Portugal vs. Spanish Investment Visas: ROI Analysis and Tax Strategies for 2025

Why Real Estate + Visa Is the New Gold Standard for Smart Investors

Let me begin with an observation I make daily in my consulting practice:

More and more clients are no longer simply asking: “Richard, where do I pay the least tax?” Rather: “How do I combine a solid real estate investment with a European residence permit?”

Theres a good reason for that.

The days when you could consider a flag theory in isolation are over. Today you need an integrated strategy. A strategy that brings your investment, residence status, and tax optimization together under one roof.

And this is where Portugal and Spain come into play.

The Three Pillars of a Smart Investment Visa Strategy

Before we go into details, let me explain the three pillars on which a successful strategy stands:

1. Return on Investment (ROI): Your property investment must be profitable – regardless of the visa aspect
2. Legal Certainty: Your residence status must be predictable and extendable in the long term
3. Tax Optimization: The overall structure must reduce your tax burden, not increase it

Sound logical? It is. Yet, every day, I still see investors neglecting one or more of these pillars.

Portugal vs. Spain: Why These Two Countries?

The answer is simpler than you think:

First: Both countries offer established investment visa programs with EU access. That means you’re not just investing in one country but get access to 27 EU member states.

Second: The real estate markets are mature enough for professional investments, but not yet overheated like in Germany or Switzerland.

Third: Both countries offer attractive tax regimes for foreigners – if you do it right.

But here’s where it gets interesting: the devil is in the details. And these details determine the success or failure of your strategy.

Portugal Golden Visa 2025: End of an Era and the New Opportunities

Let me get straight to the most important change:

The classic Portugal Golden Visa for real estate in Lisbon and Porto has been history since October 2023. Over. Done.

But – and this is the critical but – the program is not dead. It has just changed.

What Still Works with the Portugal Golden Visa

Here are the current options for 2025:

• Property in the Azores and Madeira: Minimum investment €500,000 (€280,000 in renovation projects)
• Property in inland Portugal: Same investment amounts, significantly lower prices
• Investment Funds: €500,000 in approved funds
• Entrepreneurship: Creation of at least 10 jobs
• Art and Culture: €250,000 in cultural projects

You’re probably asking yourself now: Which option makes sense for you?

ROI Potential: Azores vs. Inland Portugal

Now it gets exciting. Most advisors only tell you half the truth.

What does this mean for your strategy?

If you focus on cash flow: Inland Portugal is your friend. Cities like Coimbra, Braga, or Aveiro offer solid rental yields at moderate entry prices.

If you speculate on appreciation: Azores or selected inland regions with development potential.

If you need liquidity: Madeira, even if yields are lower.

The Hidden Costs of the Portugal Golden Visa

Let me dispel a myth I hear every day:

“The Portugal Golden Visa only costs the investment sum.”

Wrong. Very wrong.

Count on these additional costs:

• Application fees: €5,320 for the main applicant, €2,660 per family member
• Legal fees: €15,000-25,000 for complete handling
• Due Diligence: €3,000-5,000 per person
• Annual renewal: €2,660 every two years
• Property tax (IMI): 0.3-0.8% of property value annually
• Transfer tax (IMT): Up to 8% of the purchase price

That’s quickly €50,000-80,000 in additional costs on a €500,000 investment. These figures must be included in your ROI calculation.

Residence Requirements: What You Really Have to Meet

Here’s the good news: Portugal is relaxed.

You only need to spend 7 days in the first two years, and then 14 days every two years in Portugal. That’s just about a week per year.

Perfect for you as a digital nomadic entrepreneur, right?

After five years you can apply for permanent residence. After six years, even Portuguese citizenship – provided you speak Portuguese at A2 level.

Spain Investment Visa: The Underrated Alternative with Surprising Potential

While everyone is staring at Portugal, many overlook the Spanish alternative. Yet Spain offers some very interesting options.

But – and I say this as someone who knows both systems – Spain is more complicated. Not worse, but definitely more complicated.

The Spanish Investment Visa Options at a Glance

Spain offers several ways to obtain a residence permit through investment:

1. Real estate investment: At least €500,000
2. Government bonds: €2 million
3. Company equity: €1 million
4. Bank deposits: €1 million
5. Business startup: From €40,000 with a business plan

For most of my clients, the real estate option is the most interesting. That’s why I’ll focus on it.

Spain Real Estate ROI: Where the Action Is

This is where it gets interesting. Spain is not just Spain.

The differences between the regions are more dramatic than in Portugal:

My recommendation? Valencia is currently the sweet spot.

Why? Simple:

• Moderate entry prices with high appreciation potential
• Solid rental yields due to strong demand
• Excellent infrastructure and quality of life
• No tourist tax as on the Balearic Islands

The Crucial Difference: Residence Requirements in Spain

Heres the catch with Spain:

Unlike Portugal, Spain requires real presence. You must spend at least 183 days per year in Spain to be considered a tax resident.

This is a real game-changer for digital nomadic entrepreneurs.

Because here lies a conflict: On the one hand you want flexibility, on the other Spain’s system forces you to settle.

But – and here my experience comes into play – there are legal workarounds.

Spain Non-Lucrative Visa: The Secret Weapon for Retirees and Capital Investors

Here’s an option many overlook:

The Spanish Non-Lucrative Visa is aimed at people who can support themselves in Spain without employment.

The requirements:

• Proof of €27,115 annual passive income
• Plus €6,779 per family member
• Health insurance
• Clean criminal record

The advantage: You don’t have to invest €500,000. The downside: You may not work in Spain.

For capital investors with passive income, this may be more interesting than the investment visa.

ROI Analysis Portugal vs. Spain: The Hard Numbers

Now let’s get concrete. Let’s get the numbers to speak.

I’ll calculate two realistic scenarios for you – with all costs and no sugarcoating.

Scenario 1: Portugal Inland (Investment €500,000)

Lets say you buy a refurbished property in Coimbra for €500,000:

Total return after 5 years: €139,880 profit on €590,000 total investment = 23.7% or 4.3% p.a.

Scenario 2: Valencia, Spain (Investment €500,000)

Same investment amount, city center Valencia:

Total return after 5 years: €120,200 profit on €570,000 total investment = 21.1% or 3.9% p.a.

What These Numbers Really Mean

Portugal wins at first glance. But look closer:

Portugal scores with:

• Higher total return due to better appreciation
• Lower residence requirements
• Simpler visa extension

Spain scores with:

• Lower acquisition costs
• Greater property liquidity
• Better infrastructure and quality of life

The interesting part: a pure ROI view leads you astray.

Why? Because you haven’t considered the tax aspects yet.

Hidden Champion: The Power of Combination

Here’s my insider tip from practice:

Combine both approaches. Use Portugal for the residence permit and additionally invest in Spanish property without visa requirements.

This gives you:

• EU residency without a high presence obligation
• Diversification across two markets
• Tax optimization through smart structuring

Sounds complicated? It is. But the results justify the effort.

Tax Optimization: Where You Really Save (and Where You Don’t)

Now we get to the core. Without tax optimization, the best ROI fizzles out.

But beware: Here lie most traps. And this is where I hear the most half-truths from colleagues.

Portugal NHR: A Thing of the Past

Let me clear up a common misconception:

The Portuguese NHR program (Non-Habitual Resident) for newcomers has been terminated since 2023. Over. Done.

If someone is still trying to sell NHR to you today, they’re either poorly informed or leading you astray.

What applies in Portugal today:

• Regular Portuguese income tax: 14.5% to 48%
• Wealth tax: 0.4% to 1% from €600,000
• Capital gains tax: 28%
• Inheritance tax: 0% to 40% depending on degree of relation

That’s not bad, but not sensational either.

Spain Beckham Rule: Still an Option for High Earners

Here’s where it gets interesting:

The Spanish “Beckham Law” still applies. Foreigners can choose a flat 24% tax on Spanish income for the first six years – regardless of the amount.

Foreign income remains tax-free as long as it’s not channeled into Spain.

This is interesting for entrepreneurs with high incomes from non-Spanish sources.

Requirements:

• You haven’t been tax resident in Spain in the past 10 years
• You become tax resident through taking a job in Spain
• Your work is actually carried out in Spain

The catch: As an entrepreneur, you must prove you’re working – pure capital earnings aren’t enough.

The Dubai Combination: Here’s Where It Gets Truly Interesting

Now for the strategy I recommend to many clients:

Only use Portugal or Spain for EU residency. Build your actual business base in Dubai.

Why this works:

1. Portugal: Residency requirement only 7 days/year
2. Dubai: No income tax if structured correctly
3. EU access: You can return to the EU at any time

The structure looks like this:

The beauty: you meet the residence requirements in both countries and minimize your tax burden legally.

But Caution: The German Pitfalls

If you’re a German citizen, you have to be especially careful:

Exit taxation: With holdings over 1% or shares over €500,000 the German tax office gets involved – even if you move away.

CFC Rules: The German CFC regime can thwart your Dubai structure if you don’t strictly stick to the 183-day rule.

Double Taxation Agreements: The tie-breaker rules determine your tax residency.

My advice: Plan at least 12 months ahead and document everything meticulously.

Swiss and Austrian Citizens: Your Special Rules

Briefly for my clients from Switzerland and Austria:

Switzerland: Reclaiming withholding tax can get complicated. Plan on 6-12 months processing time.

Austria: The 183-day rule is stricter than in Germany. Record your stays diligently.

In both cases, a proper deregistration is worth its weight in gold.

Practical Implementation: Your Step-by-Step Roadmap

Enough theory. Let’s get concrete.

Here’s the roadmap I go through with my clients – step by step, with no detours:

Phase 1: Strategic Decision (Months 1-2)

Step 1: Assessment

• Determine current tax burden
• Clarify family status and dependencies
• Check liquid funds and financing possibilities
• Analyze business model for international suitability

Step 2: Target country decision

Here’s the decision matrix I use:

Step 3: Finalize budget

Expect these total costs for the first year:

• Portugal: €590,000 – 650,000
• Spain: €570,000 – 620,000
• Combination: €850,000 – 1,000,000

Phase 2: Due Diligence and Preparation (Months 3-4)

Document Collection (critical!):

• Apostilled birth and marriage certificates
• Criminal record certificate (apostilled)
• Proof of liquid assets (last 6 months bank statements)
• Proof of income for the past 3 years
• Proof of health insurance
• Commercial register extracts for all holdings

Pro tip: Apply for all apostilles at the same time. This saves time and nerves.

Lawyer selection:

Don’t cut corners here by choosing the cheapest. Consider:

• Specialization in investment visas
• Support in your language
• References from other clients
• Transparent fee structure

Phase 3: Property Search and Purchase (Months 5-8)

Real estate due diligence checklist:

1. Check the energy certificate (mandatory in both countries)
2. Study land register extract closely
3. Check building permits and plans
4. Review rental contracts for rented properties
5. Service charges and running costs of last 3 years
6. Expert opinion by an independent appraiser

My experience: Don’t let yourself be pressured. The market has enough properties.

Financing (if desired):

Yes, you can get loans as a foreigner:

• Portugal: Up to 70% LTV with good credit rating
• Spain: Up to 60% LTV as a non-resident
• Interest rates: Currently 4-6% depending on term

The advantage: You leverage your return. The disadvantage: More complexity with the visa application.

Phase 4: Visa Application (Months 9-12)

Portugal Golden Visa Timeline:

1. Complete property purchase (month 9)
2. Submit application at SEF (month 10)
3. Biometric data in Portugal (month 11)
4. Pick up visa card (months 12-14)

Spain Investment Visa Timeline:

1. Complete property purchase (month 9)
2. Apply at the Spanish consulate (month 10)
3. Entry and apply for residence card (month 11)
4. NIE and TIE issued (months 12-13)

Important: Build in buffer times. Authorities have their own schedules.

Phase 5: Tax Structuring (from month 6)

Parallel to property search, you should set up your tax structure:

If you choose the Dubai combination:

1. Incorporate Dubai Freezone LLC
2. Apply for UAE Residence Visa
3. Apply for Emirates ID
4. Open bank account in the UAE
5. Prepare tax deregistration in Germany

Timing is everything:

The tax deregistration should only happen once everything else is in place. Otherwise, gaps arise that the tax office could exploit.

Risks and Pitfalls: What Advisors Don’t Tell You

Now let’s get uncomfortable. Because I’ll tell you what others keep quiet.

In ten years in this business, I’ve seen every mistake. Some cost money, some cost years, some cost both.

Pitfall #1: The Burden of Proof Shift

The biggest risk is what you don’t see:

The German tax office does not have to prove you are tax liable in Germany. You have to prove you are not.

Sound unfair? It is. But that’s how the system works.

What this means for you:

• Document every day of your stay
• Keep receipts for all expenses abroad
• Maintain a residency and activity log
• Photograph important appointments with time stamp

I know, this sounds paranoid. But a tax audit is no joke.

Pitfall #2: The Real Estate Trap

Here’s a mistake I still see far too often:

Investors buy a property that may qualify for the visa program, but is a financial disaster.

Warning signs for properties:

• Unrealistically high return promises (over 8% in Europe)
• Properties in absolute outlying areas
• Developments built exclusively for visa programs
• No comparable sales in the area
• Seller pushes for a quick decision

My rule: Would you buy the property without the visa program? If not, hands off.

Pitfall #3: The Family Trap

It gets especially tricky for families:

You get your visa, but your spouse and children are still taxed in Germany – because their center of life remains there.

The consequences:

• Loss of joint tax assessment
• No more child benefit
• Double health insurance
• Complicated tax returns in multiple countries

The solution: Either everyone goes or no one. Half measures don’t work.

Pitfall #4: The Liquidity Trap

An underestimated risk:

You tie up €500,000 in a property and suddenly face a liquidity problem.

What if:

• Your business has a cash flow crunch?
• You need cash fast for a new opportunity?
• The property is empty longer than planned?
• Major repairs are needed?

My rule: Keep at least 12 months of your running costs in reserve.

Pitfall #5: The Visa Renewal Trap

Here’s a big one:

Portugal and Spain can change the visa programs at any time. Your acquired right only protects you to a limited extent.

What’s already happened:

• Portugal excluded Lisbon and Porto from the program
• Minimum stay periods were tightened
• Due diligence requirements were increased

What else could happen:

• Increase in minimum investment amounts
• Stricter residence requirements
• Complete halt of new applications

Always have a plan B.

Pitfall #6: The Tax Advisor Trap

The most expensive mistake often comes from those who are supposed to help:

Many German tax advisors do not understand international structures. But they still give advice – usually the wrong kind.

Warning signs for advisors:

• “Weve done it like this for years”
• No concrete references
• One-size-fits-all solutions without individual analysis
• Promises without explanation of risks
• No cooperation with local experts

My advice: Get several opinions. Including mine.

Future Outlook 2025: What Will Change and How to Prepare

Let me be honest:

The golden years of investment visas are over. What remains gets more expensive, more complicated, and more tightly regulated.

But – and this is important – not worse. Just different.

Portugal 2025: The New Rules

Portugal is steadily tightening the requirements:

What has already changed:

• Minimum stay: from 7 to 14 days in the first two years
• Language test: A2 Portuguese now mandatory for renewal
• Due Diligence: stricter anti-money laundering checks
• Geographic restrictions: now only Azores, Madeira, and inland

What’s coming in 2025:

• Minimum investment to be raised to €750,000 (my forecast)
• Stricter residence requirements
• Limited number of new visas per year
• Higher processing fees

My advice: If youre planning on Portugal, do it now. The window is closing.

Spain 2025: The Beckham Alternative

Spain is going a different way:

Rather than making investment visas tougher, Spain is focusing on highly skilled foreigners and entrepreneurs.

New developments:

• Digital Nomad Visa for remote workers
• Startup Visa for innovative companies
• Simplified procedures for EU citizens
• More attractive tax models for foreigners

This makes Spain more attractive to entrepreneurs who don’t just want to invest passively.

The Big Trend: OECD Tightening

Here comes the game changer:

The OECD is tightening tax optimization rules worldwide. This also affects investment visa programs.

What’s actually happening:

• Automatic information exchange among all EU countries
• Stricter substance requirements for companies
• CRS reporting also for real estate
• EU-wide anti-money laundering directives

This means: Hiding is impossible. Transparency is mandatory.

The Dubai Alternative Becomes More Important

Here lies the future for many of my clients:

Dubai still offers real tax benefits along with legal security. Combined with an EU visa, you get the best of both worlds.

Why Dubai will be the hot ticket in 2025:

• New free zone options for smaller businesses
• Simplified visa processes
• Better banking options for foreigners
• Stable political environment

The trend is toward a multi-jurisdictional strategy: EU residency plus tax-optimized residency.

New Players Enter the Market

Look beyond the obvious:

Interesting alternatives in 2025:

• Malta: New investment program in preparation
• Greece: Golden Visa being reformed, not abolished
• Italy: New visa options for entrepreneurs
• Cyprus: Comeback after the reforms

Diversification becomes more important. One country alone is no longer enough.

My Forecast for 2030

Let me look into the crystal ball:

In five years there will be two kinds of investment visas:

1. Premium programs: Very high investment amounts (€1m+), but genuine benefits
2. Entrepreneur programs: Lower sums, but real business activity required

Passive investments will lose their appeal. Active entrepreneurship will be rewarded.

Prepare yourself for that.

Frequently Asked Questions

Can I use both programs at the same time?

Yes, in principle you can invest in both Portugal and Spain. However, it only makes sense if you can justify the double cost with corresponding advantages. You still need to meet residence requirements in both countries.

What happens with Brexit – am I affected as an EU citizen?

Brexit only affects British citizens. As a German, Austrian, or Swiss citizen you still retain all EU rights. The Portugal and Spain investment visas give you additional local residency rights.

Do I have to use the property myself?

No, under both programs you can rent out the property. However, make sure that rental income in both countries is taxable and document all income properly.

How long does the entire process really take?

Expect 12-18 months from the first consultation to your visa card. Portugal tends to be slower than Spain, but both countries struggle with delays. Build in generous buffer times.

What if the laws change?

Acquired rights are generally protected, but renewal requirements can change. Portugal, for example, has already done this several times. It’s therefore essential to always have a plan B and keep track of developments.

Can I include my family?

Yes, both programs allow for the inclusion of spouses and minor children. Adult children are also possible in certain circumstances. Costs increase accordingly – plan on €2,000-5,000 per additional person.

Do I really need a lawyer?

Theoretically you can file both applications yourself. In practice though, it’s not advisable. The error rate is high and corrections are costly and time-consuming. A specialist lawyer pays off through time savings and risk minimization.

Whats the risk of rejection?

With proper preparation, the risk is low. Portugal has a rejection rate of about 5%, Spain is at 8-10%. The most common reasons are incomplete documents or issues in the background check.

Can I sell the property once I have citizenship?

This depends on each program. In Portugal, you can sell after you obtain citizenship. Spain has stricter rules – generally you should hold for at least 10 years. Check current regulations before selling.

What ongoing costs are there after getting the visa?

Beyond property costs (taxes, insurance, maintenance), there are visa renewal fees: Portugal €2,660 every two years, Spain around €1,000 per year. Add lawyer fees for renewal applications and possible translations.