Spain changed the residency system a couple of years ago. Previously you got a nice little card which fit in your wallet or purse and you could just flash it in shops or when in official situations. Now when you get a Spanish residency you are given an A4 piece of paper that you are not supposed to fold or laminate and you are supposed to carry round your passport at all times too, right like that is going to happen!
This of course is a totally retrograde step but no protest seemed to be forthcoming and although life for expats has been made ever so slightly harder by this rather stupid action it is still worth getting the residency paperwork in Spain and going through the process if you are going to be living here long term.
Residency is something you have to do if you spend over half of the year in Spain. It is something you should do anyway if you are living here because it makes life a lot easier especially when buying and selling property. There is no 3% witholding tax on sales of Spanish property to residents despite the capital gains tax being the same for residents and non residents at 18%. Of course that money can be claimed back if there is no capital gain but to do so means employing a lawyer or gestor to do it for you.
Anyway watch the video and listen to the advice given and then make sure you also watch the videos below about the Padrón and the NIE number.