THE Spain could be the next EU country to crack down on golden visas. With the EU warning against citizenship by investment schemes, some Spanish politicians are trying to pull the trigger on golden visas.
Obtaining the right to live and work in another country can be a long and difficult process. But this is not always the case for those with money. Golden visas offer wealthy people the opportunity to effectively “buy” residency – sometimes without even having to live in the country. And their popularity is growing in the European Union as people seek to distance themselves from political decisions such as Brexit that may limit their rights.
Due to the volatile political and social environment in the US in recent years, applications for golden visa from americans was also expected to increase.
However, golden visas are gradually being abolished throughout Europe. THE Portugal in October, it modified its system to remove real estate investment as a basis for golden visa applications, hoping to reduce real estate speculation.
In the same month Holland announced that it will end the golden visa system in January 2024.
THE Spain could soon follow. The country proposed tightening its golden visa requirements earlier this year, and in December the government’s junior coalition partner Sumar expressed support for scrapping the program.
So what exactly are these golden visa schemes and why has the EU raised questions about their security in recent years?
What is a Golden Visa?
Investment housing programs, also known as “golden visa”, to offer people the opportunity to acquire residency for a given country by buying a house there, or by making a large investment or donation. Applicants must be over 18 years of age, have a clean criminal record and have sufficient funds to make the required investment.
There are also golden passports, officially known as citizenship by investment programs, which allow foreigners to obtain citizenship through the same means.
For EU countries, it also means access to many benefits of being residents of the bloc – including free movement between countries.
Why is the EU against golden visas and passports?
In 2022, the European Commission called on EU governments to stop “selling citizenship” to investors.
While this differs from golden visas, which offer permanent residency rather than citizenship, the call came as part of a move to crack down on the multi-billion euro combined industry. After the war in Ukraine, there were concerns that these programs could pose a security risk. Brussels also asked countries to double-check whether people sanctioned because of the war had been issued golden passports or visas.
In the past, the EU has also stated that systems of this kind pose a risk to security, transparency and the values on which the European Union project is based.
In October 2022, the European Commission called for this Albania “refrain from developing an investor citizenship (golden passport) system”. Such a system “would present risks in terms of security, money laundering, tax evasion, terrorist financing, corruption and organized crime infiltration and would be incompatible with EU rules,” the report warned. The country has since suspended its plans to introduce a golden visa.
Threats also come from countries outside the EU. In October 2022, the European Commission also proposed to suspend Vanuatu’s visa-free agreement due to the risks to the golden passport. This regime allows third-country nationals to obtain Vanuatu citizenship, which will then ensure visa-free access to the Schengen countries.
Which countries have abolished golden visa regimes?
In February 2022, his govt United Kingdom abolished the golden visa system that allowed wealthy foreign nationals to settle in the country in exchange for bringing some of their wealth with them. The decision to end the regime came as part of measures to curb money laundering from Russia.
In February 2023, Ireland he also banned the Golden Visa scheme – a migrant investor scheme – which offered Irish residency in exchange for a €500,000 donation or a three-year €1 million annual investment in the country. Ireland already suspended this regime for Russian citizens in March 2022 as part of sanctions imposed on the country for its invasion of Ukraine. The following month, the European Parliament warned that the system was vulnerable to tax abuse. The final decision to end the regime was the result of various international reports and internal reviews.
In February 2023, its premier Portugal Antonio Costa has announced plans to end the country’s housing boom through an investment plan to tackle property speculation and rent prices. Until then, foreigners could either buy property or invest some of their wealth in the country – known as capital transfer investment – in exchange for housing.
Between January and August 2022, the program brought almost 398 million euros to the country, according to Portugal’s national news agency LUSA.
Madeira has opposed the decision to end Portugal’s golden property visa, which has brought many high-income foreigners to the autonomous region.
From 6 October 2023, it is no longer possible to apply for a golden visa through a property investment in Portugal. However, the new rules do not apply retroactively to existing visa holders.
Which EU countries still offer golden visas and what are the conditions?
There are only a few places in the EU that still offer golden passports. One of these countries is Malta. Here, the minimum investment amount starts from €690,000 and offers citizenship from 12 to 36 months.
However, many others still offer golden visa programs. Here are some examples of exactly how much it costs to buy an investment property in these countries.
Does Spain still offer a golden visa?
Spain started its residency by investment program in 2013. It also grants residency to foreigners and their families who invest in real estate in the country. A property investment of €500,000 is required to obtain a Golden Visa, which entitles you to live, work and study in Spain.
A visa can also be obtained by starting certain types of business activities in Spain, with shares or bank deposits of a minimum value of 1 million euros in Spanish financial institutions, or by investing in government bonds with a value of at least 2 million euros.
However, some politicians have called for the plan to be stopped. In February 2023, the center-left political party Más País presented a bill to abolish or drastically modify Spain’s housing through investment program, saying it affects house prices and is not beneficial to the economy.
Party President Iñigo Errejon told reporters on May 8 that a preliminary agreement had been reached with the Ministry of Social Insurance to end the program.
“Spanish citizenship cannot be bought,” he said, while blaming golden visas for the “brutal” rise in housing prices that is forcing residents to leave their neighborhoods. Errejon also argued that the program did not create many new jobs.
Renewed support for ending the golden visa regime in Spain in December was backed by its government coalition partner Sumar, who wants to tackle rising property prices.
There has been no formal agreement to end the program, but according to local media reports, Spain is considering stricter application requirements. This could include increasing the investment requirement to 1 million euros, as real estate experts believe that the minimum amount of 500,000 euros is no longer enough and cannot be considered the price of a luxury property.
The golden visa system of Italy
THE Italy is another popular destination for those looking to acquire an investment property. Introduced in 2017, the Golden Visa grants third-country nationals a two-year residence permit in exchange for an investment in Italy.
The minimum investment here is €500,000, which must be done through an Italian limited country. Holders of these visas can include their family in the application and take advantage of the special tax status. Once those using this system have lived in Italy for 10 years, they can obtain citizenship.
Golden visa system for Greece
THE Hellas offers golden visas with one of the fastest residency procedures. Eligible aliens may obtain a permit within 60 days of application.
It had one of the lowest investment thresholds with just €250,000 spent on property in the country. In September, the authorities increased this amount to 500,000 euros to increase the availability of real estate for local residents. The new limit applies from May 1, 2023.
This update will cover the greater Athens area, the Municipality of Thessaloniki and the islands of Mykonos and Santorini, but the €250,000 limit will remain the same in other areas. Golden visa holders are not required to stay in Greece to keep their visa.
By the end of 2021, the country has recorded 9,500 applications for these homes from investment schemes, one of the highest figures in Europe.