In a recent interview that took place during IMI Connect Istanbul, Ahmad Abbas spoke with Krista Victorio, Managing Partner of Orience, about the Spanish Golden Visa, covering topics such as:
- Why Spain’s golden visa gets less coverage than those of Portugal and Greece despite its high application volume.
- How the planned price increase for the Greek golden visa could boost the popularity of Spain’s program.
- How Spain’s golden visa offers a path to citizenship in just two years for certain nationalities.
- Spain’s special tax regimes and investment environment.
- The difference between investing in residential and commercial real estate in terms of taxes and ROI.
Ahmad: What first drew you to the Spanish Golden Visa?
Krista: My introduction to Orience and the Spanish Golden Visa was actually as a client. I got into the details of the process so much and just fell in love with the entire procedure as well as the potential of it all. I then started referring clients to Orience and eventually officially joined the team.
As for Orience, Oriol Molas [Founder & Managing Partner of Orience] founded the company as a response to the government introducing the Golden Visa. The Spanish real estate market had taken a hit during the 2009 financial crisis, and the Golden Visa was one of the government’s initiatives to get it back on track.
Oriol quickly realized the potential of the Golden Visa, and Orience came to life, and Oriol’s predictions were correct, as the Spanish Golden Visa was a global hit.
Ahmad: That is true, as some people don’t know that the number of annual Golden Visa approvals in Spain puts it on the higher end of the application volume spectrum when it comes to residency by investment programs. It does raise a question, though, why do you think the Spanish Golden Visa gets less attention in the media than the Portuguese and Greek Golden Visas?
Krista: Indeed, the Spanish Golden Visa doesn't get the recognition it deserves from the media; it is an amazing program in an outstanding country.
I think the reason Greece pops up a bit more is easy to define - the price point. Since it is more affordable, a larger populace can apply for it, which is why it makes sense that it gets more coverage.
Ahmad: Do you think the new potential pricing of the greek Golden Visa (up to EUR 500,000) will increase demand for the Spanish Golden Visa?
Krista: I think so, yes. The price increase will put the Greek Golden Visa on par with its Spanish counterpart, and since both options are similar in their overall structure, I think the countries' attractiveness will be the deciding factor, and I believe Spain will have the upper hand in that regard.
Ahmad: What about Portugal?
Krista: In comparison to Portugal's Golden Visa, which we also offer to our clients, I think it is just a branding issue. I think a lot of firms brand the Portuguese Golden Visa as a semi-direct citizenship by investment program, and the allure of obtaining EU citizenship with minimal residency is significant.
Ahmad: But getting Portuguese citizenship through the Golden Visa by spending seven days a year isn't guaranteed, right?
Krista: Well, no, nothing is, but a lot of people are getting it, and I think that is what makes Portugal's option get a bit more media coverage than the Spanish Golden Visa.
But it is still unusual, as Spain as a country has a much grander brand and remains one of the most sought-out destinations worldwide; I think if more investment migration firms begin offering Spain to their clients, the quicker the coverage gap will close.
Ahmad: I think Spain also has a nationality-specific fast track to citizenship, correct? Do you think the public is aware of that?
Krista: Yes, Spain does allow certain nationalities to apply for citizenship after living two years in Spain.
All Latin Americans, Portuguese nationals, Brazilians, and Filipinos, as well as some others, only need two years of continuous residency in Spain to qualify for citizenship, effectively making it the fastest residency-to-citizenship Golden Visa out there, but just for certain nationals.
Ahmad: And what about the recent statements from the Portuguese Prime Minister about the Golden Visa having run its course? What are your thoughts on that?
Krista: Since we also facilitate the Portuguese Golden Visa for our clients, we hope the program remains. When a client comes to us, whether they are inquiring about Spain or Portugal, we analyze their case and provide them with what we think is the most suitable option depending on their preferences, budget, and goals.
I don't think the Portuguese government will suspend the Golden Visa any time soon, and I can't say for sure what will happen, but what I know is that it remains a great option for a lot of our clients, and we would prefer it if it stays operational.
Ahmad: You mentioned that not a lot of investment migration companies offer the Spanish Golden Visa; why do you think that is?
Krista: Well, the Spanish real estate market is more mature and complex than those in Greece and Portugal, so finding a good facilitator isn't easy, but that is precisely the issue we solve for our partners. We are local and come from investment advisory, banking, or real estate backgrounds, so we can help firms and investors get exceptional deals that qualify for the Golden Visa.
Also, as I said, a large portion of applicants come from Latin America, but there is not an abundance of investment migration firms over there; I think as Latin America becomes a larger source market, the number of firms offering the Spanish Golden Visa will grow exponentially.
Ahmad: What do you think puts the Spanish Golden Visa apart from other residency by investment programs?
Krista: Well, that is a simple question that requires a complex answer.
The country itself is a significant factor, Spain is bigger than the others, in both size and population, and its economy is on an entirely different level. Madrid's GDP alone is greater than that of the entirety of Portugal, so we are talking about a massive gulf between Spain and the other countries that offer residency or even citizenship by investment.
But I think it comes down to an investor's preferences. Whether they want to relocate, those looking for a new home will find that Spain offers a multitude of amazing cities to live in, such as Madrid, Barcelona, Sevilla, or otherwise.
For an investor that is looking ahead to their children's future, Spain is again a fantastic option. It has a lot of excellent universities, and its market is full of employment and business opportunities.
Spain also has a special tax regime for new residents, like Portugal, for those looking to restructure their tax framework. So I think at the end of the day, what sets Spain apart from other options is really dependent on the investor and what they are looking for in a Golden Visa.
Ahmad: Can you give us a bit of insight into the investment restraints (like eligible areas, properties, etc.), if any, as well as the investment environment in Spain and how that correlates to the Spanish Golden Visa?
Krista: First of all, Spain's Golden Visa operates on an open market paradigm, allowing investors to buy whatever immovable property they want in order to apply; that can include residential real estate, commercial property, or even land. This flexibility is one of the things that makes the Spanish Golden Visa such an exciting option.
I think the investment component of the Golden Visa is very significant, and in Spain, you have a strong market and a variety of options that permit investors to create customized investment portfolios that can help hedge against inflation, make good profits, and prudently diversify their asset base.
Ahmad: In your experience, what asset class attracts most Spanish Golden Visa investors? Do most of them prefer residential or commercial real estate?
Krista: I think the direction of investment is well-varied. We have a large client base, and I cannot say that the majority clearly leans one way or the other.
However, most of our clients invested in commercial real estate during the pandemic. It is less emotional, so you don't need to travel and see many options for a place you won't live in; you just want a place that will get you good rental returns and an arbitrage gain if you eventually resell it.
Commercial property usually has a higher ROI percentage, averaging 3-5%, than residential properties, which can yield 2-4% on average. I think investors looking for profit will eventually go for one of our real estate options, especially since businesses tend to stay as long-term renters, unlike residents who are prone to move around, making commercial properties a tremendous profit-forward investment.
We also have a very interesting commercial project that provides investors with stable ROI for a significant period. Its structure is a bit complex to talk about without visual aids, but it is getting a lot of traction, and through this option, we have pioneered an innovative product for international investors.
And sometimes, it comes down to taxes, as, for example, commercial and residential property transfer taxes wildly differ, and they also vary depending on which region or city they are located in.
Transfer tax is lower for commercial real estate, and some cities levy higher tax rates than others, so we understand what the client intends to do with the property [rent or personal use] and cross-check that with potential ROI based on market trends to provide clients with the best option that suits their budget and long-term financial objectives.
Ahmad: You've been working within the realm of the Spanish Golden Visa for a long time; one may even say you are the most significant facilitator for the program. What are the attributes that make Orience such a successful company?
Krista: First of all, our collective backgrounds give us a holistic view that encompasses every aspect of the Spanish Golden Visa, from the investment component to migration law and even tax structuring.
We are also local, so we know all there is about the market, potential growth areas, economic trends, and more. But what I think sets us apart is that we are highly methodological; we understand the entire customer journey, and we have optimized the process from start to finish.
We start with analyzing each client's case and use data-driven analytics and intimate knowledge of the Spanish real estate market to find the best investment options, and our legal team has extensive experience in handling every type of immigration case you can imagine, so I think it is our comprehensive, integrated approach that clients respond to positively, and why they keep referring more people to us.
Ahmad: Krista, it has been a pleasure talking to you, and thank you for giving me a lot of important insights into one of the most interesting and overlooked investment migration options out there. For our readers, anyone interested in knowing more about the Spanish Golden Visa, you can contact Orience through their website.