Non-lucrative visa in Spain

South Africans in Spain

Although there are quite a few years since Golden Visa has been introduced as an easy way to enter many European countries, and it is being widely advertised, only a couple of thousand of people went this route when trying to immigrate to Spain. To be exact, the number stands at more or less 3.000 individuals. And over 70% of them, according to the statistics are Chinese or Russian businessmen. But, there are so many more foreigners living in Spain. And more and more of them are coming to live here every day. From all parts of the world, US, Australia, Canada, Latin America, from the countries of Eastern Europe, to name just a few. How do they manage to do this, without wanting to invest 500.000+ Euros? The answer is – Non-lucrative visa. And many South Africans in Spain have gone this way.

There is a European regulation that allows you to come to a country and live freely in it, as long as you don’t cost its taxpayers any money. As long as you are self-sufficient. Different countries in Europe have different ways to calculate how much is “enough” for them to let you in, and Spain is one of the countries with the lowest threshold, because, the salaries and the cost of living here are also one of the lowest on the continent.

To be self-sufficient in the government eyes means to have enough money to support yourself. This money you have to show either on your South African, but preferably on Spanish account too. You need to have a private health insurance organized (with no co-payment needed) and you need a place to stay (either a rented apartment for the duration of your visa or purchased with your name on the title deeds). Once you fulfill all these criteria and supply a bunch of other documents, they will grant you, and your immediate family (wife and kids under 18 years of age), non-lucrative visa, or short-term residence permit.

How much is “enough”?

The amount needed is actually 2.152 euros for a couple and 538 euros for any additional child per month. Let us do a quick calculation. For a family with one child, you will need 2.152+538 a month, which is 2.690 euros. For a one year visa, to be self-sufficient in legal terms, you will have to show 12 times that amount in your account –  which is 32.280. Of course, it would be funny to do this down to a cent, so by showing that you have 35.000 euros in your account, you will get a one-year non-lucrative visa.

To get a permanent residence, you need to spend 5 years in Spain on a non-lucrative visa. Once you get a permanent residence, that is it, nothing else is needed. You have equal rights with all the Spanish, you can get employed, get enlisted in the national health system, and even get a pension one day. But to get there, you need to do 2 more renewals of your first non-lucrative visa.

After the first year, you will have to renew your one year non-lucrative visa. The first renovation is valid for 2 years. So, you will get another ID type card that will be valid for 2 years. But, because you have to be sufficient for 2 more years, the government will ask to see double of the amount of money in your account, the same 2.690 multiplied by 24 months (of course, if there are no children it will be 2.152 x 24, even for single applicants, not the couples). So, for that period you will have to show 70.000 Euros on your account.

The second renovation comes after another 2 years. Again, you will have to show that you have that amount of money available.

After five years, actually, 2 months before your second renovation expires, you can apply for Permanent Residence. With that money still showing as available, you will be granted permanent residence and get a 5-year card. Your permanent residence is valid indefinitely, for the rest of your life, the expiration is only on the card, because, like all the Spaniards, you have to renew your personal documents from time to time. But, after permanent residence is granted, there are no more requirements, renovation is automatic, with no documents needed.

It is basically free

Now, although we are throwing high figures here, the non-lucrative visa is basically free. You will have to pay certain lawyers’ costs and other costs associated with many different things, like opening a bank account, finding a property, getting a medical aid plan, but all in all, this should not be more than 3.000 euros. The high figures on your account are just for show. You have to have it, but you don’t need to use it. As a matter of fact, it would be best if you don’t use it at all, because, they might ask at renovation for a yearly average balance of your account, just to prevent cases where people borrow money, put it on their account, and then, as soon as they get the permit, give it back to wherever they got it from. But, during those five years, you will have to support yourself. And that is where the money is needed. You might have a chance to start a business, might not, but, at the end of the day, you need to pay for your daily life. So while this visa is truly cheap, all the money you will really need is going to be spent on yourselves.

During these five years, you will not be able to work in Spain. Obviously, you have a non-lucrative visa, and you have proven that you can sustain yourself. But, nothing prevents you to buy a business or start a business. You can have a business, but you cannot work on it. You can work in the background, do many things, but, you will not be able to engage directly with customers in your shop if you decide to open one. Business forming or buying is another matter, and that we can cover at a later stage. You can also invest in property and rent it out. Anything in property, short of starting a company, is not treated as an economic activity. Valencia is full of people who purchased a couple of small flats, they are renting them out on a daily basis, as Airbnb rentals, and basically, they live off that. After five years, you are a resident of Spain. You have all the rights of an average Spaniard – you can enlist into the national health system, you can get employed, get a pension one day, and enjoy a full cover of a First World Country.

You have to stay here

The biggest limitation in the eyes of many is the fact that during this 5 years, you are not allowed to leave Europe (Schengen area) for more than 6 months in one go or 10 months in total. For example, you can leave in the first year for 5 months and 29 days, and then in the following 4, for 1 month each year. It will still be ten months minus a day. Or, you can leave every year for 2 months. But, all in all, you must not be absent for more than 10 months in total.

One of the reasons Spain is allowing people to come in this way is basically its orientation to tourism. The second one is that they like having more and more taxpayers. As you get your first non-lucrative visa, and once you spend in the calendar year, from 1st of January to 31. December, more than 183 days in Spain, you become tax resident. Next year, in April, you will have to declare your worldwide assets (so they know what you have) and in June, to declare taxes. Obviously, this might not affect you, since you can declare whatever you want, there are no taxes paid for it, and since you are on a non-lucrative visa and you are not earning anything, your tax will also be zero.

So, this is in essence, how this visa works. It is not for people that don’t want to move, but just to have some kind of security. It is for people that want to leave South Africa and start their new life in Spain. It is very good for families with small kids – they can put them into Spanish schools free of charge, even if they are still on non-lucrative visas, and one day, they will be able to study anywhere in Europe for fees that are paid by Europeans. It is brilliant for people that are about to retire – they can enjoy a climate very similar to South African with one of the best health systems in the world. People that want to start businesses will find here a very competitive but highly rewarding environment. And so on, and so on.

This is why I think that this is probably the best option you can find at the moment in any country in the world. It is well balanced in between money requirements and opportunities it provides. The reward is huge, Spain is a first world country with one of the lowest crime rates in the world, and one of the highest GDP’s. Add in this Spanish way of life, the fantastic climate on the coast, the property that is very cheap for any First world country, Health system, education opportunities, link to an immense market, life expectancy – it really doesn’t get any better than this.

It does sound very simple because it is simple, but, everybody has a different situation and the solutions might be different. That is why in case you don’t think this applies to your situation or you have some more questions, please feel free to post in the group or to contact me.