Wealthy Americans Are Seeking Residencies Abroad: Spain and Portugal Among Top Destinations in 2024
With growing political and social tensions in the United States, record numbers of wealthy Americans are actively seeking alternatives abroad. Experts in immigration and wealth management are witnessing a surge in demand for second passports and residency programs, with Spain and Portugal emerging as top destinations due to their appealing lifestyle, strategic location in Europe, and favorable investment visas.
Rising Interest in Spain and Portugal: A Trend Among the Wealthy
For high-net-worth individuals, the decision to explore residency options in Europe has been rising since the COVID-19 pandemic. However, recent developments in U.S. politics have accelerated this trend. Leading firms assisting the wealthy with international migration are reporting that Americans are now their largest client base. According to Dominic Volek, Head of Private Clients at Henley & Partners, American applicants now represent over 20% of their business.
This shift is motivated by several factors:
- Political and Social Uncertainty: Many wealthy Americans are concerned about increasing political divisions and potential unrest in the U.S.
- Economic Considerations: Proposed tax changes targeting the ultra-wealthy are prompting individuals to consider “insurance policies” through residency abroad.
- Desire for Stability and Safety: Rising incidents of social unrest, political violence, and security issues are leading wealthy families to prioritize safe havens.
Top Destinations for Residency and Second Citizenship
Among those exploring relocation options, Europe is a prime choice. Spain and Portugal top the list for Americans seeking European residency, offering both vibrant cultures and numerous benefits:
Spain and Portugal stand out due to their established Golden Visa programs, which allow high-net-worth individuals to gain residency by investing in real estate or other eligible assets. The programs provide pathways to European Union residency, enabling visa-free travel across Schengen countries. Additionally, both countries offer high-quality healthcare, excellent educational options, and a laid-back lifestyle appealing to Americans looking to balance work and leisure.
Shifting Motivations: Why Wealthy Americans Are Moving to Spain and Portugal
The motivations for relocating go beyond financial incentives. Key drivers include:
- Cultural Appeal: Spain and Portugal offer a unique blend of modern amenities with a rich historical and cultural backdrop. Americans enjoy a warm Mediterranean climate, diverse cuisines, and scenic landscapes.
- Political Neutrality and Safety: Both countries are known for political neutrality, making them attractive safe havens for families. Spain’s stable infrastructure and Portugal’s peaceful cities contribute to a sense of security that many Americans seek.
- Golden Visa Incentives: Spain’s and Portugal’s Golden Visa programs are among the most established in Europe. For example, Spain requires a minimum investment of €500,000, while Portugal has options starting at €280,000 for properties in rural areas. Both programs allow the applicant and their family members to live, study, and work in the EU.
- Tax Advantages: While some European countries are re-evaluating their tax incentives, Portugal’s Non-Habitual Resident (NHR) tax regime offers a 10-year tax break on certain foreign income. This makes Portugal particularly attractive to retirees and remote workers. Spain also offers competitive tax incentives for newcomers through its Beckham Law, reducing income tax rates for foreign residents in specific scenarios.
Portugal and Spain: Changes in Golden Visa Rules
With increased demand, both countries have reviewed and adjusted their Golden Visa programs to address concerns about local real estate prices and immigration numbers.
Recent Updates to Spain’s and Portugal’s Golden Visa Programs
- Portugal: In response to rising property prices, Portugal has shifted its Golden Visa program to prioritize investments in lower-density areas, excluding high-demand coastal cities like Lisbon and Porto. The minimum investment thresholds have also increased for certain categories to balance foreign demand with local market needs.
- Spain: Spain continues to attract interest from high-net-worth individuals through its Golden Visa program, especially in cities like Barcelona and Madrid. While there have been fewer recent changes than in Portugal, officials continue to monitor the program’s impact on real estate affordability.
Although Spains real estate investment option may soon be off the table, there are still other ways to obtain the Spain Golden Visa:
- Real Estate Investment: The traditional and most popular option requires a minimum investment of €500,000 in Spanish real estate. This can be one or multiple properties, as long as the total investment meets the threshold.
- Bank Deposit: A less common but still viable option is making a €1 million deposit in a Spanish bank.
- Company Shares: Investors can also purchase €1 million worth of shares in a Spanish company, whether publicly or privately traded.
- Government Bonds: Finally, an option involves investing €2 million in Spanish government bonds. Although rarely used, it remains available.
A Growing Market for “Passport Portfolios”
As the world becomes increasingly interconnected, the ultra-wealthy are also diversifying their national affiliations. Much like their investment portfolios, a “passport portfolio” allows them to reduce risks associated with relying on a single country for residency and citizenship.
The Role of Citizenship by Investment
While many wealthy Americans are pursuing Golden Visas, a growing number are investing in citizenship-by-investment programs in countries such as Malta, Antigua, and St. Lucia. These programs, albeit more costly, offer the advantage of full citizenship and the ability to travel visa-free to more than 150 countries.
| Country | Program | Investment Requirement | Benefits |
|---|---|---|---|
| Malta | Citizenship by Investment | $1 million+ | Full EU citizenship and mobility across Europe |
| Antigua & Barbuda | Citizenship by Investment | $300,000 (Real Estate) | Access to 150+ countries, including Europe and the U.K. |
| St. Lucia | Citizenship by Investment | $300,000 (Real Estate) | Visa-free access to Europe, U.K., Hong Kong |
These programs allow Americans to gain a second passport without needing to reside permanently in the country, making it a flexible option for those desiring global mobility.
Factors to Consider When Pursuing a Second Residency in Spain or Portugal
Although the benefits are substantial, obtaining second citizenship or residency isn’t instant. The process typically involves multiple steps, including background checks and documentation, which can extend the approval timeline.
| Consideration | Details |
|---|---|
| Residency Requirements | Golden Visa holders in Spain or Portugal must spend at least 7 days per year in the country to maintain residency status. |
| Application Timeline | Due to rising demand, processing times have increased. Approvals can now take up to 12 months or more. |
| Family Benefits | Most Golden Visa programs allow dependents to be included, ensuring family members also gain residency rights. |
| Tax Implications | Potential applicants should consult tax advisors to understand local tax obligations and benefits. |
Conclusion
For high-net-worth Americans, relocating to Spain and Portugal provides not only financial benefits but also a secure and enjoyable lifestyle in a politically stable environment. Whether driven by tax planning, lifestyle choices, or global mobility, the trend of Americans seeking second residencies abroad shows no signs of slowing down, with Spain and Portugal at the forefront of this movement.
