‘Legal alert on new initiatives of the Spanish Government for granting of residence permit to foreign investors’
Raúl Rojas and Javier López are Partners with ECIJA in Madrid. They can be reached via
rrojas@ecija.com and jlopez@ecija.com
Madrid, May 28th, 2013
With the intention of stimulating foreign and national investments, the Spanish Government approved on last Friday, the First draft of the Entrepreneurs bill, in accordance with the European regulation, recently approved in that regard; through the Directive on Social Entrepreneurship Aid Funds and other communitarian regulations that harmonizes those funds.
The purpose of the present legal alert is to assess, according to the latest information offered by Government, the new bill, which besides the stimulation of external investment in different scopes, with the aim to promote the development of enterprises in our territory, intends to promote scientific and technological innovation, and create jobs.
The main novelties of the future Entrepreneurs Law with regard the residence permit for entrepreneurs and investors are:
– Reasons for the visa grant for entrepreneurs: the Government intends to grant temporary residence permits to those who create jobs through the creation and development of enterprise projects in our country; to those who invest through the acquisition of housing property located in Spanish territory to a higher price, initially, Eur. 160,000. However recently this minimum investment amount has been raised to Eur. 500,000; or to those who have the condition as graduates in Spanish business schools.
– Amount of the real estate investment: initially the Government contemplated as minimum investment to get access to the aforementioned residence permit, the amount of Eur. 160,000, nonetheless in the rewriting of the first draft, this amount has been risen to Eur. 500,000.
– Limitations to the grant of residence permit by real estate investment: besides the previous requirements the Government will establish that the potential candidates shall not be in Spain in an irregular situation or have criminal records in Spain and/or the countries where have lived in the previous five years; or have to count on a public or private health insurance and enough financial resources; also the grant of residence permit will be limited to the acquisition of unencumbered housing property. Therefore in the cases in which the house has mortgage or a foreclosure notice, the investor will be unable to get residence permit.
Among others important news, we emphasize the regulation of a specific Entrepreneurs taxation, is intended to apply to different tax incentives in the PERSONAL INCOME TAX for the investment and/or financing from companies of new creation, contemplating tax credits up to Eur. 100,000 and until 10% on corporate tax over profits earned and reinvested in the business.
Additionally, the Government intends with this regulation to ease the administrative procedures for company start-up and closure, by filling these in Internet with the Information center and Network of Creation of Companies (CIRCE). In relation to the current reform of the insolvency legal framework, measures to refinance viable companies will be put in place, as well as a more adequate proceeding to channel professionals and SME insolvencies, by opening an extrajudicial via, under supervision of mercantile mediator, minimizing time and costs derived from the insolvency proceeding.
Although we are before a new Government bill, pending to become Law, it entails the basic outlines that several provisions of the future Law will reflect and has been drafted in accordance with the communitarian regulation.
Please read the article here: ‘Legal alert on new initiatives of the Spanish Government for granting of residence permit to foreign investors’