Aiming to End Golden Visas, Spain Also Considers Legalizing Half a Million Illegal Immigrants

Jacinto Soler Matutes

In a decisive electoral year that will include critical regional elections in Catalonia and the Basque Country as well as the June European elections, the always-sensitive issue of immigration found its way into the political debate in Spain last week. 

Prime Minister Pedro Sánchez announced his intention to phase out the property route for the Spanish golden visa through an amendment to Law 14/2013, which has ruled residence by investment (RBI) in Spain for a decade. Meanwhile, the Spanish Parliament agreed to discuss a legislative proposal to legalize the over half a million illegal migrants residing in the country. 

Over the coming months, the highly fragmented Spanish Parliament will debate both proposals, obviously with strong ideological influences. While left-wing parties may call to prevent foreign millionaires from accessing RBI and distorting the local property market, right-wing politicians will claim that immigration dilutes the Spanish identity.

Recent authoritative studies have shown the need for migrant workers in Spain and the EU as a whole. In a recent Communication (COM (2024) 131 final), the European Commission projected that the EU’s working-age population would shrink by about 30 million between now and 2050, which would require the entry of three million migrant workers per year. Spain’s share of this figure would be an estimated 230,000 immigrants a year.

Contrary to what Adam Smith predicted in his perfect equilibrium models, however, the labor market is highly complex and inefficient. Mass legalization of migrants will not lead to their immediate and automatic integration into the local labor market, as they do not necessarily meet the needs, requirements, and expectations of Spanish employers. 

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But such mass legalization of migrants in Spain would at least clarify their legal status, a necessary (but not sufficient) condition for their labor market participation. Indeed, migration in Spain has always been subject to stringent legal constraints and particularly cumbersome and lengthy procedures. 

It is difficult to understand that migrants with jobs in Spain take up to a year to renew their permits, while resident cards (so-called “TIE”) require more than a month to process when ID cards for Spanish nationals (DNI) are issued on the spot. Recent regulatory reforms have failed to make the legal and administrative framework for migrants in Spain more agile, transparent, digital, and user-friendly.

The Law 14/2013, of September 27, which regulates the so-called golden visas, was also slated for review last year, on its tenth anniversary. The content of the law, when first introduced in 2012, was strongly influenced by the 2008 property crisis and the initial RBI experience in Portugal. The times have changed and an update is required to better guide foreign investment into Spain. 

A few hundred golden visas a year can hardly affect a real estate market that sees almost a million transactions annually throughout Spain. In this context, the more recent regulation on digital nomads (Law 28/2022), property purchases by European investors (who do not require a residence permit), and investments from large funds and insurance companies undoubtedly have a much more substantial local impact in Spain. However, there is a strong consensus that the reform of Law 14/2013 should direct foreign investment towards other assets besides real estate, with a greater impact on our economy and employment.

In the United States, the EB-5 residency regime for foreign investors has spurred the creation and growth of businesses across the country, from bars and farms in Minnesota to technology startups in California. Even the very American Donald Trump did not suspend this program during his term.

It would be a mistake if the Spanish Government simply phased out the golden visa without further discussion and elaboration, just as a massive unconditional legalization of all illegal migrants in Spain would not be beneficial either. 

We look forward to a serious and rigorous discussion in the Spanish Parliament this year on updating Law 14/2013 and deep reform of the obsolete administrative rules and procedures for migrants.

Spain should continue to stand out as a welcoming land for people from all over the world who contribute to the country’s progress, whether with their money, work, or talent.

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Jacinto Soler Matutes AuthorSubscriberParticipant
Associate Professor

Jacinto Soler Matutes, Lawyer and Economist, Investment Advisor and Professor at the UAB. He participated between 2011 and 2013 in the drafting of Law 14/2013, of September 27, which regulated RBI in Spain for the first time in history. 

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