RESIDENCE IN SPAIN
Tax Residency in Spain
One thing is the Civil Residency, that you can probe with the “Certificado de Registro de Ciudadano de la Unión”, that is the A4 green piece of paper that you obtain from your local police station when you apply for the Temporary Residence Permit, and other thing is the Tax Residency.
You will become resident for tax purposes in Spain if:
You spend more than 183 days in Spain in one calendar year. You become liable whether or not you take out a formal residency permit. These days do not have to be consecutive. (Temporary absences from Spain are ignored for the purposes of the 183-day rule unless it can be proved that the individual is habitually resident in another country for more than 183 days in a calendar year.)
Or, your “centre of vital interests” is in Spain, e.g., the base for your economic or professional activities is in Spain.
Or, your spouse lives in Spain and you are not legally separated even though you may spend less than 183 days per year in Spain
Note that the Spanish tax years is the same as the calendar year (1 January – 31 December), unlike the UK, which is from 6 April to following 5 April.
If you really want to prove you are a resident in Spain you need to have evidence of your fiscal residency and the best way is to obtain a certificate of fiscal residency, that it is a white printed-off certificate that is obtained from The Tax Office – Agencia Tributaria.
This is what you need to prove residency when you sell your home and avoids you having 3% of the sale price retained. The Fiscal Residency certificate proves residency where there is an inheritance claim and can make a big difference to the amount of inheritance tax payable. You will not benefit from these tax advantages unless the notary sees your fiscal resident certificate when presiding over the transactions.
There are many reasons for becoming a resident:
If you are resident and more than 65 years old, and you have lived in your home for at least 3 years, you will not be liable to Spanish capital gains tax when you sell it, no matter how much profit you make (Articles 33.4.b) and 68.1.3º LIRPF). Non residents will be taxed at up to 19% (Article 25.1.f) 3º LIRNR)
If you are a resident and you sell your primary residence in Spain and invest your profit into a more expensive property which will also be your primary residence in Spain, you will not have to pay any capital gains tax at all (Article 38 LIRPF)
If you are resident and you sell your property, you will not be subject to having 3% of the total declared selling price withheld as a guarantee against possible tax liabilities. Non residents will have 3% withheld, and if no liabilities are found, your abogado will be able to retrieve it in around 12 months (Article 25.2 LIRNR)
If you are a resident and will your home to your spouse or child who is also a resident, then Spanish inheritance tax can be avoided on 95% of the valuation, providing that you have owned and lived in the property for at least 3 years, and the inheritor undertakes not to sell the property for 10 years and continue to be a resident. The cut off point for the 95% reduction is 122.606,47 euro, over that amount you must pay (Article 20.2.c) LISD)
Residence in Spain for citizens of countries members of EU
CREGO ABOGADOS has an extensive experience in Residence matters and will be delighted to help you to reside in Spain in accordance with the Spanish Law.
Depending on how long is going to reside in Spain a citizen of a country of the EU, he/she would have to apply for the followings permits:
- NIE number
If you are going to spend in Spain less than 90 days per year, you do not need to apply for a Temporary Residence Permit, with your Passport it is enough, nevertheless in case that you decide to buy a property you will need to apply for a NIE number, that it is only a number for tax purposes.
- Temporary Residence Permit
If you are going to spend in Spain more than 90 days and less than five years, in virtue of Royal Decree 240/07 you should apply for a Temporary Residence Permit, you should register in person at the Oficina de Extranjeros in your province of residence or at designated Police stations. You will be issued an A4 green printed Residence Certificate stating your name, address, nationality, NIE number and date of registration.
- Permanent Residence Permit
Permanent residence implies living and working in Spain with the same rights as Spaniards.
Permanent Residence Permits are granted to foreigners who can prove a five (5) year legal and continuous residence in Spain, provided that there were no irregular exits from the country.
Continuity will not be interrupted by:
Period of absence on holidays outside Spain.
Absences for up to six (6) months, provided that such absences do not exceed the sum of one year.
Justified absences for family or health reasons.
You have to prove that you have adequate financial resources to provide for you and your family (if applicable) – such as pension, scholarship or salary – and proof of public or private health insurance with a company authorised to operate in Spain.
You may also be asked to submit:
a valid passport;
proof of legal residence in Spain eg. a long-term rental contract or receipts for rent;
criminal record certificate issued by the authorities in your home country;
medical certificate (certificado médico), in cases where the applicant didn’t present it when applying for temporary residence.
proof that health assistance is guaranteed during your residence in Spain;
marriage or divorce certificate or other papers relating to your marital status (translated into Spanish if required).
When you have this permit, you can work freely and enjoy social services and benefits in Spain. You can generally move between other EU member states for up to three months, and longer for certain purposes if you’re granted a permit to do so.
- Spanish citizenship
You can apply for Spanish nationality after 10 years of residence in Spain. You can also acquire Spanish nationality through marriage or birth, even if you or your Spanish parents were born outside Spain.
You will also be required to prove you are a ‘good citizen’ – financially stable with no criminal record – and be deemed by the authorities to have a ‘sufficient’ degree of integration into Spanish society, for example, being able to speak Spanish and taking part in social activities that are part of the Spanish way of life.
You have to apply at the Civil Registry where you live in Spain. You will need to take along the required supporting documents for your Spanish citizenship application plus a completed Spanish citizenship application form.
- Registering on the padrón
In case that you apply for the Temporary Residence Permit, Permanent Residence Permit, or Spanish Citizenship, you should registering on the padrón.
The padrón is a list of all the people who live in a certain town. It is simply a way for the town hall to know how many people live in their area, without entering into investigations as to a person’s official residence status or financial affairs.
You don’t have to own your house to register, just have an address where you habitually live, no matter whether you are the owner, you rent, or live with family or friends. Nor is registration a long drawn out registration process. Simply go to the padrón office of your town hall and fill in the form they provide. Take along official identification, such as a passport, and also your NIE or residence certificate/card, a recent utility bill in your name, and the deeds to your house or a copy of your rental contract. Although you may have to return to collect your certificate, the actual registration is completed all on the same day.
Once you’ve completed the simple process, you can begin to enjoy all the advantages being on the padrón offers, such as:
Better public services
Central government allocates money to the different municipalities according to how many people are on the padrón. Therefore, if you are not registered, your town hall is losing money for the provision of health centers, police officers, fire fighters and schools.
Access to benefits and social care
You must be on the padrón for a certain period of time in order to access some income-related benefits and other aspects of social care available through social services at your town hall.
A reduction in taxes
Depending on the town hall, registration on the padrón could mean reductions in certain community charges and inheritance tax. Furthermore, those on the padrón can also often enjoy discounted courses, leisure and cultural activities run by the town hall.
Voting rights
In order to register to vote in local or European elections, you must first be registered on the padrón.
Residence in Spain for citizens of countries NO members of EU
CREGO ABOGADOS has an extensive experience in Residence matters and will be delighted to help you to reside in Spain in accordance with the Spanish Law.
Law 14/2013 on Support of the Entrepreneurship and its Internationalization (September, 27th 2013) introduces a new specific framework for investors, entrepreneurs and qualified non EU nationals based on an agile and specialized system for visa and residence permit to attract foreign investment and talent in order to foster economic growth and create jobs.
Law 25/2015 on the Second Opportunity Mechanism (July, 28th 2015), in force since July 30th 2015, has introduced several improvements to this framework.
Investors
If you have made a significant investment in Spain, you can take advantage of the Spanish migration scheme for investors.
The types of investments that qualify for the Investor visa or residence permit are the following:
Acquisition of real estate with a minimum value of € 500,000. The relevant real estate assets shall be free of liens, at least up to the minimum value of € 500,000. Co-ownership of real estate also qualifies, provided that the individual investment made by the applicant of the Golden Visa amounts to € 500,000 (free of liens).
Investment of € 2 million in Spanish government bonds; € 1 million in shares of Spanish companies; or deposit of € 1 million in a Spanish bank account.
Undertaking in Spain of a business project that, subject to supporting documentation, is regarded as being of general interest (i.e. creation of jobs, relevant socioeconomic impact in the region, scientific and/or technologic innovation).
Who has to apply for the visa or residence permit?
The investor or his/her legal representative must apply for the visa or residence permit via the application form.
What kind of visa or residence permit the investor will be granted?
An investor visa, if you are outside of Spain when the application is submitted. A residence permit, if you are currently in Spain when submitting the application.
Where can I apply for it?
Visa applications must be made at the Spanish Consulate in the country of origin or residence. Residence permit applications must be made at the Large Business and Strategic Groups Unit (Unidad de Grandes Empresas y Colectivos Estratégicos (UGE-CE)).
What documents do I need to submit with the application?
Passport.
Health insurance documents issued by a company operating in Spain.
Background checks.
Proof of suficient resources.
Documents providing proof of the investment.
They depend on the kind of investment.
Public debt: certificate from the financial institution or the Bank of Spain.
Unlisted shares and equity: statement of investment filed with the Investments Register of the Directorate-General for International Trade and
Investments (DGCOMINVER) Listed shares: document from a financial broker registered with the National Securities Market Commission (CNMV) or the Bank of Spain
Investment funds: certificate from the fund manager.
Bank deposits: certificate from the financial institution.
Property: certificate of property registration and real estate purchase deeds.
If the purchase is not formalized: engagement contract formalized in public deed.
Business project: a favorable report from the DGCOMINVER.
If the investment is made by a legal person, can I apply for the visa or residence permit?
Yes, if it is not made in jurisdictions considered tax havens and you have a majority share. You should also submit also a favorable report about the legal person from the DGCOMINVER.
Can the foreign agent who manages the business project take advantage of this migration scheme?
Yes. He/she should also submit a favorable report from the DGCOMINVER.
How long does the permit last?
Real estate assets not formalized: visa/residence permit: 6 months.
Visa: 1 year.
Residence permit: 2 years
Renewal of the residence permit: 5 years. Renewal does not require effective residence in Spain.
Can family members join or accompany the investor?
Yes. Family members who accompany or join the investor may apply jointly and simultaneously or successively for their residence permit and, where appropriate, for their visa Family members are:
The spouse or unmarried couple.
Children who are minors or those of legal age being financially dependent on the holder.
Parents in their charge.
What other benefits are there?
With the visa and residence permit, you may live and work anywhere in Spain, including relatives if they meet the expected age labor regulations.
Streamlined processing:
Visa decisions are made and notified within 10 working days.
Residence permit decisions are made within 20 working days.
The application for residence permits and renewals extend the validity of the stay or residence status of the applicant until the procedure is terminated.
Entrepreneurs
If you are a non-EU national willing to start up an innovative business of particular economic interest in Spain, you can take advantage of the Spanish migration scheme for entrepreneurs.
There are two options:
A startup visa, if you are outside of Spain and you need to come to Spain to make the necessary preparatory arrangements to do business here.
A residence permit, if you are currently in Spain and can set up the business.
There are neither minimum capital requirements nor a minimum number of jobs to create. The Spanish system is based on a case by case analyses. For this reason, business plans are required to know if the activity has a special economic interest for Spain or not.
Who has to apply for the visa or residence permit?
The entrepreneur or his/her legal representative must apply for the visa or residence permit via the application form.
Where can I apply for it?
Visa applications must be made at the Spanish Consulate in the country of origin or residence.
Residence permit applications must be made at the Large Business and Strategic Groups Unit (Unidad de Grandes Empresas y Colectivos Estratégicos (UGE-CE)).
How long does the permit last?
Visa: 1 year
Residence permit: 2 years
Renewal of the residence permit: other 2 years.
How is the project assessed?
The case by case analyses is based on the decision made by business experts. The Directorate-General for International Trade and Investments (DGCOMINVER) is in charge of assessing the activity.
To know if the activity has a special economic interest for Spain, several elements are taken into account:
The applicant’s professional profile, his/her training and professional experience as well as his/her involvement in the project.
The business plan, including at least the following aspects:
Description of the project: business activity to be performed, start-up date, location, planned legal form of the company, potential economic impact of the investment, description of the estimated number of jobs that may be created and their duties and qualification, planned promotion activities and sales strategy.
Description of the product or service: the description shall be detailed and include the innovative aspects.
Market analysis: assessment of the market and expected evolution, description of the possible competitors, assessment of potential consumers and analysis of supply and demand.
Financing: investment required, sources of financing and financial plan
The added value for the Spanish economy.
What documents do I need to submit with the application?
Passport.
Health insurance documents.
Applicants must take out public or private health insurance with a company operating in Spain.
Background checks.
Proof of sufficient resources.
In case of visas: Report on entrepreneurial activity issued by the Spanish Economic and Commercial Office in the same area where the visa is requested.
In case of residence permits: business plan.
What other benefits are there?
With the visa and residence permit, you may live and work anywhere in Spain, including relatives if they meet the expected age labor regulations.
Combine processing of permits for direct family members:
Spouse or unmarried partner.
Children who are minors or those of legal age being financially dependent on the holder.
Parents in their charge.
Streamlined processing:
Visa decisions are made and notified within 10 working days.
Residence permits decisions are made within 30 working days.
The application for residence permits and renewals extend the validity of the stay or residence status of the applicant until the procedure is terminated.
Highly Skilled Professionals
If you are interested in working in a company in Spain as a highly qualified professional (HQP) or you are a graduate or postgraduate from universities and prestigious business schools, and you have a job offer, you may be eligible to apply for a HQP residence permit.
The Spanish company:
Has to be a large business or corporate group
Has to be a SME in strategic sector
Has to develop a business project of general interest
Who has to apply for the residence permit?
The company which intends to incorporate HQP or legal representative of the company must apply for the residence permit.
What kind of residence permit will the professional be granted?
A HQP residence permit will be granted. This residence permit allows the high qualified professional to stay and work in Spain for up to two years (article 71 of the Entrepreneurial
Where does the company apply for the residence permit?
At the Large Business and Strategic Groups Unit (Unidad de Grandes Empresas y Colectivos Estratégicos (UGE-CE)).
What documents have to be provided with the application?
Certification indicating that the company is:
a large business or corporate group
an SME in a strategic sector: Report from? the Directorate-General for Trade and Investment.
developing a business project of general interest. Report from? the Directorate-General for Trade and Investment.
Copy of the contract or professional relationship.
Job description.
HQP´s Resume.
HQP´s passport.
HQP´s Background checks.
In case of graduates or postgraduates: HQP´s university degree or HQP´s qualification from a prestigious business school.
Does the company have to submit supporting documentation every time it requests authorization for a PAC?
The company supporting documentation which must be registered in the UGE-CE, is submitted once. It is valid for 3 years, renewable as long as the requirements are maintained. Registered companies can benefit from a simplified procedure.
If the highly qualified professional is in Spain, can the company apply for the residence permit?
Yes, as long as the migrant is in a regular situation in Spain. If the HQP is abroad at the time of the application, once the residence permit has been awarded, he or she must apply for a visa at the Spanish Consulate.
Can the HQP residence permit be renewed?
Yes, the residence permit can be renewed for an additional two-year period as long as the requirements have been fulfilled.
Can family members join or accompany the highly qualified professional?
Yes. Family members who accompany or join the HQP may apply jointly and simultaneously or successively for their residence permit and, where appropriate, for their visa Family members are:
The spouse or unmarried couple.
Children who are minors or those of legal age being financially dependent on the holder.
Parents in their charge.
What other benefits are there?
With the visa and residence permit, you may live and work anywhere in Spain, including relatives if they meet the expected age labor regulations.
Streamlined processing:
Visas: 10 days.
Residence pemits: 20 days.
The application for residence permits and renewals extend the validity of the stay or residence status of the applicant until the procedure is terminated.
Intra-corporate transferees
The Spanish migration framework offers two options for intra-corporate transferees of third country nationals (non EU):
EU Intra-corporate transferee (ICT-UE) residence permit for managers, specialists and trainee employees.
National residence permit for intra-corporate transferee for other categories, such as the transfer of workers to manage a contract (CSS), the transfer of workers under a professional relationship.
The request for one residence permit or another depends on the category which intends to be transferred to the company or group of companies established in Spain.
What are the differences between the residence permits?
Intra EU mobility. The holders of a valid EU ICT Intra-corporate transferee residence permit can enter, reside and work in one or several EU Member States provided they previously notify or apply for a permit, where applicable, to the authorities of those States in accordance with their legislation in application of Directive 2014/66/EU.
The companies established in other UE Member States may transfer managers, specialists and trainee employees who hold an EU ICT intracorporate transferee permit to Spain, provided that (they previously notify the Unit for Large Companies and Strategic Economic Sectors
Who can apply?
The host entity must apply or an agent of such company or entity duly accredited.
Where does the host entity apply for the residence permit?
To the Large Business and Strategic Groups Unit (Unidad de Grandes Empresas y Colectivos Estratégicos (UGE-CE)). Visit: http://extranjeros.empleo.gob.es/es/UnidadGrandesEm presas/
What documents does the host entity need to submit?
Passport
Health insurance documents
Background checks
Certification of the company: Evidence of real business activity
Higher education qualification or equivalent or a minimum professional experience of 3 years.
The existence of a previous and continuous employment or professional relationship of 3 months with one or more of the companies of the group.
Company documentation proving the intracorporate transfer.
Documentation proving the relationship with Social Security
There is a fast track for registered companies.
If the transferred professional is in Spain, can the host entity apply for the residence permit?
Yes, as long as the migrant is in a regular situation in Spain. If the transferred professional is abroad at the time of the application, he or she must apply for a visa at the Spanish Consulate, once the residence permit has been awarded.
How long does the permit last?
The intra-corporate transferee permit is valid for the duration of the transfer with a maximum of 2 years.
Can the residence permit be renewed?
Yes, the residence permit can be renewed for an additional two-year period as long as the requirements have been fulfilled.
However, there is a maximum duration for an intracorporate transfer which affects the length of the residence permit and the renewals.
Managers and specialists: 3 years.
Trainee employees: 1 year.
Can family members join or accompany the permit holder?
Yes. Family members who accompany or join the intra corporate transferred may apply jointly and simultaneously or successively for their residence permit and, where appropriate, their visa Family members are:
The spouse or unmarried couple.
Children who are minors or those of legal age being financially dependent on the holder.
Parents in their charge.
What other benefits are there?
With the visa and residence permit, you may live and work anywhere in Spain, including relatives if they meet the expected age labor regulations.
Streamlined processing:
Visas: 10 days.
Residence pemits: 20 days.
The application for residence permits and renewals extends the validity of the stay or residence status of the applicant until the procedure is terminated.
No labor market test.
R&D&I Training
If you are interested in carrying out a research activity in a Spanish University, in business entities or R&D&I centers or in a research organisation established in Spain and you have an offer, you may be eligible to apply for an R&D&I and training residence permit.
Who has to apply for the residence permit?
The institution must apply for the residence permit via the application form
What kind of residence permit will the researcher will be granted?
An R&D&I and training residence permit.
This residence permit allows the researcher to stay and work in Spain for up to two years or for the duration of the contract or hosting agreement.
Where does the institution apply for the residence permit?
At the Large Business and Strategic Groups Unit (Unidad de Grandes Empresas y Colectivos Estratégicos (UGECE)).
What documents have to be provided with the application?
Passport
Background checks
Certification of the institution
Copy of the contract or of the relevant documents certifying the professional relationship between the institution and the researcher
If the researcher is in Spain, can the institution apply for the R&D&I and training residence permit?
Yes, as long as the researcher is in a regular situation in Spain.
If the researcher is abroad at the time of the application, he/she must apply for a visa at the Spanish Consulate in his/her country of origin or residence, once the residence permit has been awarded.
Can the R&D&I and training residence permit be renewed?
Yes, the R&D&I and training residence permit can be renewed for an additional two-year period as long as the requirements have been fulfilled.
Can family members join or accompany the researcher?
Yes. Family members who accompany or join the researcher may apply jointly and simultaneously or successively for their residence permit and, where appropriate, for their visa.
Family members are:
The spouse or unmarried couple.
Children who are minors or those of legal age being financially dependent on the holder
Parents in their charge
What other benefits are there?
With the visa and residence permit, you may live and work anywhere in Spain, including relatives if they meet the expected age labor regulations.
Streamlined processing:
Visa decisions are made and notified within 10 working days.
Decisions are made on residence permits within 20 days. • No labor market test is applied.
The application for residence permits and renewals extends the validity of the stay or residence status of the applicant until the procedure is terminated.