USA – The Artist Visa

6 June 2019

  • USA
  • Immigration

The number of artists in the United States is significant. “Artists” as it is defined for immigration purposes at least. In fact, one of the most common visas is the O-1, also known as the Artist Visa. To be more precise, the O-1 visa is not reserved exclusively for artists, but for all those who can show extraordinary ability in certain fields, such as the arts.

The O-1 visa is destined for people who can demonstrate the following: 1) extraordinary ability in science, education, business, and athletics; or 2) extraordinary ability in the arts. This category is not limited to fine arts, performing arts and visual arts but includes any field of creative activity or endeavor. Photographers, designers, architects, writers and even hairdressers and chefs are all considered artists for immigration purposes and can qualify for an O-1 visa; or 3) extraordinary achievement in the motion picture or TV industries.

The difference among the three categories lies in the standard of proof. The most challenging cases are those for people with extraordinary ability in science, education, business, and athletics because they are reserved only for those who have risen to the very top of their field of endeavor, representing a very small percentage. A less stringent standard of proof is applied to those who try to make a case of extraordinary achievement in the motion picture or TV industries, where it is required that the O-1 visa beneficiary be outstanding, suggesting the beneficiary be well-known and exceptional. Finally, the category for people with extraordinary ability in the arts is the easiest to prove because a level of distinction is sufficient. To show distinction, beneficiaries need to present documentary evidence of their extraordinary ability in a specific field. To sum up, the art category is the broadest and the easiest to prove. As a result, it can be concluded that the United States, at least for immigration purposes, is an artist-friendly country.

There are further differences among the categories in the proof that needs to be presented to the United States Citizenship and Immigration Services (USCIS). More specifically, the first category, which is comprised of people with extraordinary ability in science, education, business, and athletics and grouped under the O-1A caption, is different from the other two (extraordinary ability in the arts and extraordinary achievement in the motion picture or TV industries), grouped under the O-1B caption.

To obtain an O-1A visa, the beneficiary is required to demonstrate that he or she has risen to the very top of his or her field by:

  • Evidence that the beneficiary has received a major, internationally-recognized award, such as a Nobel Prize, or
  • Evidence of at least (3) three of the following:
    1. Receipt of nationally or internationally recognized prizes or awards for excellence in the field of endeavor
    2.  Membership in associations in the field for which classification is sought which require outstanding achievements, as judged by recognized national or international experts in the field
    3. Published material in professional or major trade publications, newspapers or other major media about the beneficiary and the beneficiary’s work in the field for which classification is sought
    4. Original scientific, scholarly, or business-related contributions of major significance in the field
    5. Authorship of scholarly articles in professional journals or other major media in the field for which classification is sought
    6. A high salary or other remuneration for services as evidenced by contracts or other reliable evidence
    7. Participation on a panel, or individually, as a judge of the work of others in the same or in a field of specialization allied to that field for which classification is sought
    8. Employment in a critical or essential capacity for organizations and establishments that have a distinguished reputation

On the other hand, to obtain an O-1B visa, the beneficiary will have to show:

  • Evidence that the beneficiary has received, or been nominated for, significant national or international awards or prizes in the particular field, such as an Academy Award, Emmy, Grammy or Director’s Guild Award, or
  • Evidence of at least (3) three of the following:
  1. Performed and will perform services as a lead or starring participant in productions or events which have a distinguished reputation as evidenced by critical reviews, advertisements, publicity releases, publications, contracts or endorsements
  2. Achieved national or international recognition for achievements, as shown by critical reviews or other published materials by or about the beneficiary in major newspapers, trade journals, magazines, or other publications
  3. Performed and will perform in a lead, starring, or critical role for organizations and establishments that have a distinguished reputation as evidenced by articles in newspapers, trade journals, publications, or testimonials.
  4. A record of major commercial or critically acclaimed successes, as shown by such indicators as title, rating or standing in the field, box office receipts, motion picture or television ratings and other occupational achievements reported in trade journals, major newspapers or other publications
  5. Received significant recognition for achievements from organizations, critics, government agencies or other recognized experts in the field in which the beneficiary is engaged, with the testimonials clearly indicating the author’s authority, expertise and knowledge of the beneficiary’s achievements
  6. A high salary or other substantial remuneration for services in relation to others in the field, as shown by contracts or other reliable evidence.

It is worth noting again that there are two subcategories with different standards of proof within the O-1B: more stringent for people in the motion and television industries (outstanding) and easier to prove for those in the arts (distinction).

With regards to the proof needed, an O-1 case needs to demonstrate and provide evidence through publications, awards, and recommendation letters.

In an O-1 Application, the Petitioner needs to be either a US employer or a US Agent. The first needs to be a person or a business that will exclusively employ the beneficiary. An employment contract or, at least, a summary of the terms of the oral agreement can provide sufficient evidence to demonstrate the employer/employee relationship. On the other hand, a US Agent can be in the relevant field and business as an agent and can file the petition without committing to exclusively employing the beneficiary. In these cases, it will be required to provide an itinerary of planned or proposed events.

The O-1 visa can be granted for the duration of the beneficiary’s participation in the event, up to three years, which can be extended for 1 year if the event is extended. That is, unless… the O-1 visa holder already satisfies the requirements to become a US permanent resident. Indeed, the O-1 visa provides an opportunity to lead to highly sought-after and coveted “Green Card.”

Spanish Law on Entrepreneurship (Law 14/2013) has approved new cases where foreigners from non-European Union countries can obtain the residence permit in Spain through the execution of investments:

  1. Investments in real estate for an amount equal or higher than € 500.000 (Five Hundred Thousand Euros). The investment can be made in one or more properties, but at least € 500.000 should be free of encumbrances (mortgage, i.e.). If the price is higher than € 500.000, the rest of the amount could be paid through mortgage.
  2. Financial investments for a value equal or higher than 1 million Euros. This type of investment includes listed and non-listed shares, in case of non-listed shares they could be from already operating companies or newly incorporated ones, investment funds, and deposits in Spanish banks.
  3. Investment in Spanish sovereign debt for an amount equal or higher than 2 million Euros.
  4. To carry on a business project in Spain that was considered as being of public interest. To this purpose, one of these conditions should be met: creation of jobs, execution of an investment that has a positive impact in the region where it is located, or a relevant contribution to scientific or technological innovation.

The visa granted through the execution of these investments is valid during at least one year, and in order to obtain the residence permit some other requirements should be met:

  • to not stay previously in Spain in an illegal situation,
  • to have more than 18 years,
  • to not have criminal records,
  • to have a health insurance (hired from a company operating in Spain)
  • to have financial means for the stay in Spain (i.e. a bank deposit, or income from leases or dividends. Payroll does not qualify for this purpose).

If the above requirements are met, a two years residence and work permit could be granted. After this term, the residence permit can be extended for successive five years periods. The investments should be kept during all these periods. This permit does not request the foreigner to live in Spain for more than six months; therefore it will not be cancelled if the foreigner lives in another country.

The residence and work permit is granted to the individual who executes the investment. If he/she is married and/or has children or ancestors who depend on the investor, it is possible to apply for their visa at the same time or later on. It is possible to execute the investment through a company owned by the investor, provided it is not a company domiciled in a tax heaven country.

The Spanish visa allows free movements within the EU countries (Schengen space). The valid travelling document is the passport.

Foreigners who wish to carry on a self-employment project in Spain could obtain the work and residence permit, but through a different procedure than the above mentioned, and these cases the minimum investment amount is lower.

Investment in real estate

The investment in real estate could be in residential, commercial or industrial properties. The property could be leased to third parties before or after the acquisition, or used by the investor. For ambitious investors, there are several possibilities to structure the investment in buildings and apartments and to a higher return of the investment.

There are some costs related to the acquisition of real estate: the acquisition itself is taxed by Transfer Tax at rates ranging from 6 to 10% on the acquisition price, depending on each Spanish region where the property is located, to be paid by the buyer. Besides, the buyer should pay the Notary Public and Property Registrar’s fees, which approximately amount 3% of the acquisition price (the addition of both of them). These amounts are paid once, when the property is acquired.

The annual costs related to the ownership of real estate in Spain are the following ones:

  • IBI or local property tax, whose amount is calculated based on the value and location of the property.
  • “Community expenses”, that is those expenses related to the maintenance of the common areas of the building where the property is located: cleaning, lighting, etc.
  • In some cases, also a small tax for garbage should be paid to the Town Council.
  • Owners should file the Spanish Personal Income Tax Return, and pay a percentage between 1,1% and 2% of the property’s “cadastral value” (official value), in case the property is not leased to a third party. If the property is leased, the owner should also file the Personal Income Tax Return based on the amounts obtained from the lease.

Besides, owners should also pay the expenses related to their property: ordinary maintenance expenses, insurance, electricity and water, etc.

In Spain, the property right is considered as a full right, which implies that the owner can use the property by himself, can lease it to third parties, can mortgage or encumber it, can sell or gift it to any third party and can pass it to his heirs through a will.

The only limits to the use of the property by its owner or the persons appointed by him are those established by the civic rules regarding noises, pets, exterior image of the property, etc.

Regarding the lease of the property, in principle it is free, and the rights and obligations of landlord and tenant are those provided by the private lease agreement entered between both parties and the Spanish Urban Leases Law (Ley de Arrendamientos Urbanos). However, nowadays many Spanish cities (and specially Barcelona) have approved strong limits to the so called touristic leases, which are the short term (days or weeks) leases, and request a special license.

It is important to point out that foreigners who become residents in Spain can grant their will according to Spanish inheritance laws (according to EU Regulation 650/2012), which slightly vary depending on each Spanish region. In Catalonia, for example, the testator can freely appoint who will be his heirs.

Financial investment

Financial investments can be executed through different types of targets, being always the minimum amount 1 million Euros:

  • Shares of companies listed in the Spanish Stock Market.
  • Shares of non-listed companies, which could be already operating companies or newly incorporated ones. In both cases, there are no limits as regards the percentage of shares that can be owned by foreigners, and the activity sectors restricted to non EU foreign investment are very few (gambling, defense, aviation, TV and radio). Foreigners can be appointed Directors of Spanish companies with the only requirement of having previously obtained the so called “N.I.E.”, which is the Spanish identification number for foreigners.

In case of a newly incorporated company, the € 1 million requested as investment would constitute the company’s share capital, and can be used for the startup of the company’s activities: for example, acquisition of goods, payment of salaries and rentals, payment of purveyors and subcontractors, etc.

Spanish companies have access to all European markets and have a privileged position for trading with Latin American countries.

  • Investment funds: Spanish financial entities offer a very wide range of investment funds, from very conservative to high risk.

Deposit in a bank

The main advantage of a real estate investment compared to a financial investment is that the requested amount is only € 500.000 for real estate, while for a financial investment is twice this amount. During the past years since the Law on Entrepreneurship became in force, investment in real estate has been the most popular way for obtaining the residence permit in Spain, probably because at that time (2013-2016) real estate market prices were quite low due to the crash in 2008.

However, the process to acquire a property in Spain is not so easy compared to the acquisition of a share in an investment fund or making a bank deposit: the investor has to choose the property, which normally requires one or two visits to Spain, the price and sale conditions have to negotiated and drafted, the purchase deed has to be signed before a Notary Public (by the investor or his proxy), there are taxes and expenses related to the acquisition, and once the property is acquired, it is necessary to pay ongoing expenses and taxes, and maintain the property in good condition.

Compared to this, the investment in funds or making a bank deposit only requires one visit to the bank by the investor, in order to sign the correspondent documents.  There are not related taxes or expenses, and the liquidity of the investment is  full  (that is,  the investment can be sold at any moment,  quite probably at the same or  at a higher price, but this is not guaranteed for real estate investments).

How to open and operate a bank account in Spain

In Spain, banks apply the regulations regarding anti-money laundering, which include the KYC (Know Your Client) rules and the obligation to prove the legal origin of the funds. The KYC rules imply the need for the investor to appear personally before the bank at least once, previously to operating the bank account. The legal origin of the funds can be proved through different means:

  • In case of employees, through the payroll splits, or a certificate issued by the employer, or the investor’s personal income tax return.
  • In case of self-employed individuals, through their personal income tax return, or another type of documents proving their professional activity.
  • In case of company owners, through the company’s financial statements.
  • If the investor has obtained the funds necessary for the investment through personal loans, the loan agreements should be provided, plus the documents proving the legal origin of the funds provided by the lenders.
  • Other documents, for example, regarding dividends or income from the lease of properties owned by the investor could be provided.

All documents should be legalized by a Notary Public or the Spanish Consulate, and sworn translated into Spanish.

Please note that this article is aimed to provide a general overview on Spanish rules regarding the above matters, but it does not constitute any kind of comprehensive information on them, and in any case specific legal advice should be sought prior to taking any decision.

Individuals coming to Portugal and here becoming residents for the first time, can be entitled to some important tax benefits under the “non habitual resident rules”. These rules are an important contribution for making Portugal one of the most attractive destinations for retired individuals, but also for entrepreneurs.

Who can benefit?

A non habitual resident is an individual becoming resident for tax purposes in Portugal for the first time in the last five years period. To become resident for tax purposes, one should be in Portugal for more than 183 days in any 12 months period or for a shorter period but in such conditions that the intention of becoming resident is sufficiently clear. After becoming resident for tax purposes and register as such before the Tax Authorities, the individual must register as a non habitual resident to be able to benefit from this regime.

High Value Added Activities.

Some of the benefits under the non habitual resident rules are only applicable to income arising from high value added activities. These activities include architects, engineers, artists, auditors and tax consultants, medical professions, university teachers, top managers and other liberal professionals in areas such as informatics (software and hardware) development and consultancy, science investigation and design.

For how long?

The benefits arising from the non habitual resident status are valid for a ten year period and depend on the individual remaining as resident in Portugal for tax purposes. If, for any reason, the individual ceases to be resident, he can later benefit from the remaining period by becoming resident again.

What are the benefits?

Individuals becoming non habitual resident benefit from a more favorable tax treatment regarding both income from Portuguese source and income from foreign sources.

As to the income from Portuguese source arising from employment and self-employment, it is subject to a special tax of 20%. This benefit is only applicable to non habitual residents earning income from high value added activities.

As to the income from foreign sources arising from employment and pensions, it is exempted from taxes in Portugal, in most cases. This exemption also includes income arising from self-employment in high value added activities, and from intellectual and industrial property, capital and real estate gains.

Giulia Sambugaro

Practice areas

  • Contracts
  • Corporate
  • Hospitality
  • Immigration
  • Real estate
  • Trademarks and patents

Contact Giulia





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    The Residence permit in Spain through investment

    7 November 2018

    • Spain
    • Immigration

    The number of artists in the United States is significant. “Artists” as it is defined for immigration purposes at least. In fact, one of the most common visas is the O-1, also known as the Artist Visa. To be more precise, the O-1 visa is not reserved exclusively for artists, but for all those who can show extraordinary ability in certain fields, such as the arts.

    The O-1 visa is destined for people who can demonstrate the following: 1) extraordinary ability in science, education, business, and athletics; or 2) extraordinary ability in the arts. This category is not limited to fine arts, performing arts and visual arts but includes any field of creative activity or endeavor. Photographers, designers, architects, writers and even hairdressers and chefs are all considered artists for immigration purposes and can qualify for an O-1 visa; or 3) extraordinary achievement in the motion picture or TV industries.

    The difference among the three categories lies in the standard of proof. The most challenging cases are those for people with extraordinary ability in science, education, business, and athletics because they are reserved only for those who have risen to the very top of their field of endeavor, representing a very small percentage. A less stringent standard of proof is applied to those who try to make a case of extraordinary achievement in the motion picture or TV industries, where it is required that the O-1 visa beneficiary be outstanding, suggesting the beneficiary be well-known and exceptional. Finally, the category for people with extraordinary ability in the arts is the easiest to prove because a level of distinction is sufficient. To show distinction, beneficiaries need to present documentary evidence of their extraordinary ability in a specific field. To sum up, the art category is the broadest and the easiest to prove. As a result, it can be concluded that the United States, at least for immigration purposes, is an artist-friendly country.

    There are further differences among the categories in the proof that needs to be presented to the United States Citizenship and Immigration Services (USCIS). More specifically, the first category, which is comprised of people with extraordinary ability in science, education, business, and athletics and grouped under the O-1A caption, is different from the other two (extraordinary ability in the arts and extraordinary achievement in the motion picture or TV industries), grouped under the O-1B caption.

    To obtain an O-1A visa, the beneficiary is required to demonstrate that he or she has risen to the very top of his or her field by:

    • Evidence that the beneficiary has received a major, internationally-recognized award, such as a Nobel Prize, or
    • Evidence of at least (3) three of the following:
      1. Receipt of nationally or internationally recognized prizes or awards for excellence in the field of endeavor
      2.  Membership in associations in the field for which classification is sought which require outstanding achievements, as judged by recognized national or international experts in the field
      3. Published material in professional or major trade publications, newspapers or other major media about the beneficiary and the beneficiary’s work in the field for which classification is sought
      4. Original scientific, scholarly, or business-related contributions of major significance in the field
      5. Authorship of scholarly articles in professional journals or other major media in the field for which classification is sought
      6. A high salary or other remuneration for services as evidenced by contracts or other reliable evidence
      7. Participation on a panel, or individually, as a judge of the work of others in the same or in a field of specialization allied to that field for which classification is sought
      8. Employment in a critical or essential capacity for organizations and establishments that have a distinguished reputation

    On the other hand, to obtain an O-1B visa, the beneficiary will have to show:

    • Evidence that the beneficiary has received, or been nominated for, significant national or international awards or prizes in the particular field, such as an Academy Award, Emmy, Grammy or Director’s Guild Award, or
    • Evidence of at least (3) three of the following:
    1. Performed and will perform services as a lead or starring participant in productions or events which have a distinguished reputation as evidenced by critical reviews, advertisements, publicity releases, publications, contracts or endorsements
    2. Achieved national or international recognition for achievements, as shown by critical reviews or other published materials by or about the beneficiary in major newspapers, trade journals, magazines, or other publications
    3. Performed and will perform in a lead, starring, or critical role for organizations and establishments that have a distinguished reputation as evidenced by articles in newspapers, trade journals, publications, or testimonials.
    4. A record of major commercial or critically acclaimed successes, as shown by such indicators as title, rating or standing in the field, box office receipts, motion picture or television ratings and other occupational achievements reported in trade journals, major newspapers or other publications
    5. Received significant recognition for achievements from organizations, critics, government agencies or other recognized experts in the field in which the beneficiary is engaged, with the testimonials clearly indicating the author’s authority, expertise and knowledge of the beneficiary’s achievements
    6. A high salary or other substantial remuneration for services in relation to others in the field, as shown by contracts or other reliable evidence.

    It is worth noting again that there are two subcategories with different standards of proof within the O-1B: more stringent for people in the motion and television industries (outstanding) and easier to prove for those in the arts (distinction).

    With regards to the proof needed, an O-1 case needs to demonstrate and provide evidence through publications, awards, and recommendation letters.

    In an O-1 Application, the Petitioner needs to be either a US employer or a US Agent. The first needs to be a person or a business that will exclusively employ the beneficiary. An employment contract or, at least, a summary of the terms of the oral agreement can provide sufficient evidence to demonstrate the employer/employee relationship. On the other hand, a US Agent can be in the relevant field and business as an agent and can file the petition without committing to exclusively employing the beneficiary. In these cases, it will be required to provide an itinerary of planned or proposed events.

    The O-1 visa can be granted for the duration of the beneficiary’s participation in the event, up to three years, which can be extended for 1 year if the event is extended. That is, unless… the O-1 visa holder already satisfies the requirements to become a US permanent resident. Indeed, the O-1 visa provides an opportunity to lead to highly sought-after and coveted “Green Card.”

    Spanish Law on Entrepreneurship (Law 14/2013) has approved new cases where foreigners from non-European Union countries can obtain the residence permit in Spain through the execution of investments:

    1. Investments in real estate for an amount equal or higher than € 500.000 (Five Hundred Thousand Euros). The investment can be made in one or more properties, but at least € 500.000 should be free of encumbrances (mortgage, i.e.). If the price is higher than € 500.000, the rest of the amount could be paid through mortgage.
    2. Financial investments for a value equal or higher than 1 million Euros. This type of investment includes listed and non-listed shares, in case of non-listed shares they could be from already operating companies or newly incorporated ones, investment funds, and deposits in Spanish banks.
    3. Investment in Spanish sovereign debt for an amount equal or higher than 2 million Euros.
    4. To carry on a business project in Spain that was considered as being of public interest. To this purpose, one of these conditions should be met: creation of jobs, execution of an investment that has a positive impact in the region where it is located, or a relevant contribution to scientific or technological innovation.

    The visa granted through the execution of these investments is valid during at least one year, and in order to obtain the residence permit some other requirements should be met:

    • to not stay previously in Spain in an illegal situation,
    • to have more than 18 years,
    • to not have criminal records,
    • to have a health insurance (hired from a company operating in Spain)
    • to have financial means for the stay in Spain (i.e. a bank deposit, or income from leases or dividends. Payroll does not qualify for this purpose).

    If the above requirements are met, a two years residence and work permit could be granted. After this term, the residence permit can be extended for successive five years periods. The investments should be kept during all these periods. This permit does not request the foreigner to live in Spain for more than six months; therefore it will not be cancelled if the foreigner lives in another country.

    The residence and work permit is granted to the individual who executes the investment. If he/she is married and/or has children or ancestors who depend on the investor, it is possible to apply for their visa at the same time or later on. It is possible to execute the investment through a company owned by the investor, provided it is not a company domiciled in a tax heaven country.

    The Spanish visa allows free movements within the EU countries (Schengen space). The valid travelling document is the passport.

    Foreigners who wish to carry on a self-employment project in Spain could obtain the work and residence permit, but through a different procedure than the above mentioned, and these cases the minimum investment amount is lower.

    Investment in real estate

    The investment in real estate could be in residential, commercial or industrial properties. The property could be leased to third parties before or after the acquisition, or used by the investor. For ambitious investors, there are several possibilities to structure the investment in buildings and apartments and to a higher return of the investment.

    There are some costs related to the acquisition of real estate: the acquisition itself is taxed by Transfer Tax at rates ranging from 6 to 10% on the acquisition price, depending on each Spanish region where the property is located, to be paid by the buyer. Besides, the buyer should pay the Notary Public and Property Registrar’s fees, which approximately amount 3% of the acquisition price (the addition of both of them). These amounts are paid once, when the property is acquired.

    The annual costs related to the ownership of real estate in Spain are the following ones:

    • IBI or local property tax, whose amount is calculated based on the value and location of the property.
    • “Community expenses”, that is those expenses related to the maintenance of the common areas of the building where the property is located: cleaning, lighting, etc.
    • In some cases, also a small tax for garbage should be paid to the Town Council.
    • Owners should file the Spanish Personal Income Tax Return, and pay a percentage between 1,1% and 2% of the property’s “cadastral value” (official value), in case the property is not leased to a third party. If the property is leased, the owner should also file the Personal Income Tax Return based on the amounts obtained from the lease.

    Besides, owners should also pay the expenses related to their property: ordinary maintenance expenses, insurance, electricity and water, etc.

    In Spain, the property right is considered as a full right, which implies that the owner can use the property by himself, can lease it to third parties, can mortgage or encumber it, can sell or gift it to any third party and can pass it to his heirs through a will.

    The only limits to the use of the property by its owner or the persons appointed by him are those established by the civic rules regarding noises, pets, exterior image of the property, etc.

    Regarding the lease of the property, in principle it is free, and the rights and obligations of landlord and tenant are those provided by the private lease agreement entered between both parties and the Spanish Urban Leases Law (Ley de Arrendamientos Urbanos). However, nowadays many Spanish cities (and specially Barcelona) have approved strong limits to the so called touristic leases, which are the short term (days or weeks) leases, and request a special license.

    It is important to point out that foreigners who become residents in Spain can grant their will according to Spanish inheritance laws (according to EU Regulation 650/2012), which slightly vary depending on each Spanish region. In Catalonia, for example, the testator can freely appoint who will be his heirs.

    Financial investment

    Financial investments can be executed through different types of targets, being always the minimum amount 1 million Euros:

    • Shares of companies listed in the Spanish Stock Market.
    • Shares of non-listed companies, which could be already operating companies or newly incorporated ones. In both cases, there are no limits as regards the percentage of shares that can be owned by foreigners, and the activity sectors restricted to non EU foreign investment are very few (gambling, defense, aviation, TV and radio). Foreigners can be appointed Directors of Spanish companies with the only requirement of having previously obtained the so called “N.I.E.”, which is the Spanish identification number for foreigners.

    In case of a newly incorporated company, the € 1 million requested as investment would constitute the company’s share capital, and can be used for the startup of the company’s activities: for example, acquisition of goods, payment of salaries and rentals, payment of purveyors and subcontractors, etc.

    Spanish companies have access to all European markets and have a privileged position for trading with Latin American countries.

    • Investment funds: Spanish financial entities offer a very wide range of investment funds, from very conservative to high risk.

    Deposit in a bank

    The main advantage of a real estate investment compared to a financial investment is that the requested amount is only € 500.000 for real estate, while for a financial investment is twice this amount. During the past years since the Law on Entrepreneurship became in force, investment in real estate has been the most popular way for obtaining the residence permit in Spain, probably because at that time (2013-2016) real estate market prices were quite low due to the crash in 2008.

    However, the process to acquire a property in Spain is not so easy compared to the acquisition of a share in an investment fund or making a bank deposit: the investor has to choose the property, which normally requires one or two visits to Spain, the price and sale conditions have to negotiated and drafted, the purchase deed has to be signed before a Notary Public (by the investor or his proxy), there are taxes and expenses related to the acquisition, and once the property is acquired, it is necessary to pay ongoing expenses and taxes, and maintain the property in good condition.

    Compared to this, the investment in funds or making a bank deposit only requires one visit to the bank by the investor, in order to sign the correspondent documents.  There are not related taxes or expenses, and the liquidity of the investment is  full  (that is,  the investment can be sold at any moment,  quite probably at the same or  at a higher price, but this is not guaranteed for real estate investments).

    How to open and operate a bank account in Spain

    In Spain, banks apply the regulations regarding anti-money laundering, which include the KYC (Know Your Client) rules and the obligation to prove the legal origin of the funds. The KYC rules imply the need for the investor to appear personally before the bank at least once, previously to operating the bank account. The legal origin of the funds can be proved through different means:

    • In case of employees, through the payroll splits, or a certificate issued by the employer, or the investor’s personal income tax return.
    • In case of self-employed individuals, through their personal income tax return, or another type of documents proving their professional activity.
    • In case of company owners, through the company’s financial statements.
    • If the investor has obtained the funds necessary for the investment through personal loans, the loan agreements should be provided, plus the documents proving the legal origin of the funds provided by the lenders.
    • Other documents, for example, regarding dividends or income from the lease of properties owned by the investor could be provided.

    All documents should be legalized by a Notary Public or the Spanish Consulate, and sworn translated into Spanish.

    Please note that this article is aimed to provide a general overview on Spanish rules regarding the above matters, but it does not constitute any kind of comprehensive information on them, and in any case specific legal advice should be sought prior to taking any decision.

    Individuals coming to Portugal and here becoming residents for the first time, can be entitled to some important tax benefits under the “non habitual resident rules”. These rules are an important contribution for making Portugal one of the most attractive destinations for retired individuals, but also for entrepreneurs.

    Who can benefit?

    A non habitual resident is an individual becoming resident for tax purposes in Portugal for the first time in the last five years period. To become resident for tax purposes, one should be in Portugal for more than 183 days in any 12 months period or for a shorter period but in such conditions that the intention of becoming resident is sufficiently clear. After becoming resident for tax purposes and register as such before the Tax Authorities, the individual must register as a non habitual resident to be able to benefit from this regime.

    High Value Added Activities.

    Some of the benefits under the non habitual resident rules are only applicable to income arising from high value added activities. These activities include architects, engineers, artists, auditors and tax consultants, medical professions, university teachers, top managers and other liberal professionals in areas such as informatics (software and hardware) development and consultancy, science investigation and design.

    For how long?

    The benefits arising from the non habitual resident status are valid for a ten year period and depend on the individual remaining as resident in Portugal for tax purposes. If, for any reason, the individual ceases to be resident, he can later benefit from the remaining period by becoming resident again.

    What are the benefits?

    Individuals becoming non habitual resident benefit from a more favorable tax treatment regarding both income from Portuguese source and income from foreign sources.

    As to the income from Portuguese source arising from employment and self-employment, it is subject to a special tax of 20%. This benefit is only applicable to non habitual residents earning income from high value added activities.

    As to the income from foreign sources arising from employment and pensions, it is exempted from taxes in Portugal, in most cases. This exemption also includes income arising from self-employment in high value added activities, and from intellectual and industrial property, capital and real estate gains.

    Mercedes Clavell

    Practice areas

    • Franchising
    • Immigration
    • International trade
    • M&A
    • Real estate