New immigration law 2014

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Delete this box and insert your firm logo. Top of the wing should sit on the gridline aboveWhat does Spain have to

offer now?New Immigration Law for investments and other activities

Delete this box and insert your firm logo. Top of the wing should sit on the gridline aboveNew Immigration Law for investments and other

activities

• The new Law aimed at supporting the entrepreneur and their business activities that facilitate development, growth and internationalisation, and to encourage an entrepreneurial culture and a favourable environment for general economic activity.

• Introduces a new specific framework for qualified immigration and investors and therefore it contributes to the international mobility of professionals and investors to Spain, and to the attraction of foreign investment in order to improve the competitiveness and innovation capacity of companies located in Spain.


New Legal Framework

Fast and specialized process for visa and residence for:

Investors

Entrepreneurs

Executive and professional staff

And scientist and researchers


General Advantages of the Law1. Issuance of a residence visa for investors and entrepreneurs is enough to allow reside in Spain

for at least one year.

2. A fast procedure to obtain this kind of Visa: 10 days from the application at the Spanish Consulate.

3. Foreign investors wishing to reside in Spain for more than one year, may obtain a residence permit for investors, which is valid throughout national territory.

4. A fast procedure to obtain this Residence authorization: 20 working days from the application.

5. The family (spouse and children under 18 or older disabled children) may also apply for permits at the same time or after the main applicant.

6. The residence allows the foreign to travel (not reside) into SCHENGEN TERRITORY.

7. There is a single authorization for both living and working in Spain.

8. The residences may be renewed even when there are absences of over six months in a year in the case of residence visas and permits.

9. The National Employment Situation will not be considered for permits regulated under this Law.

Delete this box and insert your firm logo. Top of the wing should sit on the gridline aboveGeneral Requirements for all

Categories

18 years old or above.

Not considered as a illegal situation in Spain.

No criminal records.

Having a public or private health insurance.

Having enough economic resources for the applicant and the member of his family for covering

living expenses. (*)

(*) Monthly amount: applicant € 2.130,04 (2013) and each members €532.51 (2013). In case of

executives and highly qualified professionals, it would be proven by their employment contract

with a company, entity or R&D program.


Investors visa and Residence authorization : specific requirementsForeigners who make a significant economic investment in Spain, fulfilling the followings:

Real Estate: Invest over €500.000 in Real Estate located in Spain (total minimum investment free of charges and encumbrances) which may consist of the purchase of several properties of residential, tourist, rural, commercial or industrial nature, rural land, developed land, buildings under construction, or decrepit buildings.

Public debt amount to at least 2 million €

Spanish companies shares or quotas, or deposits in Spanish banks, for a minimum 1 million €.

Business projects in Spain with relevant impact from the perspective of general interest or scientific or technological innovation. Such projects must either:

Created jobs in Spain

Have an important socio-economic impact in the geographical area in which the employment activity is to be carried out

Delete this box and insert your firm logo. Top of the wing should sit on the gridline aboveInvestors visa and Residence

authorization: process1. Applying for an investor visa

This visa will allow the foreigner to enter and stay in Spain for a maximum period of one year.

Where to apply?

The Spanish Consulate of the applicant’s place of residence (in person or by a duly accredited representative)

How long is the process?

The process will be resolved in maximum 10 days (except for countries where and additional query is required)

Documentation:

• Applicant form

• Documents showing that general requirements are fulfilled (valid passport, medical certificate, health insurance, policy records, proof of economic means…)

• Application fees

• NIE number (Foreigners Identification Number) if the applicant does not have a NIE yet, he will have to apply for it before apply for the visa.

• Evidence of investment.


authorization: process• Evidence of the investment:

Real estate goods

Certificate with information of possession and charges of the Property Registry. If at the moment of the visa application, the property is still been registered, Certificate of the Property Registry stating that the acquisition document has been submitted and certificate of tax payment.

Spanish public debt securities

Certificate of the financial entity or the Banco de España stating that the applicant is the only title holder of the investment during at least 5 years.

Spanish companies’ shares

Unquoted shares: investment declaration of the Foreign Investments Registry (Ministry of Economy and Competitiveness).

Quoted shares: certificate of the financial intermediary, stating that the applicant has made the investment according to this rule.

Bank deposits in Spain

Certificate of the financial entity stating that the applicant is the only title holder of the bank deposit.

Business projects in Spain considered to be of public interest reasons:

Favorable report issued by the Spanish Economic and Trade Office of the Embassy of Spain Economic and Trade Office of the Embassy of Spain in charge of the territory where the person submits the application


authorization: process2. Applying for an investor authorization

This authorization will be valid for two years and it can be renewed for further terms of two years, if the investment is maintained.

Where to apply?

The application is made in the Spanish Unit for Large Companies (Madrid), directly or by a duly accredited applicant.


The process will be resolved in maximum 20 working days.

Stay requirements?

The authorization holder will not need to stay a minimum period in Spain to renew it.

Be holder of a valid residence VISA for investors

Have travelled to Spain at least once during the authorized visa period.

Long-term residence permit

The investor can choose to have continued legal and fiscal residence in Spain. In this case, after five years, the foreigner will be able to apply for a long-term residence permit.

The minimum stay will be then 183 days per year and a maximum time out of Spain of ten months within those five years.

Delete this box and insert your firm logo. Top of the wing should sit on the gridline aboveEntrepreneurs and Business

Activity

Who can apply?

Foreigners who would like to develop an entrepreneur and innovative activity with special economic interest for Spain

Where to apply?

At the Spanish Consulate.


Once all the documentation have been submitted the process will be resolved in maximum 10 working days (except countries where an additional query is required)

Delete this box and insert your firm logo. Top of the wing should sit on the gridline aboveEntrepreneurial and Business

Activity

Entrepreneurial activity is taken to mean any innovative activity of special economic interest to Spain that, as such has obtained the favorable report from the Central Government agency.

The assessment gives special priority and consideration to the creation of jobs in Spain.

The following will also be taken into account:

a) The professional profile of the applicant.

b) The business plan, including the product, service or market analysis and financing.

c) The added value for the Spanish economy, innovation or investment opportunities.

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Activity: process1. Applying for a visa to enter and stay in Spain Apply for a visa to enter and stay in Spain for a one-year period for the sole of primary purpose

of making prior arrangements for operating a business. For this purpose, it must be supported by a favorable report from the General Directorate of

Trade and Investments of the Spanish Economy and Competitiveness Ministry. There are not a minimum invest requirement amount.

2. Applying for the entrepreneurs and business activity residence Once the company is created, the visa holder will be able to apply for the entrepreneurs and

business activity residence at the Spanish Unit for Large Companies (Madrid) directly or by a duly accredited applicant.

The entrepreneur will not need to exit Spain to apply for such an application. This authorization will be valid for two years and it can be renewed for further terms of two

years, if the business activity is maintained. Once all the documents have been submitted, this process will be resolved in maximum 20

working days.

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professionals authorizationsWho can apply?

The companies wanting to hire foreign employees can apply for this authorization (valid for the whole of Spain) in any of the following cases:

a) Executives and highly qualified professionals of a company or group of companies that fulfill any of the following requirements:

An average staff of more than 250 employees in Spain

An annual net turnover in Spain exceeding 50 million

An equity or net assets value in Spain exceeding 43 million

An annual average gross investment volume from abroad of a minimum of €1 million in the

three years immediately before submission of the application

Companies with an investment stock value over 3 million. SMEs belonging to a Strategic Sector, which are, tentatively: information and

communications technologies, renewable energies, the environment, water and water treatment, health sciences, bio-pharmaceuticals and bio-technology and aeronautics and aerospace.

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professionals authorizationsb) Executives and highly qualified professionals of a business project in Spain that represent either:

A significant increase or maintenance of employment within the company, the activity sector or region where the activity is to be carried out.

A project fostering the economic activity in the region. Interest reasons for the trade and investment policies in Spain. A significant contribution to scientific and/or technological innovation.

A favorable report from the Spanish authorities will be required.

c) Graduates and postgraduates from renowned Universities or Business Schools.

Where to apply? The application is to be made by the company in the Spanish Unit for Large Companies (Madrid) directly or by a duly accredited applicant.

How long is the process? As the other processes it will be resolver in maximum 20 working days.


Intra-corporate transfersWho? Companies or group of companies that would like to transfer to Spain one or more foreigners in the framework of a labor relationship or to develop professional training.The company may be set up in Spain or in another country.This will be valid for the whole Spanish Territory.

Requirements: There must be a real business activity and company or group of companies The foreigner must have a Graduate Degree or minimum 3 years of work experience. There must exist a previous and continuous labor or professional relationship of at least 3

months with one or several companies of the group. Providing documents of the company in which the transfer is accredited.

Where to apply?

The application is made in the Spanish Unit for Lare Companies (Madrid), directly or by a duly accredited applicant.


The process will be resolved in maximum 20 working days

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authorizations

Who?Private and public companies and other entities wanting to hire foreign employees developing training, research, development and innovation activities. They must be, either:

Research staff Scientific and technical staff: developing scientific research, development or

technological innovation activities. Researchers working in a research organism, in the framework of an agreement. Universities or business schools teachers

Where to apply?

The application is made in the Spanish Unit for Lare Companies (Madrid), directly or by a duly accredited applicant.


The process will be resolved in maximum 20 working days

Delete this box and insert your firm logo. Top of the wing should sit on the gridline aboveGeneral benefit of residence

under this law Education: Like Spanish residents, 16 years free education.

University in Spain is not total free, legal foreign people with Residence Authorization has the

same rights in Education like the Spanish citizens.

Medical: Primary assistance, or total assistance for residents who has total earnings under 100.000 €/year.

Total medical assistance and hospitals for those who pay Social Security in Spain, as a self employee or employee.

Travel: Residence Authorizations holders can travel into Schengen Territory, not live in another country.

Spanish nationality requirements clarification: To apply for Spanish Nationality, the applicant needs to provide evidence of continuous resident in Spain during 10 years.As the Law allows foreigners to extend their Residence authorization even when there are absences of over six months in a year, applicants may never have continued residence for 10 years to apply for the Spanish nationality.

Tax resident: if the investor didn’t lie in Spain for more than 6 months per year (or 183 days per year) he never been considered tax resident in Spain.

Delete this box and insert your firm logo. Top of the wing should sit on the gridline aboveReal Estate related tax and

expenses IVAIn general terms, the acquisition of new buildings and urban land are subject to VAT at a rate of 21% (effective from 1 September 2012).

Transfers of rural lands, and used buildings are exempt from VAT. Used for this purpose means that the building is transferred for the second or subsequent time, except when the building is acquired for rehabilitation. Nevertheless, the option to VAT may be implemented and, accordingly, the transfer may be subject to VAT under certain circumstances.

Letting of commercial property is always subject to 21% VAT. ITPA transfer tax, typically of 8%-10%, depending on the location of the real estate, is levied on transfers not subject or exempted from VAT. The transfer of real estate qualifying as a going concern is subject to transfer tax as opposed to VAT.

Transfers of shares in companies where at least 50% of their assets consist of property in Spain are subject to transfer tax when, as a result of the transfer, the acquirer achieves a dominant position, which is deemed to have happened when the acquirer’s share capital in the company rises to more than 50%. It should be noted that the Spanish regulations in this respect have been subject to the EU scrutiny.


expenses

IBI (Council tax)

This tax is the Spanish equivalent of the rates and is collected by local government.The tax base is the cadastral value of the property and the rate varies from 0.405% to 1.166% depending upon the region.

Payment period is determined by the local authority

Stamp duty

Normally, a 0.5% to 2% stamp duty arises jointly with VAT, and when some transactions related to real estate operations are documented in a public deed, such as mortgages, new building deeds, etc.


expenses Property tax (Wealth tax for non-residents (Patrimonio))

This tax was eliminated as from 01/01/2008, then reintroduced in September 2011 for the years 20011 & 2012, then extended to 2013, with several important changes and other issues that are explained in depth in the section on the Spanish Patrimonio wealth tax Description: Everyone who owns property in Spain (residents and non-residents alike) has to pay an annual wealth tax. This tax is collected by regional governments.

The tax is based on the net value of their assets in Spain after permitted deductions, such as mortgages or another value deemed appropriate by the tax authorities, with a tax-free allowance of €700,000. The tax rate works on a sliding scale with marginal rates starting at 0.2% and rising to 2.5%. NotaryThe fees of the notary depend on each one fee rates.


expenses Rental income tax

Income tax for non-residents who rent out their property:

If you:

1) do not reside in Spain2) own property in Spain and 3) rent out your property.

(If you rent out your property to a Spanish company the company will deduct tax at source and pay it to the tax authorities.

Under these circumstances a non-resident is not obliged to present the forms 210 or 215.)

Tax base: The tax base is the net rent, deductions of expenses allowed.

Tax rate: 24,75% (temporarily increased for 2012, 2013 and 2014).