For a long time, the vast majority of countries have restricted the ability of foreigners to reside permanently within their borders. Apart from specific initiatives to alleviate labor shortages in the labor market, it is difficult to obtain a permanent residence visa, especially in one of the most sought-after geographic areas, the European Union.

This has changed relatively recently due to two very relevant factors:

1. Governments understood that, as the population ages, the ratio of people of working age to those over 65 would inevitably fall below what is considered sustainable. It might help, but it would set off alarm bells among the more nationalistic sections of the population if thousands of uneducated people were brought in as labor. So it made sense for developed nations to open their borders to immigrants who could support themselves economically.
2. The real estate market in peripheral Europe was severely affected by the global financial crisis of 2008. Spain, Ireland, Portugal and Greece, among other countries, rushed to develop residential golden visas to help boost market recovery, granting their holders permanent residency privileges in their countries and, consequently, in the European Union. The real estate market benefited instantly, as the minimum investment required for such a visa became the minimum price for all properties.

Changes in priorities

As Buddhist practice teaches, the only thing that stays the same is change. The first factor that drove the Golden Visa change has been more than replaced by the second factor.

What is happening? Well, the number of European countries offering Golden Visas for permanent residency is shrinking as of 2023.

We believe that this movement can be attributed to a key force majeure: The original objective of the Golden Visa programs for permanent residence has been met. From late 2008 to date, residential real estate markets in Spain and peripheral European countries have rebounded, but, in contrast, many domestic residents are struggling or cannot afford to buy or rent a home.

So if the golden visa program created by the Spanish government to stabilize the housing market only leads to more problems, why maintain it?

Now, the demographic problems in Europe, including Spain, have not changed.

The disproportionate number of retired and elderly people not working continues to increase. Therefore, we believe that the governments of Spain, Portugal, Greece and others will find it difficult to collect enough taxes to support all those retirees. Therefore, making it possible for foreigners to legally reside in the country and contribute their own salaries to the economy is one way to close the funding gap.

These options are on the table right now and you should evaluate or seriously consider them, depending on your situation.

A new reality

With the phasing out of residential golden visas in Europe, there is a widespread belief that those with other types of long-term residency will have difficulty securing housing. The opposite is true.

There are no restrictions on the ability of, for example, the holder of a digital nomad visa, to buy or rent a home in Spain.

Digital nomads compete with Spaniards in a normalized real estate market, not with wealthy people who sometimes have not even visited Europe, but are looking for a second home or to invest in real estate. The Spanish government sees this as a win-win scenario.

On the other hand, long-term residents who meet the criteria will be able to apply for permanent residency or even nationality when their first permit expires. After that, if they have not already done so on their current visa, they will be able to work legally or set up a business.

Conclusion

In our opinion, as a consequence of the above changes, future immigrants from regions such as the United States, United Kingdom, Canada, India or Latin America will benefit very little from Spain's current golden visa climate.

In this new reality, our goal is to provide you with the context you need to successfully navigate this environment.

One of our investor clients asked us about buying a property in Spain to meet the requirements for legal residency through the golden visa. For some time, he had been considering the golden visa to extend his stay in the Schengen Area beyond the 90 days allowed for US passports. However, she was hesitant because she had read that even with a gold visa, she would still be limited to spending only 90 days in any 180-day period in another Schengen country.

Our client's existential question was, "What good is a gold visa to me?"

A gold visa, for example, in Spain, allows you to reside permanently in the country, which is part of the Schengen Area. This allows you to leave Spain to spend a 90-day period in another Schengen country and then return to Spain to start a new 180-day period. It also allows to keep the residence, even if the person decides not to live for example in Spain, if this is the country that grants the residence by investment.

However, for our client these advantages were not as favorable as he had first imagined. He thought, perhaps like many others, that paying 500,000 euros would give him unrestricted access to the entire Schengen Area.

The question he asked us raises many important issues:

1. Golden visa regimes are often surrounded by misconceptions. Many people misunderstand the advantages of a golden visa.
2. Golden visa regimes are not suitable for everyone. They are only relevant for a few people with certain international objectives.
3. Golden visa schemes are not the only means of obtaining residency in Europe. There are other options that may be more direct and suitable, depending on your situation and your objectives.
4. Investing in property does not require the use of a golden visa program. You can buy a home in Europe as an investment or for your lifestyle without the need to participate in a golden visa program.

In our office we have been guiding individuals and companies for more than 35 years on how to live, retire and do business in Spain. Depending on your objectives, you may want to consider other options, apart from the well-known golden visas. We will be happy to evaluate your case and advise you on the best option for you and your family.