Residency with investment

One of the main problems facing individuals who live outside the Schengen area (which covers 27 countries most of which are members of the EU) is that they are not permitted to spend more than 90 days in any six-month period in the Schengen area, without obtaining a visa from one of the member countries.

The main advantage of buying a property in a country which has a Golden Visa program in place, is that once an investor buys a property he can apply for a residence permit to reside in the country. This allows him to remain there in accordance with the terms of the visa, so this constraint is no longer applicable.

An investor also benefits from freedom of movement to any of the other 26 countries in the Schengen area.

The key questions that relate to each of these programmes are:

• the level of investment required
• any limitations that may apply to the location of the investment in the country
• the length of stay necessary in the issuing country in order to obtain and maintain the visa
• the tax implications for an individual and his family
• the price of the property available in the country in question
• the potential rental returns on your investment

The best known of these schemes has for a number of years been the Portuguese “Golden Visa”. The Portuguese Government has however moved to exclude residential and commercial property from the Visa programme due to the inflationary effect it was perceived as having on property prices, with the effect that local investors have been priced out of the market.  Some clarification is still required on this, but the door has clearly been closed on residential property as a qualifying investment.

If a real estate investment was perceived as the best solution for investors, other investment options for obtaining a residence permit are still available, and these include:

• an investment in bonds or bank deposits of €1.5 million,
• an amount of €250,000 to preserve the national heritage,
• an investment of €500,000 into one of the Government approved investment funds (which now excludes investment in real estate),
• an investment of €500,000 into a company that creates five new jobs or maintains ten jobs, or,
• €500,000 of approved research and development activity in Portugal.

MHA-Invest is working with a number of lawyers and fund managers in Lisbon, who have developed investment funds which include “Solar Power” and “Growth” and “Innovation funds”. These funds are regulated and supervised by the Portuguese Securities Market Commission (CMVM), and are qualifying investments for the Portuguese Golden Visa programme. An investment can be spread across different funds and the funds have an 8 year duration.

New regualtions came into effect on August 31, 2024.

What does it mean for the investors?

It will create two different investment tiers if the update is announced officially by the parliament. It will depend on geographic zones having an immediate effect on the minimum investment requirements for applicants.

Tier 1 | 800,000 EUR: This is a real estate investment in the areas of Attica, Thessaloniki, Mykonos, Santorini, and the islands, which have a population of more than 3,100.

Tier 2 | 400,000 EUR: This tier covers all other regions of Greece and establishes a more attainable entry point of 400,000 EUR. The main goal here is to encourage investment in a wider range of areas. So eventually, this could broaden the program’s economic advantages.

The requirement for both tiers: Investment is to be made in a single property of at least 120 square meters.

The conversion of commercial properties into residential units

As of August 31, 2024, additional investment option is available with a  €250,000 minimum investment. in a residential unit in a commercial property which has been converted or rebuilt.  This option provides the least expensive entry point into the Greece Golden Visa program.

MHA works closely with one of the leading firms of lawyers in Athens which specialises in property and corporate finance and have worked extensively on inward investment programmes, as well as working with many local agencies and property developers.Real Estate – In order to qualify for the Greece Golden Visa program via the real estate route, investors must purchase property in Greece personally (or through a legal entity in which they own all of the company shares).

Other qualifying investments include:

Financial Investments:

• Government Bonds: Commit at least €500,000 to Greek government bonds, with a minimum holding period of three years.
• Shares or Bonds: Acquire shares, corporate bonds, or Greek government bonds that are traded on regulated Greek markets, with a minimum investment of €800,000.
• Mutual Funds: Allocate at least €350,000 into mutual funds that solely invest in shares, corporate bonds, or Greek government bonds listed on regulated markets in Greece.

Business Investments:

• Capital Contribution: Contribute a minimum of €500,000 to a Greek-registered company (excluding portfolio investment and real estate investment firms) for share capital increases or bonds issued for trading on regulated Greek markets.
• Real Estate Investment Companies: Invest no less than €500,000 in a publicly listed real estate investment company that operates exclusively in Greece.

As part of the Spanish Government’s strategy to boost its economy and increase foreign investment, the government created an investment program known as the Spain Investor Visa, or Spanish Residence Permit Program. Through the program, non-EU citizens can secure a legal residence in Spain.

The Spanish Investor Visa program grants qualifying individuals a renewable, temporary residence permit in exchange for an investment in the country. Individuals can either purchase real estate, invest in Spanish companies, create employment opportunities, or make a qualifying contribution to government bonds.

One of the advantages of the Spanish Golden Visa is that the government legislation does not impose a minimum period of residence. Qualifying applicants and their family members who meet the program’s requirements and invest at least

• €500,000 in real estate,
• €1 million in shares or a deposit in a Spanish bank
• €2 million in Spanish government bonds,

are offered a straightforward way to obtain a residence permit.

The initial residence permit is granted for one year, or two years if you visit Spain, which can then be renewed every five years.

You can obtain permanent residency after you’ve been domiciled in the country for five years.

Please note that applicants will be required to visit Spain to submit their biometric data.

The Spanish Government was reviewing its Golden Visa programme prior to the recent elections in May 2023, and it is likely that there will be changes in the current programme following the elections. A number of professional advisers consider that the programme will be kept in place, but the threshold for foreign investment in property may be increased to €1m.

MHA works closely with a number of firms of lawyers, architects and financiers in the most popular investment locations in Spain, all of whom specialise in real estate investment.  It is absolutely essential to take professional advice from independent counsel when making an investment in the property sector, in order to ensure that your investment is properly secured.