If you are thinking of expanding your portfolio, it may be time to think outside of your own jurisdiction. By looking into global markets, you can take advantage of economic advantages offered by other countries, and often times, gain residency in another nation. This can be quite beneficial when it comes to your retirement or gaining visa-free travel.
One of the biggest draws to buying international real estate is the diversification. According to Modern Portfolio Theory, diversification is one of the cornerstones of a successful portfolio. In fact, diverse portfolios outperform a concentrated one. By owning a large number of investments in more than one sector or asset class, investors can protect themselves from unsystematic risk, the risk that one encounters when investing in one particular asset.
Another factor that attracts investors to foreign real estate is the opportunity to expand international options. Many real estate investments can lead to residency and, in some cases, a quicker road to citizenship. In rare cases, immediate citizenship is offered after a high enough investment in real estate. This is especially attractive for those looking to expatriate or those who want to earn a second passport in order to extend the amount of visa-free travel that is possible. This can play a key role in offshore retirement or years of stress-free travel.
With a warm climate and an increased effort by the government, encouraging foreign tourism and residency, buying property in Spain has become quite popular. In fact, Spain receives more foreign income from tourism than any other European country. There are about 2.8 million legal foreign residents in the country and the tourism numbers continue to increase. More than one million foreigners are expected to reside on the Spanish coast in the next 6 years, as predicted by the Spanish Ministry of Tourism.
After the world economic crisis, the property market of Spain continued to fall until 2013 when the decline slowed. Today, Spanish real estate is viewed as a strong investment, especially because of its popularity among foreign investors. This interest has many predicting steady price growth over the years. In 2015, property transactions grew 11%.
Spanish economic growth is forecasted to continue growing according to the European Commission.
It’s easy for foreigners to buy property in Spain. There are no special requirements or paperwork that need to be met or completed. Non-citizens buying property is actually encouraged by the government.
Popular areas for property investment include Catalonia, Andalusia, Basque Country, Tenerife, and Almeria.
Residency by investment in Spain
One of the major benefits of investing in offshore property is the option to gain residency through a real estate investment. Each country that offers a program of this kind has different requirements and regulations.
Spain is a wonderful place to live, with a rich history, relaxed lifestyle, and amazing food, you may find yourself seeing Spain as your new home. Luckily, you can do so with a simple investment.
Like nations references above, Spain offers a residency by investment program. Spain calls their program the Investor’s Residency Law, commonly referred to as the Golden Visa law. Enacted in 2013, the law allows non-EU to gain Spanish residency through an investment of 500,000 euro into real estate.
The investment can be made by either a physical or legal person. If a legal person, the investor cannot be located in a low-tax jurisdiction as decided by the Bank of Spain.
There are other options for investors seeking residency in Spain, such as investing 2,000,000 euro into government bonds, 1,000,000 euro into publicly trading companies in Spain, as well as a few other avenues that include depositing money into a Spanish bank or creating a business that leads to job creation. This will gain you an investor’s residency visa, allowing the investor to reside in the country for up to one year.
To gain the investor’s residency permit, which allows the investor to live within Spain for two years, the investor must have a valid investor’s residency visa that is more than 90 days from expiration. The investor must also prove they have spent time in Spain during the validity of their visa, as well as legal proof of the investment. They must also meet all Social Security and tax obligations.
The permit can be renewed as long as the investor proves all of the requirements are still met.
Permanent residency can be obtained after five years of living with a residency permit. Citizenship can be applied for after ten years.
Your wealth is important. If you are serious about your life goals, financial planning and investments are probably important to you. Financial planning can involve many steps from tax optimization to asset protection. Different investments have different rules with different returns.
With the help of financial planning, you will be able to predict where you will be in the years to come by evaluating where you are currently, what sources of income you plan to have in the future, investments you plan to make, and your retirement plans.
Alpen Partners Wealth Management International AG, the sister company of Alpen Partners AG, is now a registered investment advisor with the U.S. Securities and Exchange Commission (SEC). Together with our partner Swiss private banks, our company can now offer the full Swiss private banking experience to American clients, both resident and non-resident.
If expatriation is your goal, Alpen Partners can assist you in that as well. Taking the leap and leaving your home country can be a big decision with tons of personal and legal steps. The hassle of navigating the legal process of expatriation can be reduced with the guidance of Alpen Partners. Each step requires assistance, including getting the passport, making sure everything is completed correctly regarding taxes, acquiring work permits, making investments, and more. No matter what expatriation route is chosen, it can be a powerful tactic to allow clients to gain better control of their financial and personal lives.
No matter the problem, Alpen Partners will handcraft a solution for you. We know that there is no one-size-fits-all when it comes to financial success. Our approach involves working with our clients to make a unique plan to meet their needs. Rest assured that we will work hard to guide you through the process of meeting your financial and personal goals.
Contact us to enhance your financial plan today.