He made the comments during a visit to the municipality of Dos Hermanas to participate in an event on social housing, El Pais reported.

“We are going to take the necessary measures to guarantee that housing is a right and not a mere speculative business”, he said.

“Today, 94 out of every 100 such visas are linked to real estate investment…in major cities that are facing a highly stressed market and where it’s almost impossible to find decent housing for those who already live, work and pay their taxes there,” Sanchez said.

He added that the government would launch the process to eliminate the scheme in today’s (9 April) weekly cabinet meeting after studying a report submitted by the Housing Ministry

The programme awards non-EU citizens investing at least €500,000 – without taking out a mortgage – in Spanish real estate a special permit allowing them to live and work in the country for three years.

The Spanish golden via was launched in 2013 as part of the national strategy to boost the Spanish economy and increase foreign investment.

Farro & Co will be led by Nirbhay Handa and will initially target markets in China, India, the Middle East and southeast Asia.

Its services include migration by investment, citizenship acquisition, skilled visa assistance, business incorporation, international real estate services and more.

It also goes beyond traditional immigration services to provide advisory services in areas such as wealth management, portfolio asset allocation, structuring and estate planning and philanthropy through Farro Capital.

“We want to challenge existing offerings in the market by bringing together a unique combination of advisory capabilities that empower clients to build a global legacy with absolute clarity. Our team believes that without a thorough understanding of the potential wealth impacts that immigration strategies could have on families, current firms fall short in addressing the sophisticated needs of clients today,” said Handa.

Farro & Co also strengthened its leadership this month with the appointment of Tiffany Ong as partner for north Asia. Ong has more than 15 years of private client experience with Bank of China and RHB and will drive Farro & Co’s growth in China, Hong Kong and Taiwan.

Meanwhile, Abhishek Menon also joined as partner for the Middle East, where he will be responsible for building out the firm’s Middle East and south Asia presence. He previously worked at Deutsche Bank.

For more insight on asset and wealth management in Asia, please click on www.fundselectorasia.com

Then a Spanish ‘Digital Nomad’ visa might be the answer, writes Jason Porter, business development director of Blevins Franks.

It brings tax breaks too.

A recent report issued by the House of Lord’s Economic Affairs Committee suggests that 565,000 people left the UK jobs market from March 2020 to date – most of whom were believed to have taken early retirement. Many of those would have moved to Spain – the UK’s favourite retirement destination.

Would they have been one of them if they had been old enough to access their pension?

If they are in their early 50s and dream of retiring to sunnier European climes, then the Spanish digital nomad visa might act as an interesting stopgap, while they work away the last few years before they can retire. What better way can there be of doing that in a warmer, more relaxed environment, with a lower cost of living?

They will also benefit from a very attractive tax rate for up to five years.

If the client has an understanding employer who they think would be open to them performing their role from a desk in Spain, or they have a number of contracts, then this might be an option worth investigating.

Not only might this visa allow them to get to Spain sooner than they thought, but it will also mean they pay tax on earnings at significantly lower rates than they would in the UK.

As they are regarded as a non-Spanish resident for all other taxes they should not suffer Spanish taxes on:

• Interest, dividends or other investment income where this arises outside of Spain;
• Capital gains from disposals of non-Spanish assets; and
• Wealth tax on non-Spanish assets.

Spain has been talking for years about introducing a specific visa for attracting wealthy remote workers and finally delivered at the end of 2022.

They repurposed an old 2005 Tax Decree, known as the ‘Beckham Law’ (after David Beckham who was one of the first foreigners to take advantage of it when he moved to Real Madrid), in the form of its new ‘tele-worker’ tax legislation.

This new digital nomad visa option limits Spanish tax to a flat rate of 24% on the first €600,000 of earnings for up to five years (any excess each year is taxed at the top rate of tax).

Under this option the taxpayer does not benefit from personal allowances or any other reliefs and deductions normally due, so it will require them to have relatively substantial annual earnings to make it not only financially worthwhile, but also to justify the initial cost of any move to Spain.

While some advisers have stated it is open to both employed and self-employed people, this may not be the case, as ‘first adopter’ freelancers are finding in their dealings with the Spanish immigration authorities. Any employer cannot be a Spanish entity and must have been in existence for at least one year and the employment contract for at least three months.

They must hold a suitable qualification or have at least three years’ work experience. They will need to spend at least six months a year in Spain and remain non-UK tax resident.

Spain has been under considerable pressure to get this legislation on the books, and initial applicants are finding some of this granularity still needs finessing. Certain areas such as whether the self-employed qualify and what is an acceptable shareholding need more work and it is inevitable there will be some minor clarifications and legislative tweaks along the way.

While the digital nomad visa initially appears interesting to young tech-types who can work anywhere, closer inspection confirms it is really designed for the wealthier remote worker, who has sufficient earnings to fully benefit from the 24% tax rate. So they have to be sufficiently committed to invest in a long-term lease or intend to exchange their UK home for one in Spain and similarly prepared to pay the cost of private medical insurance each year they benefit from the visa.

But the total tax benefits could be tremendous when you factor in the other Spanish tax savings which might arise on investment income, capital gains and wealth tax.

This article was written for International Adviser by Jason Porter, business development director of Blevins Franks.

As demand for such routes continues to increase, the options, particularly in the EU, are dwindling with the recent closure of various programmes, writes Isobel Neilson, a senior manager at global immigration law firm Fragomen.

Global investment migration is a complex and everchanging landscape to navigate. Where are individuals currently looking to establish residence or citizenship and what options are available to them? Why are these ‘golden visa’ routes being shut down and are there alternatives? What lies ahead in the future of investment migration?

Residency by investment, often referred to as ‘Golden Visas’, offer applicants and their families the ability to live, work, study and access the healthcare system of the jurisdiction in question.

Residency often leads to citizenship following a period of physical residence, generally between five-10 years, provided certain conditions are met, often including local language requirements.

EU citizenship, once obtained, enables individuals to benefit from free movement, which is the ability to live and work freely in any EU member state. Citizenship by investment, by contrast, offers a more direct route to citizenship.

The coronavirus pandemic coupled with political issues in recent years, both national and geopolitical, continue to create global uncertainty which has precipitated an increase in individuals looking to establish residence or citizenship for their families in an alternative jurisdiction.

In an increasingly global and interconnected world there is a strong desire for the ability to travel and conduct business freely across multiple jurisdictions. This type of strategic residency planning can offer not only flexibility but also security by lowering exposure to regional volatility.

2022 saw the abrupt closure of the UK Tier 1 Investor route and Ireland recently followed suit with its Immigrant Investor visa. Both governments cited security concerns as a driving factor behind the decision. Portugal’s PM recently announced the planned closure of their immensely popular investor visa, in an apparent attempt to fight against price speculation in real estate.

So what options are still available?

Spain offers an investor visa with a minimum investment ranging from €250,000 to €2m (£1.78m, $2.14m), depending on the type of investment and with investment in real estate still permitted, which is attractive given how popular Spain is for holiday homes.

Italy offers an investor visa with a minimum investment of €500,000 to €2m, depending on the type of investment, real estate is not permitted.

Italy and Spain both offer attractive tax breaks to foreign investors.

Greece offers a more cost-effective investor visa with a minimum investment of €250,000 to €400,000, depending on the type of investment, real estate is still permitted.

There is no physical residence requirement to maintain the visas in any of the above three countries, however the route to citizenship in each requires seven to 10 years of full-time residence.

The tax-haven Monaco has a long-established residency by investment programme which requires a minimum cash deposit of €500,000 plus cost of property rental/purchase. Residents can benefit from favourable personal and corporate tax rules.

This status does not lead to citizenship and has a strict residency requirement to maintain the status.

Malta continues to be the only jurisdiction in the EU to offer citizenship through Investment. The programme which was re-launched in 2020 offers citizenship within 12 to 36 months based on investment into a national development fund of either €600,000 or €750,000. There is a cap of 400 main applicants per year, and a total cap of 1,500 main applicants for the programme.

Retirees

There are alternatives that may enable applicants to achieve their objectives such as residency granted on the basis of passive income geared towards retirees; these are offered in Portugal, Spain, Italy and Ireland.

These are often quicker, more cost-effective alternatives but do require the applicant and their family to commit to spending the majority of their time in the jurisdiction. Some, like Portugal’s D7, allow work while most do not.

Digital nomad visas are now available in many jurisdictions globally. They usually require employment income from outside the jurisdiction in question. These are a great example of countries adapting to the changing immigration landscape and creating an attractive offering.

The reputation of a particular jurisdiction’s investment migration programme is a critical consideration and countries will need to ensure their programmes remain subject to stringent due diligence checks to protect against the risk of being undermined by illicit practices.

Another challenge going forwards for investment migration is going to be finding a new model, moving away from passive investment primarily in real estate, to allow for much more meaningful and active investment.

Individuals who historically would obtain golden visas are not those who will be able to commit to spending substantial time anywhere, but there are many other ways for applicants to demonstrate commitment to a country; by bringing their talent and expertise, creating jobs, and making more meaningful investments into industry and infrastructure.

Austria as an example – citizenship is granted for valuable contributions to Austria with job creation a very important part of that contribution.

If investment migration is able to evolve, there will be no shortage of interest in these programmes in their new iteration.

This article was written for International Adviser by Isobel Neilson, a senior manager at global immigration law firm Fragomen.

This comes several months after International Adviser reported that Portugal was set to axe the programme because it had “fulfilled its role”.

The scheme, called Authorisation of Residence for Investment Activity, targets non-EU nationals and allows them to receive residence rights in return for investments in the local property sector or the economy.

The Portuguese prime minister António Costa, said on 16 February said that his government would stop issuing new golden visas in order to “fight against price speculation in real estate”.

Property prices in the country had skyrocketed due to the number of expats buying real estate for second or holiday homes – thus leaving many local residents struggling to find adequate accommodation in big cities like Porto and Lisbon.

Changes had already been introduced as an attempt to mitigate this distortion in January 2022 – since then it has not been possible to apply for a golden visa on properties in Lisbon, Porto and the majority of the Algarve.

In November 2021, Portugal increased the minimum requirements of the golden visa programme. To qualify, people need:

• €1.5m (£1.3m, $1.4m) for capital investments;
• At least €500,000 for investment funds; and
• €500,000 for property investments and €350,000 for urban renovation in qualifying areas.

Since its inception, Portugal attracted €6.5bn in investments by foreign nationals, mainly from China, Brazil and South Africa, with most of the money going into property.

US expats are also among the most attracted to the scheme – leading to global advice firm Blacktower Financial Management launching an American desk specifically targeting those looking to move to Portugal.

End of an era

John Westwood, group chairman at Blacktower Financial Management, said: “It’s certainly the end of an era. The golden visa has been extremely popular and brought a lot of growth to the Portuguese economy over the years. The rising costs of housing and rentals is making it tough for many Portuguese citizens to find affordable housing. Ending the golden visa will hopefully improve this issue in the short term, while giving the government time to create a long-term solution to the problem.”

Jason Porter, business development director at Blevins Franks, said: “The exclusion of Lisbon, Porto, the Algarve and the Silver Coast in 2020 from the property qualification meant golden visa advisers had to look for other solutions. As real estate remained the most popular option, developing rental properties maintained the real estate price pressure, as well increasing the valuation in the geographical areas which continued to qualify.

“There has been an increase in advisers utilising other qualifying areas such as property rental portfolios, a Portuguese Investment Fund or business start-up. Inevitably, these schemes attempt to limit the risk to capital, whilst often providing safe, conservative returns – not what was originally envisaged of the scheme. The Portugal golden visa scheme is a reflection of similar schemes which have come and gone around the world – galloping real estate prices, absentee owners and the resulting outcry eventually outweighs the economic benefits to the point where the politicians act.

Portugal-based Mark Quinn, adviser at The Spectrum IFA Group, added: “Both clients and real estate agents complain that the stock of properties on the market is very small, yet this limited stock is met by an increasing number of potential buyers looking to relocate to Portugal from all over the world.”

He also highlights the option to apply for Non Habitual Residence (NHR), Portugal’s 10 year tax incentivised scheme available to new residents of the country.

“NHR is a status that has to be managed, as the benefits are not necessarily received automatically,” Quinn added. “It is therefore essential to plan properly (and carefully) to optimise the efficiency and value on offer from this scheme.”

EU crackdown and Ireland

Portugal is not the only country to close its ‘golden visa’ scheme, as in the last few days, the Irish government approved the closure of its immigrant investor programme (IIP) to further applications.

But overall, this comes many months after members of the European Parliament (MEPs) overwhelmingly decided to demand a ban on golden passports.

The vote – which saw 595 in favour, 12 against and 74 abstentions – followed commitments by the European Commission, France, Italy, Germany, the UK, Canada and the US to limit wealthy Russians with links to the government from accessing golden passports.

The European Parliament deemed citizenship-by-investment schemes as “objectionable from an ethical, legal and economic point of view and pose several serious security risks”.

There are still a handful of EU countries with golden visa schemes such as Malta, but the European Parliament is continuing to crackdown on the schemes.