Spain: New Options to Acquire Spanish Citizenship and to Attract Nonresident Individuals to Spain

In brief

The new regulations recently approved in Spain regarding the acquisition of Spanish citizenship and the impatriate tax regime applicable for individuals, offer new possibilities to those who meet the requirements and wish to move to Spain.

This article appears in the first edition of the Private Wealth Newsletter 2023.

In more detail

New term for acquiring Spanish nationality by option for descendants of exiles

Through the recently approved Democratic Memory Law, Spain has opened a new two-year period (in force until 20 October 2024) during which the descendants of exiles will be able to acquire Spanish nationality by option, without the need to prove a previous period of residence in Spain. This measure will benefit those born outside of Spain with parents or grandparents exiled for political, ideological or belief reasons or sexual orientation and identity.

On the other hand, it is also provisioned that Spanish nationality will can be acquired by children born abroad to Spanish women who lost their nationality by marrying foreign nationals before the entry into force of the Spanish Constitution of 1978, as well as children and daughters of legal age of those Spaniards whose nationality of origin was recognized by virtue of the right of option in accordance with the provisions of the Democratic Memory Law or in the seventh additional provision of Law 52/2007, of 26 December, which recognizes and expands the rights and establishes measures in favor of those who suffered persecution or violence during the civil war and the dictatorship.

Thus, the new regulation is applicable to the following:

  • Those born outside of Spain whose parents or grandparents had originally been Spanish.
  • Those born outside of Spain to parents or grandparents who had originally been Spanish and who, as a consequence of having suffered exile for political or ideological reasons or belief or sexual orientation and identity, have lost or renounced their Spanish nationality. 
  • Those born outside of Spain to Spanish women who lost their Spanish nationality by marrying a foreign citizen before the entry into force of the Spanish Constitution of 1978.
  • Children who were of legal age when their father or mother acquired Spanish nationality by virtue of Law 52/2007 on Historical Memory.
  • Children of a father or mother originally Spanish and born in Spain, who opted for Spanish nationality not of origin.
  • Minor children of those who acquired Spanish nationality by application of Law 52/2007, who opted, in turn, for Spanish nationality not of origin.

It should be noted that the acquisition of Spanish nationality by option provided for in the Democratic Memory Law will not require the renunciation of the previous nationality.

Residence permits for investors as a way to acquire Spanish nationality

Those who do not meet the requirements established in the Democratic Memory Law for the acquisition of Spanish nationality or who do not wish to follow this path, will have the possibility of applying for Spanish nationality by residence. To that end, among other requirements, they must reside in Spain for a minimum period established according to their nationality or personal situation, so that it is necessary to analyze each specific case to determine the period of legal residence necessary to be able to opt for Spanish nationality.

One of the main ways to obtain legal residence in Spain with a view to subsequently acquiring Spanish nationality is the investor residence authorization (popularly known as "Golden Visa"), which is accessed by making an investment in Spain in any of the cases provided for by the regulations:

a) An initial investment for a value equal to or greater than the following:

  • EUR 2 million in Spanish public debt securities
  • EUR 1 million in shares or participations in Spanish capital companies with a real business activity
  • EUR 1 million in investment funds incorporated in Spain and managed by a management company incorporated in Spain
  • EUR 1 million in bank deposits in Spanish financial institutions

b) The acquisition of real estate in Spain with an investment for a value equal to or greater than EUR 500,000 for each applicant.

c) A business project that will be developed in Spain and will be considered and accredited as of general interest, for which compliance with at least one of the following conditions will be assessed:

  • Creating jobs
  • Carrying out an investment with a significant socioeconomic impact in the geographical area in which the activity is to be carried out
  • Making relevant contribution to scientific and/or technological innovation

Once the period of residence required according to nationality or personal situation has elapsed, the process for the acquisition of Spanish nationality by residence can be started based on this investor residence authorization.

It should be noted that investor residence authorizations are granted for a period of three years and allow the holder and their dependent immediate family members to reside and work in Spain without any type of limitation. In addition, holders of this type of authorization will be able to move freely through the Schengen area (an area that includes most of the EU countries and other countries such as Switzerland and Liechtenstein) as visitors.

On the other hand, from a tax perspective, those moving to Spain either as foreign nationals or as Spanish citizens may benefit from the special tax regime applicable to individuals, which has the aim of attracting talent to Spain. 

New aspects of the impatriate tax regime

The tax regime for impatriates is a special tax regime that enables foreign nationals who move to the Spanish territory to pay income and wealth tax as if they were nonresidents during the first six years.

This regime allows individuals who reside abroad that want to come to work in Spain to pay a flat fee for salary income of 24% up to EUR 600,000 instead of a progressive tax. However, it will be increased to 47% on the amounts received as salary income in excess of EUR 600,000. On other types of income (including savings income and capital gains), impatriates will be subject to tax in Spain only on Spanish sourced income at the applicable savings income rates up to 28% on the amounts exceeding EUR 300,000. Impatriates will remain subject to Wealth Tax only on Spanish located assets (i.e., Wealth Tax will not be paid on non-Spanish assets).

As of 1 January 2023, the requirements to benefit from the special tax regime for impatriate employees, popularly known as the "Beckham Law," has become easier in the following ways:

  • The period of nonresidence prior to moving to Spain to be eligible for this regime is reduced to five fiscal years (previously it was 10). 
  • The law has established a longer lists of reasons that allow the impatriate to qualify for the special regime:
    • Working remotely from Spain through computer, telematic or telecommunication means or systems (digital nomads), with no need for the employer to issue a travel order or transfer. This circumstance is understood to be fulfilled in the case of teleworkers with an international telework visa. 
    • Performing business activities classified as entrepreneurial activities. 
    • Highly qualified professionals who provide services in Spain to startups or who carry out training, research, development and innovation activities, for which they receive a remuneration that represents more than 40% of their total income. 

Regarding the latter two activities, the restriction arising from the fact that the impatriate cannot obtain income that would be deemed as revenue obtained through a permanent establishment located in Spanish territory will not be applicable. However, any income obtained from such economic activities will be subject to taxation in Spain, irrespective of its source (worldwide income taxation), which was already the case.

  • Becoming a director of a Spanish company, regardless of the direct or indirect stake they hold therein.
  • Becoming a director of a holding company, according to the terms of the Corporate Income Tax Act, if the direct or indirect stake in such holding is less than 25%. 

The benefits of the regime are now applicable to the impatriate's descendants under 25 years old (or descendants of any age if they are disabled) and to the impatriate's spouse (or the parent of the descendants, if the partners are not married), if they meet the following requirements:

  • They have moved to Spanish territory, either with the impatriate or within the first fiscal year in which the impatriate applies this special regime, provided that they acquire tax residence in Spain as a result of the move.
  • They have not been residents in Spain during the last five fiscal years.
  • They do not obtain income through a permanent establishment in Spain. 
  • The sum of the net taxable income for the impatriate's descendants or partners in each fiscal year is less than the impatriate's.

To conclude, the current regulation on Spanish citizenship acquisition and the special tax regime for impatriates, offers interesting new possibilities for those who may qualify. Effective pre-immigration advice and tax planning is crucial to determine the option most suitable for each case.

Contact Information
Rosa Ros
Team Leader

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