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All about those cash-cow nations in the world

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All about those cash-cow nations in the world

Vijaya Laxmi Tripura

In 2012, Portugal introduced ‘Residence Permit For Investment Activity Scheme’ when mired in a financial crisis and desperate to boost inward investment. Under this program, wealthy people around the world can gain permanent residency in the country, and then full citizenship after six years.

To secure this they have to invest €500,000 ($578,000; £450,000) in the Portuguese property market, or €1m in the wider economy, or create a business that employs 10 or more people.

Until 2018, a total of 6,416 people (60 percent of whom are Chinese nationals) have now successfully applied for one of the so-called golden visas, with the vast majority – 6,064 or 95 percent – going for the property option.

In total, the scheme has brought more than €3.9bn of foreign investment into the country, according to the Portuguese government. And this has led to a property boom in both Lisbon and Porto.

Similarly as Britain’s Visa Tier-1, in Portugal’s case, applications to the scheme are not sufficiently vetted, leading to some foreign criminals getting visas.

The cost of golden visas around the world

Antigua and Barbuda $100,000

Britain £ 2.5 million

Cyprus €2m

Republic of Ireland €1m

St Kitts $150,000

US $500,000

Vanuatu $160,000

Dominica US$ 200,000

The UK’s version of Portugal’s golden visa scheme is officially called a Tier 1 (Investor) visa. It differs in one significant way, in that applicants cannot invest in the UK property market. Also, the minimum investment is £2m, more than four times higher.

In 2017, the UK government issued 355 such visas, up 56 percent from a year earlier. The Home Office says it has no plans either to give out more golden visas post-Brexit, or to lower the investment threshold. In fact, a spokeswoman said that in 2015 it increased the investment level from £1m to £2.5m, to ensure that the visas were not being undersold.

EU nations:

European countries have received 25 billion euros in the last decade thanks to applications for the golden visa, which grants residency permits and even citizenship to non-EU citizens in return of money and investment, a report by an anti-corruption nongovernmental organization said.

In the past 10 years, European states granted citizenship to about 6,000 people while providing residency permits to about 100,000 others in return for investments, such as real estate sales or investment in local companies.

The countries that have made the most profit from the applications are Spain, Greek Cyprus, Portugal, the United Kingdom, Hungry, Greece, Malta and Latvia, according to Berlin-based Transparency International.

According to the report, Russian and Chinese nationals filed the most applications for the golden visa. In the last five years, Spain gave citizenship or residency permits to about 7,200 Chinese nationals, while Hungary awarded 5,431 Chinese applicants and Portugal awarded some 3,936 others. About 4,700 Russian nationals were granted visas by Spain and 12,000 others received visas from Latvia.

Some 617 Turkish nationals were granted the golden visa by Greece, Portugal and Hungary.

The cost of citizenship from an EU state varies depending on the country, but the average price is 900,000 euros.

Malta, which became an EU member in 2004, has come under criticism from the European Parliament for granting citizenship or residence permits to a large number of third-country nationals. Malta gained 205 million euros in the last 10 years from the applications.

The golden visa system in EU states has been criticized for providing an easy route for oligarchs and the super-rich, and even leading to a money laundering and other exploitations.

EU Commission expressed concern:

In January 2019, the European Commission has already warned EU member countries on the controversial “golden visa” which grants residency permits and even citizenship to non-EU citizens in return for money and investment, with criticism mounting that the scheme leads to corruption and organized crime.

The Commission’s report, called the golden visa a scheme that poses a danger to the continent’s security despite earning the continent millions.

In the past decade, European states have granted citizenship to about 6,000 people while providing residency permits to about 100,000 others in return for investments, such as real estate sales or investment in local companies, and have received 25 billion euros from such applications.

Sophie in ‘t Veld, a member of the European Parliament and the vice chair of its committee on civil liberties, justice and home affairs, said that although the EU is late to take such a decision, they will put restrictions on it.

“I welcome the fact the European Commission is, albeit belatedly, sounding the alarm. We need a ban on these schemes, which are exploited by organized criminals who often receive limited background checks, and to align rules for acquiring citizenship,” British daily The Guardian quoted her as saying.

Referring to golden visas and passports as “state-facilitated corruption and money laundering schemes”, In ‘t Veld said: “While some governments are busy building up a fortress Europe, they are cynically rolling out the red carpet for wealthy foreign criminals, who are then free to circulate freely in our single market. Golden visa schemes are essentially incompatible with free movement within the Schengen area.”

The British government announced in Dec. 2018 that they would suspended tier one visas, also known as the golden visa, until new regulations are put in place in 2019 due to exploitation and money laundering allegations. However, details about the new regulations have not been shared yet.

In September, the Observer reported that the residency permits of more than 700 Russians in the U.K. were under review, following the March nerve agent attack on double agent Sergei Skripal and his daughter in Salisbury.

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