December 3, 2013 at 10:24 am #57867
I m based in China. If I buy a property (min 500,000 euro per requirement) to get a residency visa, is it more cost effective to set up a limited company in Spain (was told SL) to buy the property?
For those who have purchased property in Spain, did you buy the property under your own name or company? Any advise on this?
December 4, 2013 at 10:26 am #118738
Hi Rachel, it depends of the purpose of buying the property and your situation:
.-are you gonna live in Spain?
-.are you gonna rent it?
-.do you need a mortgage?
Bear in mind that setting up involves more cost and maintainig the Company too, althought in some cases it is a good option to avoid future inheritance taxes
December 11, 2013 at 12:33 pm #118766
Thanks for your reply, dalorgar.
I m not going to live in Spain
I m not sure whether i will rent it out
I don’t need a mortgage
Based on the above, what is your suggestion?
December 12, 2013 at 9:47 am #118827
Each option has advantages and disadvantages, but I didn’t realize that your purpose is to get the Visa, and given this and as you can see in my blog http://www.spanishlawintheuk.co.uk/visa-in-spain-in-exchange-of-purchase-property/ in order to get the Visa by setting up a company you must fulfill one of these requierements:
-. Create jobs
-.Investment with relevant socio-economic impact
-.Significant contribution to scientific innovation and / or technology.
So if the only activity of the Company is going to be owning a property or renting it, it’s not under the scope of the Law to get the Visa, so you should do it as an individual, anyway I can tell that there would be costs for setting up the company i.e. the initial company capital (3005.06€ for a limited company) and the administration fees when creating the company. Additionally the company has to file accounts every year and name a fiscal representative in Spain if the company is offshore. These costs are smaller if the company is not actively trading, but can be higher if for example the company is trading by renting the property. If the company has Spanish nationality, the administrator will have to pay social security as self-employed (monthly cost of approximately 300€). And the cost of the purchase would be the same as an individual.
The best point in doing the purchase through a Company is to avoid Inheritance tax in the future, but it involves asome costs at the present.
If you are interested in purchase the property as individual the cost of the purchase (Notary, Legal fees, tax, Registry…) is about 12% of the purchase price.
If you have any further question please let me know, and if you want to move forward in the purchase or discuss more personal details you can send me a private message or contact me in my website contact details.
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