Spain vs Portugal Golden Visa: Which is Better & Why?

Traveling throughout Europe is something that everyone should do during their lifetime, but if you are lucky you might find yourself in a country for an extended time. Spain and Portugal are both beautiful locales, and if given the opportunity, many people would love to live there long term. To do so, you are going to need to get a Golden Visa – a visa that allows you long-term residency, and perhaps citizenship, assuming you have the money to invest.

If you’re considering a Golden Visa, Spain and Portugal both offer attractive options. Although you might think that Golden Visa programs in all European Union countries would be the same, they vary significantly in their approach and benefits.

You will need to ask yourself a couple of questions before making the first move. Are you looking for a faster citizenship path, lower investment requirements, or more favorable tax conditions? Our direct comparison of the Spain vs Portugal Golden Visa explains the complexities and pinpoints the essential differences to aid in your Golden Visa decision. We aim to provide an objective breakdown of both countries’ offerings.

Key Takeaways

  • Portugal’s valued Golden Visa program offers a more affordable investment threshold and a quicker pathway to citizenship compared to Spain, with minimum investments starting at EUR 280,000. The possibility of citizenship after five years without mandatory relocation is an added perk.
  • Spain and Portugal both extend Golden Visa benefits to family members, but have differing investment options, tax regimes, and language requirements for citizenship. A notable change in Portugal’s program excludes real estate investment from October 2023 so make sure you are getting the most up-to-date information.

Golden Visa Programs Overview: Spain and Portugal

Golden Visa programs in Spain and Portugal, including the Golden Visa in Spain, are essentially passports to a life filled with opportunities in these beautiful countries. They are designed to attract foreign investment and these programs offer legal residency in return for a qualifying investment, typically in real estate. However, there are variations in the minimum investment criteria. While Spain requires an investment of EUR 500,000, Portugal provides a more cost-effective pathway to permanent residence and citizenship, with the investment threshold set at EUR 280,000. In either case, this investment can essentially act as a passport for you and your family to a lifelong dream of living in Europe.

While a minimum financial investment is a necessary condition, applicants must fulfill other requirements to be eligible for these programs. Some of these requirements include:

  • Not having had their visa or entry into the Schengen Zone denied previously
  • Not being on the list of undesirables
  • A minimum age requirement
  • A clean criminal record
  • Proof of sufficient funds

In recent years, Americans have emerged as the largest single nationality investing in these programs for a number of different reasons. It’s obviously a dream for many Americans to live a slower, less hectic life overseas, but many people also look at this Golden Visa as a legitimate financial investment.

The benefits of these programs are not limited to the main applicant alone – in other words, bring your spouse and your kids! Holders of Golden Visas in Spain and Portugal enjoy:

  • Residency, employment, and educational opportunities in these countries
  • Unrestricted travel within the EU and Schengen Area
  • The ability to extend these benefits to their family members

Investment Options: Comparing Spain and Portugal

Even though Spain and Portugal are neighbors, their requirements are very different. The investment options provided by the Golden Visa programs in Spain and Portugal offer a mix of diversity and affordability. Spain’s program emphasizes real estate and business investments, requiring a minimum investment of €500,000. On the other hand, Portugal’s program offers a more competitive investment pathway, lowering the investment threshold to €280,000, which is substantially more affordable and within the reach of more people.

Spain’s investment options span real estate, significant business projects, and government bonds. In contrast, Portugal provides a more diverse range of options, including shares of investment funds, research, business creation, and cultural heritage support. So, when considering a Golden Visa, keep in mind that real estate may not be the only way in. However, Golden Visa holders in both countries are obligated to pay taxes on their investments and income.

In an interesting turn of events, Portugal has recently eliminated real estate investment and capital transfer from its Golden Visa investment route, effective from October 2023. This change could potentially affect the tax resident status of some investors. However, Portugal continues to offer options such as donations and investment in shares of investment funds. In other words, if have been dreaming about a villa in Portugal as a way to citizenship, you’ll need to find another way.

Residency Requirements and Timeframes

Spain vs Portugal golden visa

Since neither Spain nor Portugal want people from overseas to come and buy up all their property without some cultural investment, these two countries have other requirements, including residency. The pathway to obtaining Spanish citizenship through a Golden Visa program differs between Spain and Portugal, mainly in residency requirements and timeframes. Portugal provides a faster route to citizenship, requiring a five-year residency period without mandatory relocation. In contrast, Spain mandates a ten-year residency period and imposes relocation requirements. This ten-year residency may be too much for some people.

Language proficiency requirements also present a significant difference. To acquire citizenship through Portugal’s Golden Visa program, individuals must complete a Portuguese language A2 test and maintain an average of seven days of residency in the country per year. The seven days per year requirement is very minimal and this language requirement is reasonable and certainly something that will benefit you and your family in the long run.

However, the Spain Golden Visa program offers considerable flexibility. It does not impose a minimum term of residence on the investor to maintain their visa status, which can be an appealing factor for many investors. You will not be required to show competency in Spanish, though most Golden Visa applicants already know a fair amount of Spanish.

Family Eligibility and Benefits

The Golden Visa programs in both Spain and Portugal are not limited to the main applicant, as they permit family members to be part of the application. Eligibility for family members is determined based on financial dependency, registration at the same address as the main applicant, and student status. The ability for your children to attend school in a different country is something that will benefit them for the rest of their lives, even if it’s just for a few years.

In terms of benefits, family members included in the Portugal Golden Visa Program application enjoy the privilege of residing in Portugal with a residence visa, studying, and engaging in employment activities, with the same privileges as EU citizens. So, not only will you be able to work and study in Portugal, but the ability to also work and study throughout much of Europe is an amazing benefit.

Family members participating in Spain’s Golden Visa program are also entitled to:

  • Visa-free travel within the Schengen Zone
  • Expedited residency permit issuance
  • Minimal government fees
  • Low renewal fees
  • Unrestricted selection of real estate options
  • Visa-free travel privileges.

Tax Implications and Advantages

Tax Implications and Advantages

Because of the way most Americans handle their income tax, by filing every April 15th, the European system of taxation can seem a little harsh. They don’t have the same types of deductions, nor the “wiggle room” should you wish to be creative with your taxes. Tax implications form a significant component of the Golden Visa programs in both Spain and Portugal. In Portugal, Golden Visa holders can benefit from the Non-Habitual Resident (NHR) Tax Regime. This regime offers a fixed 20% income tax rate and exemptions on specific types of income for a maximum of ten years. However, new tax residents under the Golden Visa programs in Spain are subjected to a flat 24% income tax.

Considering potential changes in tax benefits is also significant. The Prime Minister of Portugal has expressed the intention to phase out Portugal’s NHR regime from 2024 onwards. Although this change is not officially confirmed, prospective investors should consider this potential development. Keeping in mind that governments can change dramatically over a short period and those changes can potentially affect you as a foreigner.

Staying updated with the latest tax policies is significant for investors. Alterations, such as the potential removal of Portugal’s NHR regime, can greatly affect the tax benefits associated with the Golden Visa programs. In other words, obtaining a Golden Visa is not necessarily the most sound method for minimizing taxes.

Application Process and Costs

You should know from the outset that obtaining a Golden Visa isn’t going to always go easy and it may take much longer than you expect. The application process and costs for the Golden Visa programs in Spain and Portugal offer another comparison point. Spain’s application process is faster, typically taking 20 business days. Believe it or not, the processing time for Portugal’s online application can extend up to 18 months.

In terms of costs, the government application fee for the Spanish Golden Visa is higher than that of Portugal. However, the legal fees for a single applicant in Portugal are higher than those in Spain. You might find that it all evens out in the end though.

Notably, in Portugal, individuals under the age of 18 can be included in the Golden Visa application without any additional charges. For large families, this is a big deal.

Lifestyle and Quality of Life

The lifestyle and quality of life in Spain and Portugal are both exceptional, albeit with notable differences.

Portugal is known for:

  • its affordable cost of living
  • friendly  locals
  • high-quality education options
  • pleasant weather
  • safety
  • various entertainment opportunities

Consumer prices in Portugal are typically lower than in Spain. When excluding rent, overall costs are 12.74% lower.

In contrast, Spain provides a diverse lifestyle with a variety of landscapes and bustling cities like Barcelona and Madrid. If you are looking for nightlife, music, the arts, and more to do at night, then the larger cities of Spain may make the higher consumer prices worthwhile. This diversity adds to the appeal of living in Spain. The consumer prices in Spain are higher than in Portugal, and without rent, they are 8.3% higher.

Many retirees are looking at Golden Visas for the next phase of their life. Both Portugal and Spain are exceptional retirement destinations, but Portugal is frequently rated more favorably due to its combination of affordability and quality of life. When choosing between residing in Portugal or Spain, factors such as:

  • the climate
  • lifestyle
  • job opportunities
  • cost of living
  • healthcare
  • education

should be considered. For many, the big difference will be overall lifestyle, while for others, the cost of living and climate may be more important.

Real Estate Market Opportunities

The real estate market opportunities in Spain and Portugal are also very different. Portugal presents discounted property options, whereas Spain demonstrates a robust real estate market with profit potential. Your existing financial situation as well as your long-term goals will determine which is right for you.

In Spain, the prevailing trends encompass a deceleration in the housing market, a cessation in house price growth, and a decline in sales. In other words, this might be the time to buy. However, there has been an increase in Spanish property prices in the year to October, suggesting that real estate in Spain continues to be an appealing investment for some foreigners.

In contrast, real estate in Portugal offers the following advantages:

  • More affordable prices compared to Spain
  • Appealing rental income yields in Lisbon and the Algarve
  • Lower property registration costs compared to Spain
  • Discounted property options for Golden Visa applicants, such as the Portugal Golden Visa 280k properties, offer a 20% discount.

Challenges and Potential Changes in Golden Visa Programs

The requirements for Golden Visa programs seem to be always changing, and staying informed about potential changes and challenges is significant. A key development is Portugal’s decision to terminate its Golden Visa Program, which is expected to be approved by the majority of the parliament.

It should be stated that real estate and real-estate-related funds have been eliminated as qualifying investment options for the program. If Portugal’s Golden Visa program ends, investors may contemplate other comparable European programs, including those offered by:

  • Malta
  • Cyprus
  • Greece
  • France
  • Monaco

Summary

Both Spain and Portugal offer attractive Golden Visa programs, each with its strengths and considerations. Portugal’s program stands out for its lower investment threshold, diverse investment options, and faster path to citizenship. Spain’s program is known for its real estate and business investment focus, flexible residency requirements, and vibrant lifestyle.

So, which program will be right for you? The choice between the two largely depends on personal preferences and individual circumstances. So, whether the sun-kissed landscapes of Spain call out to you or the charm of Portugal beckons, one thing is certain – a Golden Visa is your passport to a world of opportunities for you and your family.

Frequently Asked Questions

Which European country has the best Golden Visa?

Most experts agree that Greece offers the most affordable real estate Golden Visa route in Europe, requiring just €250,000, although the threshold may rise in 2024.

Is it easier to get citizenship in Portugal or Spain?

It is quicker to get citizenship in Portugal compared to Spain, as you can apply for permanent residence and citizenship after five years of residency, while in Spain it takes ten years.

Is Portugal’s Golden Visa being discontinued?

No, the Portuguese Golden Visa program is not coming to an end, but significant changes have been implemented as of October 7, 2023, including new rules that discontinue the real estate investment pathway. So, in order to take advantage of this program, your investments will need to be in other forms.

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