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Banking for Expats in Spain

Author: Gavin Adie
Submitted: July 2013

Bank accounts on offer to expatriates in Spain are divided depending on whether the expatriate is deemed to be a resident or non-resident for tax purposes.  In general, fees for banking in Spain can be higher than in the rest of Europe, but several banks compete for the business of expatriates and concessionary deals can be secured.

Bank accounts are offered to both resident and non-resident accounts, but non-resident accounts generally attract higher fees.

When you first relocate to Spain, you will be considered to be a non-resident and therefore eligible only to a non-resident account (“Cuenta para No Residentes”.) Aside from the fees issue, some banks will only provide Spanish residents with credit cards. However, interest income received by non residents is not subject to withholding tax.

To establish a non-resident account you will be required to apply to the local police station for a certificate verifying that you are a non-resident. Alternatively, some banks provide this service as an extra, incurring an additional, low charge. This process, if done in person, generally takes ten days, while it will take longer if the bank acts as an intermediary in the process.

When establishing a bank account, formalities will include the provision of one form of identification, such as a passport, and proof of address, such as a utilities bill.

If you desire to establish an account before arriving in Spain, you will be required to attend your new Spanish bank in person after arrival.

If your identity as a non-resident has been verified and an account established in this regard, the bank will customarily check on a six monthly basis whether your status as a non resident has changed. This is due to Spanish residency rules that stipulate you are deemed to be resident if you are based in Spain for more than 183 days in a twelve month period, and if you receive Spanish income or own a business in Spain. You are legally required to notify your bank if your residency status changes to ensure that withholding tax is collected and remitted on interest payments.

The process for establishing a resident bank account is very similar but the bank may require that you provide proof of employment, either by furnishing an employment contract or pay slip. You will also be required to show your NIE card (tax identification card,) which is provided to resident foreigners in Spain.

Many banks commonly offer multiple-currency accounts to expatriates, in recognition of the significant expatriate community from Britain and the United States.

To overcome the language barrier, many banks in cities and areas frequented by expatriates will have English-speaking personnel, but more rural areas may not.

Fees tend to be high for banking in Spain but several banks offer packages specifically catered to expatriates, sometimes with lower fee rates and less expensive international transfers.

The Spanish banking market is diverse as many Spaniards and expatriates alike often opt to bank with regional banks.

There are different types of banks in Spain, savings banks “cajas de ahorros,” and banks offering current accounts, known as “bancos.”

“Cajas,” not-for-profit banks in Spain, offer bank accounts with lower fees, where proceeds are used to fund cultural events, but are often home to longer waiting lines,.

The main banks in Spain include Cajamar, Unicaja, La Caixa, Sol Bank, BBVA, Banco Popular, Banco Santander, Bank Inter, and Catalunya Caixa, among numerous others.

Solbank, as well as Citibank and Halifax, Deutsche Bank Espana, Catalunya Caixa, La Caixa and Banco Sabadell, are held in high regard by expatriates on online forums.

It is worth noting, Lloyds TSB, which built up a significant expatriate following offering reduced fees for expatriates on certain conditions, is expected to finalize the sale of its Spanish operations to Banco Sabadell during 2013.

Despite their relatively small size, some Spanish regional banks have established branches in other countries to secure foreigners' business, such as Banca March and its London-based branch.

Basic current accounts, “cuenta corriente” in Spanish, generally yield interest rates lower than one percent, while savings accounts yield higher rates but the number of allowed permitted within a year is generally capped. There are also deposit accounts (“cuenta de deposito”) which prevent withdrawals but pay significantly higher rates of interest.

Banking services come at a cost in Spain. Generally, after the initial costs of establishing an account, you can expect to pay around EUR30 each year in transactions and account maintenance costs. Most banks however do not require a minimum level of deposit.

You will generally have to pay a fee for establishing an account and, depending on the type of account, annual fees. A multitude of transactions can attract fees in Spain, most notably account transfers. These fees can present a deterrent to people considering transferring their savings to a Spanish account.

Withdrawals from ATMs operated by banks other than your own will attract fees. ATMs often have English-language functionality, however.

Credit and debit cards can be used in shops, but cash payments have historically been encouraged. You will be required to provide proof of identity, as is a legal requirement in Spain.

Checks are infrequently accepted by retailers, and where accepted a check guarantee card will be required.

Rules surrounding paying bills and establishing direct debits are more relaxed in Spain, through the granting of permission to debit an account, rather than through the signature of a direct debit agreement as is more common elsewhere. Likewise, direct debits should be canceled both with the bank and the concerned party to ensure that the funds cease to be transferred periodically.



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