I'm probably making is five.
32:35
SPEAKER_00: So I am making that spread, and or otherwise it wouldn't make sense for us.
32:39
SPEAKER_04: Yeah.
32:40
SPEAKER_04: Yeah, yeah, but less headache for the client, right?
32:43
SPEAKER_04: It's totally hands-off for the client, and I mean the risk is entirely removed.
32:48
SPEAKER_00: Absolutely.
32:48
SPEAKER_00: And it's basically a Spanish golden visa at, let's say, an effectively lower investment than you would have anticipated.
32:55
SPEAKER_00: But again, it's all freehold.
32:56
SPEAKER_00: The asset is yours 100%.
32:58
SPEAKER_00: There's no lien on the property.
32:59
SPEAKER_00: You still enjoy all the benefits of the visa, no minimum visit.
33:02
SPEAKER_00: I mean, I don't have to see you until year three, year eight, thirteen anyway, right?
33:06
SPEAKER_04: Yeah, incredible.
33:08
SPEAKER_04: Um and and where are your clients from?
33:12
SPEAKER_04: Because this is one thing that in the even back when they did publish Spanish Golden Visa statistics, they would only typically mention the top two, top three.
33:22
SPEAKER_04: Uh it was always, you know, number one was Chinese, number two was Russian, and every once in a while they'd mention some Venezuelans.
33:30
SPEAKER_04: Um but what's the I mean, because you are in the thick of it, you are involved, right?
33:36
SPEAKER_04: You talk to clients, you you do hundreds of cases a year.
33:39
SPEAKER_04: Who are the um is it still China, Russia?
33:44
SPEAKER_04: Obviously, is it closed now to the Russians?
33:47
SPEAKER_00: So no, Spain never closed to Russians.
33:49
SPEAKER_00: Spain, this is an advertisement, right?
33:52
SPEAKER_00: Spain is absolutely.
33:53
SPEAKER_04: This is what you mean, but when they say you know they've been able to stay off the radar somehow, the standards, right?
33:59
SPEAKER_04: Like everybody else has been pressured into dropping Russians, and here we go.
34:03
SPEAKER_04: Spain golden visa is still open to Russians.
34:05
SPEAKER_00: Absolutely, Spanish Golden Visa is still open to Russians.
34:07
SPEAKER_00: Obviously, you know, I guess there's let's say a heightened compliance requirement for Russians, but as the program itself granting resident permit, there's no restrictions for Russians.
34:15
SPEAKER_00: In fact, we've successfully processed many applications recently from Russian nationals.
34:20
SPEAKER_00: To your question, I mean, I can only tell you what we see, at least at Orient's.
34:24
SPEAKER_00: Um, we still see a considerable number of Chinese applications.
34:27
SPEAKER_00: This actually paused a bit during COVID, but they definitely returned with a vengeance.
34:31
SPEAKER_00: But Latin America has come back definitely with a vengeance, and I think I'd extend that to all former colonies.
34:38
SPEAKER_00: And I think in terms of educating the market, and once they realize the additional benefits that they would have because of that affinity to Spain, they just flocked to the program.
34:48
SPEAKER_00: And not just a little media.
34:49
SPEAKER_04: They don't know about that uh fast track, two-year fast track?
34:53
SPEAKER_04: Like in in Manila, people aren't aware that they can go and live two years in Spain and get citizenship?
34:58
SPEAKER_00: I mean, be careful to say they don't know about it.
35:00
SPEAKER_00: I think some refuse to believe it because it sounds too good to be true.
35:03
SPEAKER_00: And I'm like, well, it's not really, because there's other things you need to do, right?
35:06
SPEAKER_00: Um but but others, so some are, I think, let's say, suspicious of it, and we say, no, it's absolutely legitimate.
35:11
SPEAKER_00: This this happens in practice.
35:13
SPEAKER_00: Um, and others maybe have have been marketed other programs and and have this idea or was just have a negative bias towards Spain when in reality I would I I'm very I'm strong on this point saying if you were from a former colony, I still think the Spanish program is one of the best ones for you.
35:30
SPEAKER_00: I'm not saying it's the best for everybody, but if you are from a former colony, I would definitely make sure to at least look at the Spanish program and not necessarily the golden visa, it can be the digital nomad visa or the non-ducrative even.
35:43
SPEAKER_04: Yeah, that's another thing.
35:45
SPEAKER_04: Like if you are looking for ultimately getting the citizenship of Spain, uh it means you're gonna have to go and live there for two years if you're from a former colony.
35:55
SPEAKER_04: Uh and if you have to be there physically present anyway, you don't actually have to invest to get your visa, right?
36:02
SPEAKER_04: Like investing to get your visa, you know, primarily it's for people who who want the uh immigration status without having to be physically present necessarily.
36:12
SPEAKER_02: Correct.
36:12
SPEAKER_04: Uh but if you are willing to be physically present, which you would have to be to eventually get citizenship, then you might as well go on a non-lucrative digital nomad.
36:22
SPEAKER_04: Yeah.
36:22
SPEAKER_00: Correct.
36:23
SPEAKER_00: And and I think you know, usually when we talk to clients who are from former colonies, we we remind them that it's a two-year project.
36:28
SPEAKER_00: So they can plan accordingly.
36:30
SPEAKER_00: In fact, you know, time could fly.
36:32
SPEAKER_00: A lot of our clients come here on the non-lucrative and study a program.
36:36
SPEAKER_00: And so it's not about just you know banking the days, but actually doing something productive with their time.
36:41
SPEAKER_00: And you're absolutely right.
36:43
SPEAKER_00: And one of the things, too, to note is that this two-year requirement, it doesn't have to be exercised in two years and never again.
36:49
SPEAKER_00: It's something that will be available to you anyway.
36:51
SPEAKER_00: So if you are trying to look at it as a closed project, then yes, it is to your benefit to apply on two years and one day.
36:57
SPEAKER_00: But for others, sometimes they'll do the golden visa thinking that on year seven, maybe they'll attempt an application for the citizenship.
37:03
SPEAKER_00: It's not something that they have to do right now.
37:06
SPEAKER_00: Under the Spanish at least requirements for citizenship, there's no limit to the number of times you can apply.
37:11
SPEAKER_00: I'm not saying that you should make this your life's work, but you know, for whatever reason, if you were denied an application, you can absolutely apply again.
37:19
SPEAKER_04: And and how how long is the process?
37:21
SPEAKER_04: Because that's another question, right?
37:22
SPEAKER_04: One thing is okay, year two, you become eligible for citizenship.
37:26
SPEAKER_04: Doesn't mean you get the citizenship right away.
37:28
SPEAKER_04: Um, yeah.
37:31
SPEAKER_04: Yeah, that's the same everywhere.
37:33
SPEAKER_04: That's the same everywhere.
37:34
SPEAKER_04: Uh it's the same in Portugal.
37:36
SPEAKER_04: I know uh one of the bottlenecks in Portugal is uh getting an appointment to take that uh Portuguese test.
37:42
SPEAKER_04: That can be that can be uh a choke point for for that program.
37:47
SPEAKER_01: Yeah.
37:47
SPEAKER_04: Um so what what what's happening in Spain?
37:50
SPEAKER_04: Is it uh I know for for the Golden Visa, you know, they have to answer you.
37:54
SPEAKER_04: This is the law of um positive silence.
37:56
SPEAKER_01: Positive silence.
37:57
SPEAKER_04: Positive silence.
37:58
SPEAKER_04: So they have to answer you within 20 days.
38:00
SPEAKER_04: Is there something like that at the citizenship stage as well, or is that different?
38:05
SPEAKER_00: So I think I say this for for most European countries, they're not really incentivized to be giving out passports.
38:10
SPEAKER_00: You know, everyone anyone who is telling you that is is I don't know where they get information from.
38:14
SPEAKER_00: But um, what we're seeing in practice is there's no no delays in being able to get appointments for for the exams.
38:21
SPEAKER_00: So at least for the Spanish citizenship one, you also have to pass the eight to dele.
38:24
SPEAKER_00: You could take an exam tomorrow.
38:26
SPEAKER_00: There's exams everywhere in Spain and also everywhere in the world through the Instituto Cervantes.
38:31
SPEAKER_00: Um in terms of the application itself, what we're seeing, or at least an expectation, is we tell our clients one and a half years is a good average.
38:38
SPEAKER_00: We've seen applications approved in 13 months, we've also seen them done in 18 months.
38:42
SPEAKER_00: So, and again, this is for citizenship, right?
38:44
SPEAKER_00: Golden visa is 20 days or less.
38:46
SPEAKER_00: Um so that's kind of like what we're seeing now as an average, which I mean I think is par further course for for similar programs.
38:54
SPEAKER_04: I uh asking because I have a personal interest in this, I'm I'm married to a Spanish national.
39:01
SPEAKER_04: Uh I have lived in Spain for more than you know, I lived in Spain for like four years with her.
39:07
SPEAKER_04: So technically I could apply for citizenship uh in Spain, couldn't I being married to her if I lived there, right?
39:15
SPEAKER_00: Technically, you should have done it.
39:16
SPEAKER_00: Um I I want to say that you're supposed to do it immediately preceding that period.
39:20
SPEAKER_00: So you actually could have only you only needed one year.
39:23
SPEAKER_00: So for those that are married to a Spanish national, you only need one year.
39:27
SPEAKER_00: But I think that the requirement has to be that you apply for it immediately immediately succeeding it.
39:32
SPEAKER_00: That you can't say, well, I lived there 10 years ago, can I apply now?
39:35
SPEAKER_04: I will check for you, but I want to say that yeah, sorry, but could couldn't couldn't I go back in a couple years with my wife and we settle in Spain and then after one year I apply, right?
39:46
SPEAKER_00: Yes, and this is for all nationalities.
39:48
SPEAKER_04: Part of the reason I didn't do it is um first of all, I was leaving Spain and I didn't want people to think uh I didn't want Hacienda to think I mean it I was arguing toward Hacienda, look, I'm I'm leaving the country, I'm becoming tax resident of Portugal.
40:03
SPEAKER_04: Uh if I at the same time were to apply for citizenship in Spain, that would kind of weaken that argument, right?
40:09
SPEAKER_04: So I decided not to do it.
40:11
SPEAKER_04: Uh but the other reason is there was some it was a bit unclear to me Spain's stance on multiple citizenship.
40:18
SPEAKER_04: So I understand dual citizenship is fine, uh but there are some stipulations or not.
40:25
SPEAKER_00: Yes, so Spain has dual nationality treaties with several countries.
40:29
SPEAKER_00: I don't have the exact list right now, but there are a lot of countries where it explicitly recognizes dual nationality and there's no issue.
40:36
SPEAKER_00: Um for others, I guess the answer here is it's it's unclear, right?
40:40
SPEAKER_00: So what we see in practice is that when you do the citizenship oath, you know, they do recognize, or at least the applicant has to certify that yes, I they my intention is to, let's say, rescind or revoke ex-nationality.
40:53
SPEAKER_00: Now, whether or not they actually do that is not really Spain's prerogative, right?
40:57
SPEAKER_00: It's it's usually the issuing country that has the authority to actually take back a citizenship.
41:03
SPEAKER_00: So it's one thing for Spain to say you need to sign that you're going to do this, it's another thing for Spain to be able to actually do that or make you do that, or to compel the applicant to do it.
41:12
SPEAKER_04: So you're saying in practice you can have multiple, more than two citizenships uh, you've seen many, many applicants do this, yes.
41:21
SPEAKER_00: But again, this is we we we are we remind them that there does there does carry some degree of risk and that they're aware that look, you you are playing in a very gray area of the law here, but you know, you have to manage your own life.
41:34
SPEAKER_04: So we say that but what what what is the risk?
41:37
SPEAKER_04: What is the risk exactly?
41:39
SPEAKER_00: I mean, so we always in a worst case scenario.
41:41
SPEAKER_04: In a worst case scenario, what happens?
41:43
SPEAKER_04: Spain revokes its citizenship from you?
41:46
SPEAKER_00: That could be the worst case scenario because Spain doesn't have the power really to revoke someone else's citizenship.
41:50
SPEAKER_00: That's just not how sovereign countries work, right?
41:53
SPEAKER_00: So the worst thing that Spain can do is revoke its own citizenship, but it cannot revoke another sovereign country's citizenship.
41:58
SPEAKER_00: It just doesn't work.
41:59
SPEAKER_04: No, obviously.
42:00
SPEAKER_04: Yeah.
42:01
SPEAKER_04: Uh but why would it do that?
42:03
SPEAKER_00: It would do that if you got citizenship in a country with which Spain does not have uh recognition of dual citizenship treaty or I would almost say that more than that, it's more of a maybe a relationship where a hostile relationship, right?
42:19
SPEAKER_00: So if Spain has a friendly relationship with a country, at least what we see in practice is we've we've never really seen this being done, right?
42:27
SPEAKER_00: You know, being a passport being taken away or anything like that.
42:30
SPEAKER_00: But I would say that maybe there'd be a heightened level or a heightened sense of vigilance when it comes to a national of a country where Spain has a hostile relationship or no relationship at all.
42:40
SPEAKER_04: Ah, okay, so what country might that be, for example?
42:45
SPEAKER_00: I don't know, Christian.
42:45
SPEAKER_00: I don't know what it's like.
42:48
SPEAKER_04: Like Russia, Iran.
42:50
SPEAKER_04: I don't know.
42:51
SPEAKER_00: You can you can imagine.
42:52
SPEAKER_00: But what I'm saying is countries where Spain prefers not to have uh close ties, perhaps they would be more hostile.
42:58
SPEAKER_00: But those that are in neutral ground or have friendly ties, we've never really seen this in practice, where they go and say, Well, give me back your passport.
43:04
SPEAKER_00: They can't do that.
43:05
SPEAKER_00: I mean, again, they they have no power to take away another sovereign's citizenship.
43:10
SPEAKER_04: Right.
43:11
SPEAKER_04: So us Norwegians, we should be alright, I guess.
43:15
SPEAKER_00: I think you guys are okay.
43:16
SPEAKER_00: I think you're generally liked.
43:18
SPEAKER_00: There was a time in the past that you weren't.
43:21
SPEAKER_00: Was there?
43:21
SPEAKER_04: Oh yeah.
43:22
SPEAKER_04: Yeah, like a thousand years ago, right?
43:24
unknown: Yeah.
43:24
SPEAKER_04: Yeah.
43:25
SPEAKER_00: But I think you're generally okay now.
43:28
SPEAKER_04: Yeah.
43:28
SPEAKER_04: All right.
43:29
SPEAKER_04: Um, anything else that we that you'd particularly like to cover that we haven't covered so far?
43:35
SPEAKER_00: No, I mean, maybe I I I'm happy to talk a little bit about real estate.
43:39
SPEAKER_00: I can give you some comments because the thing is, a lot of people have this like misconceived notion that golden visa is like destroying the real estate market.
43:46
SPEAKER_00: I have some opinion and stats on that.
43:47
SPEAKER_00: If you want to ask the question, I can answer it.
43:49
SPEAKER_00: Yeah.
43:50
SPEAKER_04: Yeah, yeah.
43:51
SPEAKER_04: So in a lot of golden visa destination countries, what happens is uh the i the image is that rich farm.
44:00
SPEAKER_04: Foreigners come in, they speculate, invest in real estate, drive up the prices.
44:05
SPEAKER_04: Of course, I always say you know, rich foreigners wanting to invest in your country is a good thing.
44:11
SPEAKER_04: Don't try to stifle the demand, try to increase the supply instead, right?
44:17
SPEAKER_04: So well welcome that capital.
44:19
SPEAKER_04: Uh, because you know, you should consider yourself fortunate as a country if rich foreigners want to invest in you.
44:25
SPEAKER_04: Um but what we see a lot of the time is that those foreign investors become demonized and they become um they get they get the blame for uh shortage of housing, for example, here in Portugal.
44:38
SPEAKER_04: You know, people tend to forget that shortage of housing may have more to do with things like a lack of appropriate zoning laws for residential real estate or building permits aren't issued with the alacrity that maybe they should.
44:53
SPEAKER_04: In Spain also we saw attempts, at least from from Mazpaís, at uh pinning the blame on uh unaffordable housing on golden visa investors, which is uh preposterous, I would say, considering the the the small number of golden visa investors relative.
45:12
SPEAKER_04: I mean, in Portugal, even in Portugal, we're talking like 0.6% of foreign investors are uh or foreign buyers are are golden visa, but in Spain it must be even lower.
45:23
SPEAKER_04: So maybe you have some numbers on this?
45:25
SPEAKER_00: Yeah, so no, you're thanks for sharing that.
45:27
SPEAKER_00: And you're right, and I think you know it's it's it's convenient, is probably the word, right?
45:31
SPEAKER_00: So it's convenient for for political parties like Mespais and and many others to use a scapegoat, you know, of someone that they that can't really respond, right?
45:40
SPEAKER_00: So that's of those that can't represent themselves in in in the discussion.
45:44
SPEAKER_00: Um what I can tell you is yes, this idea that Golden Visa is destroying the markets, taking homes away from locals and all that is is quite unfounded.
45:53
SPEAKER_00: And and at least in 2022, the numbers show a very, very different picture.
45:57
SPEAKER_00: So from the Spanish land registry, right?
45:59
SPEAKER_00: So from a pretty good authority on this, there were 646,000 transactions in Spain last year pertaining to real estate.
46:08
SPEAKER_00: And of this, uh, 94,000 were attributed to foreign buyers.
46:12
SPEAKER_00: And this is a very important thing.
46:13
SPEAKER_00: So let's say 14 to 15 percent of transactions last year were attributed to foreign buyers, the majority of which were other Europeans.
46:21
SPEAKER_00: And guess what?
46:21
SPEAKER_00: Other Europeans don't need golden visas.
46:23
SPEAKER_00: So golden visa is not trying, you know, destroying the market.
46:27
SPEAKER_00: And again, if you if you overlap that with the number, whether it's a thousand, whether it's two thousand of new applications for golden visa, you're right.
46:34
SPEAKER_00: This is not even a blip in the market.
46:36
SPEAKER_04: No, we're talking like one one in 500, one in 600, uh something like this, right?
46:42
SPEAKER_04: Yeah.
46:42
SPEAKER_00: Correct.
46:42
SPEAKER_00: And you're right, I agree with you.
46:44
SPEAKER_00: Foreign foreigners buying real estate in your country is a good thing.
46:47
SPEAKER_00: And and the the other question that we get asked is well, well, Spain can stop, let's say, foreigners buying assets.
46:53
SPEAKER_00: Unfortunately, that's unconstitutional, right?
46:56
SPEAKER_00: And that's against the law in Spain.
46:58
SPEAKER_00: I think that's against the law in the European Union.
47:00
SPEAKER_00: So you can't just stop foreigners from buying more assets in Spain, unfortunately.
47:04
SPEAKER_00: Or fortunately.
47:05
SPEAKER_04: No, you can't.
47:06
SPEAKER_04: You can't yeah, that's fortunate because look, just if you're worried about the price of assets going up, then put more assets on the market, right?
47:14
SPEAKER_04: Build more.
47:16
SPEAKER_00: Other market factors.
47:17
SPEAKER_00: It's not about foreigners coming here and investing money in your country.
47:20
SPEAKER_04: That's right, that's right.
47:21
SPEAKER_04: And what are you seeing for the Spanish Golden Visa right now?
47:25
SPEAKER_04: What are the primary destinations?
47:26
SPEAKER_04: I know back when they were still releasing statistics, it was all about uh Catalunya, primarily Barcelona.
47:34
SPEAKER_04: Um, there was uh Costa del Sol, so Malaga region, and then Madrid.
47:40
SPEAKER_04: Are those still the big three?
47:42
SPEAKER_00: Absolutely.
47:42
SPEAKER_00: 80% of golden visas are in the places you describe.
47:45
SPEAKER_00: It's Madrid, Barcelona, Malaga, the Balearics.
47:48
SPEAKER_00: 80% of Golden Visa are there.
47:50
SPEAKER_00: And I think I think that also overlays with just like foreign buyers in general, right?
47:54
SPEAKER_00: So if 80% of the golden visas are buying there, you could also say that most of the other foreigners are also buying there.
48:00
SPEAKER_04: Right.
48:01
SPEAKER_04: That's true.
48:02
SPEAKER_04: Um you see that any of those regions or any are there any up-and-coming regions like the Basque Country or Asturias or any of these?
48:10
SPEAKER_04: I mean, because among the Spanish, you know, the Span the Spaniards prefer different regions than us foreigners.
48:18
SPEAKER_04: Like the foreigners who come to Spain, they go to those three areas.
48:22
SPEAKER_04: But the Spaniards themselves have a certain appreciation for uh San Sebastian, for Asturias, for for uh Galicia, you know, uh but among foreigners not so much, huh?
48:35
SPEAKER_00: Well, actually, you know, maybe it's it you're looking at it the other way.
48:38
SPEAKER_00: I'm saying that just because there's there's a higher demand in other areas, it doesn't mean that those areas don't get demand.
48:44
SPEAKER_00: We absolutely have a lot of clients that buy in San Sebastian and in Galicia and all that.
48:48
SPEAKER_00: Um and and and the the trend is positive in general, so there's more foreign investment in general.
48:54
SPEAKER_00: So I think all these places are are kind of up and coming anyway.
48:58
SPEAKER_00: What we do find is that, at least for us, and this is all anecdotal, is that a lot more of our clients are increasingly open to buying things outside of the city centers.
49:06
SPEAKER_00: So, whereas before they only wanted to buy in Barcelona, for example, and now they're like, no, I actually want to be in a town adjacent to the city, closer to the beach, and they're much more open to assimilating in a local community than just being where all the expats are.
49:19
SPEAKER_00: Um, and that's a good thing, I think.
49:21
SPEAKER_04: So that they come to live in Spain.
49:23
SPEAKER_00: They come to live.
49:24
SPEAKER_00: I mean, there's a lot of clients that come to live, and there's a lot that come to invest.
49:28
SPEAKER_04: Yeah.
49:30
SPEAKER_04: Well, Spain is one of those countries that has um reputation as being a great country to spend money in, but not so great to make money in.
49:42
SPEAKER_04: Uh is there some truth to this?
49:45
SPEAKER_00: I'm cautiously giving you an answer that I I technically agree with you, yes.
49:50
SPEAKER_02: Yeah.
49:51
SPEAKER_00: But that's also why I think in many ways it's it's it's become a very choice destination of retirement for a lot of people, right?
49:59
SPEAKER_00: So they've let's say earned their income or resources elsewhere, or have sources of passive income elsewhere and choose to spend it in Spain.
50:06
SPEAKER_00: And that's a good thing for the Spanish economy.
50:09
SPEAKER_00: Of course, of course.
50:10
SPEAKER_00: Taking resources from somewhere else and spending it here.
50:14
SPEAKER_04: Hey, you're preaching to the choir.
50:15
SPEAKER_04: You don't need to uh justify that to our audience.
50:18
SPEAKER_04: We have we understand that.
50:20
SPEAKER_04: But uh okay, so other countries that are competing with Spain for you know golden visa investment, but also for retirees relocating there, um you have Portugal, you have Greece, and you have Italy primarily.
50:36
SPEAKER_04: So each of those countries have a pretty interesting, have pretty interesting special tax regimes.
50:42
SPEAKER_04: So in in Portugal, obviously you have NHR, which lasts for 10 years.
50:48
SPEAKER_04: Uh in Italy, you have three different programs.
50:51
SPEAKER_04: You have Laboratorium Patriati, which is uh five plus five years, and you have the 7% flat tax in the mezzogiorno in the south, and then you have the um the flat 100k uh or the lump sum 100k, which uh I think Ronaldo was made that famous.
51:11
SPEAKER_04: And in Greece you have a similar thing, you know, flat tax on pensions, you have um uh if you invest a certain amount, you can pay a low uh fixed tax or a lump sum tax.
51:23
SPEAKER_04: Do you think that Spain will um um you know recognize that they are competing for let's say you know it could be European, European retirees, right?
51:35
SPEAKER_04: You've got to attract those guys to come and spend in your country.
51:38
SPEAKER_04: Um is Spain going to do something about you know making Beckham Law more attractive?
51:44
SPEAKER_00: The the hope is yes, and and and I want to be I'm gonna be cautious about this because again, we never really know what's gonna happen.
51:49
SPEAKER_00: The hope is yes, um, and and for several reasons.
51:52
SPEAKER_00: So one is that actually maybe what doesn't make it in the news is that the the hacienda has been sued multiple times by by many it has been buried by many lawsuits, um mainly because of this issue, right?
52:05
SPEAKER_00: So they're they're quite aggressive.
52:07
SPEAKER_00: So yes, the Spanish hacienda can be quite aggressive in terms of you know what it what tax it levies on a lot of people, and and they've been taken to court multiple times, and let's say that they haven't really been winning many of the cases.
52:19
SPEAKER_00: And so I think at some point in the future something's gotta give.
52:24
SPEAKER_00: Um, on the other hand, too, what's important to note about tax residency is it's not just about physical presence.
52:29
SPEAKER_00: There's a lot of, let's say, retirees that spend a lot of time in Spain, but use the second uh criteria of tax residency, meaning center of economic interest to their advantage, meaning to say you own nothing in Spain or you own a very small asset here.
52:43
SPEAKER_00: And one, you the large part of your economic interest is elsewhere in a country that will claim you as a tax resident.
52:50
SPEAKER_00: This is very important.
52:52
SPEAKER_00: And this is used by a lot of that, let's say, that group of that demographic you mentioned, retirees.
52:57
SPEAKER_00: Umte as well that in Madrid, Madrid, so every autonomous community here also levies its own taxes, right?
53:05
SPEAKER_00: So there's the broad Spanish system, and then every Comunidad Autónoma, like Catalunya and Madrid, can also have its own taxes.
53:12
SPEAKER_00: Madrid has actually given a 99% bonificacion for most of the wealth tax.
53:17
SPEAKER_00: So wealth tax basically doesn't exist in Madrid.
53:19
SPEAKER_04: Um, well, you have to uh you have so to get that exemption, according to memory, you have to get at least half your income from um your patrimonio.
53:30
SPEAKER_00: Something like this.
53:31
SPEAKER_00: Yeah, I'm not in a given yeah.
53:32
SPEAKER_00: This is not constant financial advice.
53:34
SPEAKER_04: No, no, there's there's a couple of hoops you need to jump through, but essentially you can bring your um wealth tax down to zero if you live in Madrid and a couple other comunidades autonomes.
53:43
SPEAKER_04: Exactly.
53:44
SPEAKER_00: And then so for me, I was just, you know, I mentioned that to illustrate that the trend seems to be moving that way at a snail's pace, absolutely.
53:52
SPEAKER_00: But on the one hand, I think what Spain has shown is it is absolutely open for foreigners, it's open for foreign investors, it's open for you know being welcome to those types of people coming here.
54:02
SPEAKER_00: The next thing it has to revamp is its tax system.
54:05
SPEAKER_00: And we're quite hopeful that this will happen.
54:08
SPEAKER_00: It's not gonna happen tomorrow because again, we don't even have a government.
54:11
SPEAKER_00: But you know, we are hopeful that we'll it will happen in our lifetime.
54:16
SPEAKER_04: Yeah, yeah, because I think it'll be really important for not just countries in the south of Europe, but countries everywhere that are marketing themselves as lifestyle destinations, let's say um, they will need to offer some kind of advantageous special tax regime that maybe they don't go ahead.
54:38
SPEAKER_00: Sorry, I think part of it is that you know parts of the Spanish tax regime are just debilitating, right?
54:43
SPEAKER_00: So we're not saying that it has to be super attractive, it just has to be more fair, is probably the best way to put it.
54:49
SPEAKER_00: Can you give an example of a debilitating this patrimonio, for example, and I think most of other European countries don't have this anymore, so there's really no reason why Spain needs to hang on to this.
55:00
SPEAKER_00: That I think they would actually earn more in taxes if they, let's say, repurposed or or looked at other places where they could levy some kind of tariffs or fees and spend less resources and trying to chase these like very few people for extra couple thousands on their taxes.
55:16
SPEAKER_00: This is just an example, right?
55:17
SPEAKER_04: Yeah, yeah, yeah, yeah.
55:18
SPEAKER_04: No, I mean they have in Norway, Norway is one of the few countries in Europe that, like Spain, has a um wealth tax.
55:25
SPEAKER_04: And it's uh they they raised it recently, and I think about 50-60 of the richest Norwegians all moved to Switzerland.
55:34
SPEAKER_02: Exactly.
55:34
SPEAKER_04: Um and I think if you if you if you'd gone back, you know, 20 years when they first introduced this wealth tax, um nothing like that happened because wealth wasn't mobile in the way that it is today.
55:47
SPEAKER_04: People couldn't work remotely.
55:48
SPEAKER_04: But you try that stuff in 2023, yeah, this is what happens.
55:52
SPEAKER_04: The the most productive people in your country leave.
55:56
SPEAKER_04: Yeah.
55:56
SPEAKER_00: It will have the opposite desired effect, and I think Spain will eventually have to come to terms with that.
56:07
SPEAKER_04: That's it for today, folks.
56:08
SPEAKER_04: But we'll be back soon with another episode of the Mobility Standard.
56:12
SPEAKER_04: I want to remind you to follow our work on iMyDaily.com, the world's number one publication for investment migration.
56:19
SPEAKER_04: Home to the internet's greatest collection of investment migration data, real estate, expert opinion, and the intelligence you need to be a successful investment migration professional.
56:29
SPEAKER_04: Thank you for listening.