Question
“What are the advantages and disadvantages of having Spanish nationality in addition to American citizenship versus only having permanent residency in Spain as an American citizen?”
Answers
These are the answers of Spainguru’s Facebook group members:
“For me at the moment it’s beneficial because If I want to go to any EU country to live, work or open a business I can do it without any problem. I do not have to go through the immigration process again. Just do the padron and that will be all. I am part of the communitary regimen at that point.”
“Very few advantages to having Spanish citizenship vs. permanent residency other than voting. On the downside, your tax situation can change for the worse as a Spanish citizen; since Spain technically disallows dual citizenship with the US, you lose some tax advantages and inheritance rules can change.”
“While the US recognizes dual citizenship with Spain, Spain technically requires a verbal renunciation of US citizenship, which has no real effect in the US.”
“The biggest downside for me was the tax implications. As a Spanish citizen, you might be subject to different tax regulations which can complicate your financial planning, especially with assets in the US.”
“One major benefit is the ability to participate in Spanish elections. It feels empowering to have a say in the local government decisions that directly affect your daily life here.”
“I was concerned about inheritance laws. In Spain, these can be quite different from the US, and as a citizen, your estate might be distributed in ways you didn’t intend without proper planning.”
“If you’re looking at education opportunities in Europe for your children, Spanish citizenship can open doors to universities across the EU with more favorable tuition rates.”
“If you are a US citizen and you move to Spain and become a resident and your work situation qualifies you for the Beckham tax reduction, you would lose that benefit if you became a Spanish citizen.
That’s five years of paying only 24% tax instead of 46-48% down the drain. I’d wait until those 5 years are up and then apply for citizenship (solely for the benefit of being an EU citizen with the right to freedom of movement throughout the EU).”
“If you have a military pension, it would be affected.”
“One thing I read is if you have a US government pension (different than social security), Spain only taxes it if you become Spain citizen, but not if you are only Spain resident”
Conclusion
Deciding between Spanish citizenship and permanent residency is a significant choice that hinges on personal circumstances and long-term goals. The ability to move freely within the EU, participate in Spanish elections, and access education at EU rates presents compelling advantages for obtaining Spanish citizenship.
However, the complexities of tax implications, the necessity of verbal renunciation of previous citizenships, and potential changes to inheritance laws pose substantial challenges. For those with US pensions or specific tax benefits, such as the Beckham law, the financial repercussions can be especially consequential.
Ultimately, this decision requires a careful evaluation of how Spanish citizenship aligns with personal, financial, and familial objectives, acknowledging both the freedoms it grants and the obligations it entails.
