Property investment in Madrid

PUBLISHED ON

Marzo 22, 2024

CATEGORY

Real Estate

Property investment in Madrid has become a widespread practice among many Colombian entrepreneurs. The Latin American country's expectations for the coming year point to a probable economic recession. Thus, in the same way, the continuous rise in inflation and the depreciation of the Colombian peso, encourage the search for investment projects abroad.

The United States has always been one of the first options for this type of investment. However, there are also other alternatives that offer attractive and secure returns, both for individuals and companies from Colombia.

Spain has become one of the most sought after destinations for those who wish to invest in real estate. This is due to its geographical position connecting Latin America with the rest of the European continent. In addition, our country is synonymous with guarantee in terms of legal, juridical and migratory security. Many Colombian citizens choose the city of Madrid as a great opportunity to oxygenate their bonds by increasing their monthly income in euros.

Golden Visa

Property investment in Madrid allows Colombian citizens to benefit from the Golden Visa.

The Spanish Government passed a law in 2013 that allows citizens whose investment in real estate exceeds 5000.000 euros to obtain residency. The processing time for this residency is almost immediate. In approximately one month, the residency will be granted to direct relatives and dependents of the investor.

According to statistics, it is Colombian citizens who occupy first place in terms of the number of Golden Visa applications in Spain. More than 600 families in recent years have received this document which, apart from granting residency in national territory, provides various advantages. These guarantees include the possibility of leaving Europe for long periods of time and acquiring Spanish nationality through residence. Implicitly, both the investor and his or her family members will have managed to obtain a work permit

Favourable tax regimes

Moreover, the Spanish market establishes a legal framework that promotes the establishment and development of operations by foreign investors. A Spanish company may be wholly controlled by foreign capital and directors.

Spain has adopted very favourable investment tax regimes, both for investment through structures and for individuals.

The Spanish corporate tax rate is 25% (compared to 35% in Colombia), with the reduced rate (15%) being applicable during the first two years of profits.

In the international sphere, companies holding foreign securities are important. These are holding companies that manage shares in non-resident entities in the country, which can benefit from a special tax regime with a tax rate of 1.25%.

In addition, Spain has several attractive tax regimes for real estate investors, such as the special regime for residential leasing or the special regime for real estate investment companies, which enjoy a corporate tax rate of 15 % and 1 %.

With the agreement to avoid double taxation and prevent income tax evasion between Spain and Colombia, trade and investment between the two countries was encouraged, reducing the tax burden for investors.