Spanish Entrepreneur Visa: Why It May Be a Bad Idea

We receive a lot of inquiries from readers asking how they can live in Italy, Spain, France or some other country in Europe. In truth, living in Europe is the easy part. 

The real question is whether there are benefits to obtaining a second residency in a European country over somewhere like Panama or St Lucia. 

Our founder, Andrew Henderson, addresses this in his book Nomad Capitalist, and the answer is both yes…and no. 

The reality is, with a little help, you can find great European second residency and passport programs for your needs, including the Spanish Entrepreneur Visa.

Spain has swiftly become a premier destination for aspiring entrepreneurs, thanks to Spain Entrepreneur’s Law. 

This progressive legislation has paved the way for innovative minds to establish their ventures through the Spanish entrepreneur visa, also known as the Spanish startup visa. 

This unique opportunity not only facilitates the creation of groundbreaking businesses but also offers a pathway to long-term residency or, after ten years, citizenship in Spain. 

Why would you apply for an entrepreneur visa in Spain in the first place when there are other options in the European Union available that can lead to permanent EU residency or even citizenship? 

Having a residency in Spain as an entrepreneur comes with many benefits. However, whether you make these benefits work in your favour depends on where you obtain your residency, especially if you are a high-net-worth individual with a lot at stake. 

If that sounds like you, we strongly urge you to reach out. When you become a Nomad Capitalist client, you can rest assured knowing that all your bases are covered. 

First, though, what does securing an entrepreneur visa in Spain entail, and why is it so appealing? 

This quick guide explores the essentials of launching a business in Spain, from understanding the visa’s benefits to navigating the application process, providing all the guidance needed to embark on your entrepreneurial journey.

What is the Spanish Entrepreneur Visa?

Spain, like several other European countries, is still fully recovering from the economic downturn that began in 2008 and caused unthinkable levels of unemployment among the country’s young people. 

Because of that, if you can start a business that creates jobs for Spanish workers (or other EU citizens in Spain), they will welcome you with open arms. 

At least, that is part of the idea behind the Spanish entrepreneur visa, which is a specialised residence permit designed for non-EU citizens eager to establish a business in Spain. 

This visa is part of the 14/2013 Entrepreneur’s Act, aimed at fostering economic growth through innovative projects that align with Spain’s economic interests. 

If you meet the requirements, which are often stringent and subjective, you can enjoy a three-year residency, providing an excellent opportunity to launch and develop your startup.

Sounds great, right? Sure, if you are able to effectively submit a business plan for a truly ‘innovative and economically beneficial’ project. 

However, don’t expect this to lead to Spanish citizenship any time soon. Becoming a Spanish citizen requires ten years of residence before applying. 

From there, the process can easily take two to four years before you have a passport in hand. There is no ‘fast track’ option for investors, either. It takes a high-value business owner the same ten years. 

The second catch is that Spain requires that you spend a minimum of six months a year in the country to maintain your residency or they will cancel your entrepreneur visa. 

In comparison, the appeal of residency programs in places like Panama and St Lucia is that the government has set a very low (i.e., one day) requirement for you to maintain your residency. 

The final catch is that (conveniently for Spain) the six months required to maintain your residence is also the amount of time needed to qualify you for Spain’s near-US levels of tax compliance burdens. 

Spanish Entrepreneur Visa Requirements

Few Spanish entrepreneur visa applications get approved, and it’s mostly due to one reason:

To obtain the Spanish entrepreneur visa, you must present a compelling business plan that showcases the project’s alignment with Spain’s economic interests. 

The venture should demonstrate an ability to stimulate job creation, either immediately or in the foreseeable future, thus offering a valuable contribution to the country’s workforce. 

Innovation is another critical factor. The business must integrate advanced technologies, such as algorithms or machine learning, to drive socio-economic growth. 

Aside from those two factors, you’ll need to fulfil one more, which is originality. Your enterprise should stand out in the Spanish market with minimal competition. If competitors exist, you will need to explain how your business surpasses them in value and uniqueness.

How can you prove all of this? Try to strengthen your application with support documents like patents, recommendation letters or evidence of existing clients. 

What the Spanish government is ultimately looking for here is proof of the project’s viability and its readiness to contribute positively to Spain’s entrepreneurial landscape.

Other general requirements include:

• Not being an EU national
• Over 18 years old
• Clean criminal record
• Health insurance
• Sufficient funds.

Assuming you can meet the requirements, or at least want to try, the application process for Spain’s entrepreneur visa is relatively quick. You submit your application to the Unidad de Grandes Empresas (UGE) and wait 20 business days.

How to Apply for the Spain Entrepreneur Visa

The application process for the Spanish Entrepreneur Visa involves several key steps. 

Here’s a breakdown of the process:

• Prepare and Submit Business Plan: Develop a comprehensive business plan highlighting innovation and economic benefits. Submit it to ENISA for evaluation.
  
• Apply to UGE-CE: After submitting your business plan, apply for the entrepreneur visa through UGE-CE, ensuring your application meets their standards for professional experience and business management.
  
• ENISA and UGE-CE Coordination: ENISA’s approval is communicated to UGE-CE, which processes your residence authorisation. Lack of response within 20 days may imply approval via ‘positive administrative silence’ but it’s best to speak with an immigration lawyer about that.
  
• Processing Timeline: Expect ENISA’s review of your business plan to take up to three months, while UGE-CE typically processes residence authorisation within 20 days.
  
• Apply from Abroad: Once approved, collect your one-year entry visa from a Spanish consulate. After arriving in Spain, schedule a fingerprint appointment to obtain your Foreigner Identity Card (TIE). If you are already in Spain, skip to the next step.
  
• Apply from Within Spain: If already in Spain on another visa or have entered as a tourist, apply simultaneously to ENISA and UGE-CE for efficient processing. Upon approval, schedule an appointment for the three-year residency card.
  
• Start Your Business: With the visa or residency card in hand, you can officially begin your business operations in accordance with your approved business plan.

Benefits of the Spanish Startup Visa

The Spanish Startup Visa offers numerous advantages for entrepreneurs seeking to establish their businesses in Spain. The main benefits include:

• Simplified Work Authorisation: The Spanish startup visa eliminates the need for complex requirements typical of a regular work visa.
• Access to the Schengen Area: Visa holders enjoy unrestricted movement throughout the Schengen zone.
• Remote Application Process: You can initiate the application without having to be in Spain.
• Family Inclusion: This visa allows for joint applications, enabling your spouse, children under 18 and dependent parents over 65 to apply simultaneously.
• Three-Year Visa: Unlike many other visas, the Spanish startup visa is valid for three years.
• Apply from Within Spain: If you’re already in Spain on a tourist visa, you can start the application process without returning to your home country.
• Expedited Processing: The Spanish authorities prioritise these applications, typically providing a decision within 20 days.

Drawbacks of the Spanish Startup Visa

Now, why shouldn’t you apply for Spain’s startup visa? Ultimately, a consultation with a legal or immigration professional is the best way to figure out if this visa is right for you.

However, some drawbacks of this residency route include:

• Bureaucratic Challenges: Navigating Spain’s bureaucratic processes can be time-consuming and complex, especially given how stringent the requirements for this visa are.
• Detailed Business Plan: Applicants must present a comprehensive and convincing business plan that demonstrates innovation and significant economic impact, which can be difficult to prove.
• Language Barriers: Non-Spanish speakers might face challenges in communication and understanding legal documents.
• Innovation and Economic Impact: The visa requires businesses to showcase a high level of innovation and promise economic benefits, which may limit eligibility to certain cutting-edge or high-tech ventures.
• Business Type Limitations: Not all types of businesses qualify for the visa, potentially excluding more traditional or local market-oriented projects.
• Ongoing Compliance: Startup visa holders must continuously adhere to Spanish business laws and regulations.
• Initial Setup Costs: While there’s no upfront investment requirement, setting up a business in Spain still incurs initial costs related to legal fees, taxes and operational needs. From our experience, you should be prepared to invest at least €250,000 to meet the necessary requirements.

The Benefits of Planting Flags

Just because the startup visa might not be the ideal option doesn’t mean you can’t live in Spain. In fact, there are strategic ways to enjoy living in Spain without necessarily obtaining a Spanish visa.

The ‘planting flags’ strategy involves diversifying your life across different jurisdictions to optimise various aspects, such as taxation, lifestyle‌ and freedom. This might mean living in one country, obtaining residency in another and holding citizenship in yet another. 

For example, you might choose to live in Spain while obtaining residency in a country with more favourable tax policies, such as Malta. 

Alternatively, you could explore opportunities for citizenship by descent, which enables you to claim citizenship based on your ancestry, potentially opening doors to EU citizenship at almost no cost.

That’s the beauty of strategically planting flags. There is no need to commit to a country that will tax you just as intensely as your current country of residence simply because you want to live there. Not anymore, at least. 

Spanish Entrepreneur Visa – FAQs

The Path to European Citizenship

At Nomad Capitalist, we don’t believe in cutting corners.

There are some people who assume they can just go to Spain (or any other country) and live there for as long as they want. 

They figure that if they get caught, they can feed the authorities some explanation and be fine. You don’t want to do that. You want to play by the rules.

In Spain, unlike in some other countries, immigration and tax departments of the government talk. If you file immigration paperwork saying that you spent X amount of time in the country, that information will get sent right over to the tax department. 

If your records don’t match up to your account and you’ve overstayed, the tax department is going to say: ‘Guess what? You are now a tax resident. We tax on worldwide income, so we need to know about your bank accounts and all the money you’re making. Oh, and please pay us for that rental property you have back home.’

Now, it’s all subject to a tax treaty if you’re from the US or somewhere else, but you will be taxed. So, play by the rules. The bottom line is that easy doesn’t always mean you should take what’s being offered. 

Another option if you are determined to go to Spain is the digital nomad visa, which is now available for non-EU nationals wishing to work remotely from Spain. 

Unlike the Spanish entrepreneur visa, the digital nomad visa option offers certain flexibility that some other countries’ similar programs, such as Germany, don’t have. 

It is a more accessible option compared to the entrepreneur visa in Spain, too. 

Mostly, all you need to do is prove you can support yourself via remote work. The current required amount is a minimum of €2,666 per month. This is something that may increase in the next couple of months or in the following years, so keep an eye on those numbers.

Ultimately, if European citizenship is your end goal, there are multiple avenues to citizenship, including fast-track investment, long-term naturalisation, citizenship by descent or through marriage.

Possessing any European passport significantly enhances travel freedom, given that many top-ranked passports are from European nations.

Whether you choose to speed up the process through a golden visa or investment schemes or take the more gradual approach by acquiring citizenship through ancestry, the possibilities are available.

However, it is important to note that these options, particularly golden visas, are gradually decreasing. 

We encourage our clients to take action and start the process of creating their holistic offshore strategy today – the current opportunities may not be available tomorrow. 

Apply here to become a client and start creating your holistic global citizenship plan.