Being a member of the single currency eurozone, Spain does not employ currency controls and has completely deregulated all individual and business transactions between residents and non-residents. The single European currency, the euro (EUR), is the second most traded currency globally after the US dollar. Sending money to Spain or transferring money from Spain is not restricted.
In some cases, Spanish residents who obtain foreign loans must file a report of this transaction if it exceeds EUR3m. Foreign direct investment (FDI) in Spain does not require prior government approval or official reporting, unless it originates from a tax haven or exceeds EUR3m. In an effort to combat money laundering and terrorism financing, the EU requires individuals transferring amounts over EUR10,000 in or out of the zone to declare it to the European authorities.
Sending money to Spain from within Europe has been vastly simplified in the last two decades. The introduction of the single currency in 1999 has made the transfer of money between the 18 member countries cheap and fast as the zone has created a single payments system. This single payment system extends to Iceland, Liechtenstein, and Norway, despite their retaining independent currencies.
The value of the Euro faltered with the 2008 global financial crisis and the resulting economic downturn in the Eurozone, which affected countries like Greece, Italy and Spain more heavily than the anchor economies, France and Germany. Nonetheless, the euro is one of the worlds most successful currency unions, and it serves as the peg for two common currencies in Francophone Africa, the Central African CFA franc (XAF) and West African CFA franc (XOF).
The euro is one of the most frequently traded currencies in the world. The most recent survey from the Bank for International Settlements shows that in April 2013, euros were most frequently exchanged for USD, Japanese yen (JPY), and GBP.
The creation of monetary union resulted in the adoption of a single monetary policy set by the European Central Bank (ECB). Spains central bank, the Banco de Espaa, ensures the stability of the countrys financial sector, and oversees payment systems.
Despite the countrys popularity as a holiday and retirement destination, buying property in Spain is not always straight forward and there are several steps to go through. Before you can make a purchase as a foreigner, you will need to obtain a fiscal number and also likely retain a lawyer who speaks Spanish and your language.
The taxes involved in buying a property in Spain can be much higher than other countries. You will need to allow for legal fees (around 1-2%), Stamp Duty (around 6-7%), IVA (Value added tax of around 7%) and property registration and notary charges that could be another 1%. Once you have transferred your money to Spain and bought the property, the transaction will need to be registered with the Spanish Land Registry. Be sure that you are advised correctly on submitting the correct value of your property to the authorities.
When you are budgeting for your property, if you are part of complex, expect there to be ongoing maintenance fees as well. You may need to be sending money to Spain regularly to cover these costs. Additionally, you are likely to incur some property taxes which can range in value from three to five figures depending on the size and location of the property. Non-residents are also liable for a wealth tax and capital gains if you sell the property. Spanish taxation is complex and we suggest you seek additional advice in this area.
The 468-sq km independent principality of Andorra, located along the border between Spain and France, was jointly ruled by representatives of both countries until the 1990s. The territory is a tax haven, and its small economy is dominated by finance, tourism and retail sales, since many items are duty-free. However, increasing integration in the Eurozone in recent years has minimised some of the benefit of Andorras tax-haven status, and its banking secrecy laws have been loosened under pressure from European Union (EU) authorities. While not a member of the union, Andorra has a preferential economic relationship with the EU and has adopted the euro.
The euro is made up of 100 cents. Euro banknotes are printed in denominations of EUR5, EUR10, EUR20, EUR50, EUR100, EUR200 and EUR500. Coins are available in values of 1, 2, 5, 10, 20 and 50 cents, and EUR1 and EUR2. Each member countrys central bank issues its own banknotes and coins; the latter have national designs on one side and common designs on the other. All euro currency from any country is accepted within the currency zone.
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