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Old Share Title of Spanish Co.

In the First Article or Instalment published in this Blog on the new rules whereby non-EU citizens can obtain residence authorisations and visas in Spain (Act 4/13 of the 27th September), we briefly summarised the instances and requirements to obtain such a visa or authorisation and also studied in more detail the “significant investment” (i.e. the general condition to obtain them) which involves the purchase of real property while other kinds of “significant investment” were left for future instalments owing to lack of space. In this Second Instalment, therefore, we will be looking at other forms of “significant investment” which facilitate the granting of a residence visa or authorisation in Spain, such as investments in the purchase of corporate securities and, later, other cases such as the establishment of deposits with financial entities or investments in public debt, innovative business activities, etc.


The “general and special” requirements applicable to this kind of significant investment in companies, financial entity deposits or public debt, and even the basic process to obtain residence visas or authorisations, essentially involve the same requirements listed or commented on in this Blog for real property investments, so we would refer the reader to the First Instalment (published on 11th October 2013).


Madrid Stock Market

Obvious as it may seem, the legal rule expressly provides that the investment is to be made in “Spanish companies” and in no other way than through the “purchase of shares or stock in the company”, i.e. securities representing the company’s capital. Such a general requirement can lead us to an initial conclusion, which is that the investment can relate to civil or mercantile companies, limited liability companies (S.L. or S.A.) or otherwise (Colectivas or Comanditarias, etc), whether or not they are quoted on the stock exchange market, in any sector of the productive activity and regardless in any case of whether such an investment enables the investor to gain control over the company in which the investment has been made.

On the other hand, while the “minimum” investment in the case of real property was set at five hundred thousand euros, the minimum investment for an investment in a company to be regarded as “significant” is increased to one million euros.

Evidence of the investment is to be provided in the form of a declaration of investment in the legally-envisaged manner at the Exterior Investments Registry of the Ministry of Economy and Competitiveness (see form D-1A on where the investment relates to the purchase of capital securities in “unquoted” companies; or, in the case of a purchase of shares in quoted companies, in the form of a certificate issued by the financial intermediary, duly registered with the Administrative Regulatory Authority for Securities Markets (CNMV) or with the Bank of Spain, reflecting that the interested party has made an investment for the purposes of this rule.

The latter formal requirement is of utmost importance as not any investment in a company made for any reason will be accepted, but it must be made for the specific purpose – which must be expressly manifested – of applying for a residence visa or authorisation under the legal rule we are now looking at.

As was the case with the “significant investments” analysed in the first instalment, the purchase of capital securities provides access to a one-year residence visa and, in the same way and under the same general requirements mentioned in the said First Instalment, the capital investor in a Spanish company may be eligible to obtain a residence authorisation (for another two years which can be extended for a further two-year period), although a new formal requirement is now introduced depending on the kind of company in which the investment is to be made, namely:

(i) Submitting a notarised certificate dated not more than thirty days before the application date which proves that the investor has retained ownership of the capital securities in unquoted companies during the period known as the “previous reference period”; and (ii) In the case of investments in quoted companies, the entity’s certificate must provide evidence of the fact that the average value of one million euros in shares is maintained during the same reference period.

The interpretation of the so-called reference period may cast some doubt, but we believe in this case that, if holding a valid preliminary residence visa – or the passage of not more than 90 calendar days from its expiry – is a requirement to apply for the residence authorisation, it would seem that the period during which the investment must be maintained is of at least the one-year period for which the preliminary residence visa was granted, or one year and three months, which is the deadline to apply for a residence authorisation.

As previously mentioned, after the initial one-year residence period to which the preliminary visa entitles, a two-year residence authorisation needs to be applied for by providing evidence that the investment has been maintained during the preceding period, but in the event that the investor wants to apply for a further two-year extension of the residence authorisation, the law does not specify whether the investment needs to have been maintained during the preceding two years, although it seems logical that the requirements which needed to be met for the first authorisation period should continue to be met for the authorisation to be renewed for another two years as aforesaid (following an application and a favourable administrative resolution), including the requirement to maintain the significant investment during the said period; an investment in Spanish companies, which does not mean that the investment has to relate to the same company although it does have to amount to one million euros at least.

Having described in this Second Instalment the legal rules applicable to significant investments in “Spanish companies”, we will in a Third Instalment study significant investments in bank deposits with Spanish entities and in Spanish public debt.

Finally, the Fourth Instalment will focus on the rules which facilitate the entrance and establishment in Spain by entrepreneurs and business activities, highly-qualified professionals, investigators or intra-company movements (within the same company or group of companies).

RLEB – Marbella, November 2013

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