In order to encourage both national and international investment, the Government has passed a draft of the new “law of entrepreneurs”. Although the draft is still awaiting final approval, the basic guidelines of the future law have been set, which include the development of business projects in Spain, as well job creation.
However, one of the most important measures adopted in this new regulation is the granting of residence permits to those who:
a) Create employment through the establishment and implementation of business projects;
b) Foreigners who invest in business projects that create jobs or who have a relevant impact from the perspective of socio-economic or scientific and technological innovation as well as if they made a significant investment or business of general interest project.
c) Invest in properteies located in Spanish territory in a quantity greater than €500,000 (total minimum investment, which can consist in the purchase of several properties).
d) Take on public debt amounting to € 2,000,000.
Other conditions that have been set are the following:
a) Not to be an EU citizen.
b) Not to be in Spain illegally.
c) Have no criminal records in Spain or in the countries where they have resided in the last five years.
d) Have either a public or private health insurance and sufficient economic resources.
e) The buyer must use their own capital and not have to resort to funding from other sources for the purchase.
The Government also intends to create a centralised office for those who request this type of residence permit, aiming to unify and streamline procedures.
Other important innovations include a specific tax regime for entrepreneurs, which will allow different tax incentives on income tax to be applied when investing in or financing start-ups. Also, the law will attempt to simplify and facilitate procedures for the creation and closure of companies.
Until the above regulation enters into force, temporary residence permits will continue to be regulated be the Royal Decree 557/2011, of 20 of April, which applies to those foreigners who are in Spain legally for a period of between ninety days and five years.
The initial residence permit has a duration of only one year and applicants must comply with a series of legal criteria (not be in Spain illegally, not have a criminal record for crimes committed in the last five years, etc.) and must hand in a multitude of documents (passport, professional qualifications, etc.)
From Rodriguezbernal.com we will keep readers up to date with the legal reforms that will come about with the entry into force of new laws in this area, as well as for more details of the current procedure for setting up a company in Spanish territory.
Article by Mark Athos Franklin, native English lawyer at the Rodriguez Bernal legal practice.