Ireland and Portugal’s decision to end their residence-by-investment (RBI) programmes has heightened scrutiny of similar schemes in the EU. But their growing popularity among foreigners, coupled with the emergence of new RBI options across the bloc, suggests they are here to stay.
The Irish government’s abrupt closure of its RBI programme on February 15 was followed two days later by the Portuguese government’s announcement that it would do the same. It follows the European Commission’s (EC) growing criticism of so-called ‘golden visas’, which grant foreigners residence permits in exchange for investment.
RBI programmes raise “security, money-laundering, tax evasion and corruption risks” for both the member state concerned and the EU as a whole, spokesperson for EC home affairs, Anitta Hipper, told fDi.
The closure of Ireland and Portugal’s programmes has drawn comparisons with EU citizenship-for-investment programmes, which have also been phased out in recent years. Malta is now the only member state to offer so-called ‘golden passports’, which offer citizenship in exchange for qualifying investments. The EC has referred its government to the European Court of Justice on the grounds the programme breaches EU law.
However investment migration experts believe golden visas face a different future. “Some [programmes] will be popping up and others will be closing down. I don’t think it’s a one-way street,” said Dimitry Kochenov, professor of legal studies at CEU in Budapest and Vienna.
Today, 17 EU countries offer golden visas. Minutes from the EC’s latest meeting on investor citizenship and residency, published in November, show that the Netherlands is terminating its programme while the Czech Republic and Luxembourg are considering doing the same. Meanwhile Italy’s parliament is set to vote in the coming months on a bill to expand the types of investments that open the door to its ‘dolce visa’ and Finland is studying the possibility of opening its first RBI programme.
Demand despite controversy
Global interest in golden visas continues to grow, according to migration consultancy Henley & Partners which received a record-high number of enquiries in 2022. Interest in Europe’s programmes follows a similar trend, said Henley’s chairman Christian Kaelin, with the US overtaking China in recent years as the top source of interest.
Henley’s latest RBI index ranked Portugal’s programme as the world’s most attractive and Astons, another investor migration firm, forecasts that Greece will replace the Iberian country as US investors’ RBI location of choice.
But scandals involving Cyprus and Bulgaria’s golden passport programmes — plus a 2014 corruption investigation into Portuguese golden visas — have made residency investing a controversial topic. “There needs to be an improvement on the types of checks that are carried out” on applicants, said Maíra Martini, corrupt money flows expert at Transparency International.
The organisation has called for governments to stop outsourcing background checks and for EU-wide legislation setting minimum RBI standards, but the EC is pushing ahead with regulating the area via existing residence rules.
Proponents of golden visas argue that Europe’s programmes are sufficiently robust and that they are not more vulnerable to abuse than other systems. “Banks know that out of every 1000 customers they onboard, a certain number turn out to be shady characters. So they close the accounts and cooperate with the authorities. It’s the same with these programmes,” said Mr Kaelin.
Golden visas granted for buying property have generated the most pushback, as they often consist of a one-off cash injection with minimal residence or other ongoing requirements. But Mr Kaelin highlights that they are also used by investors opening local businesses. “The EU needs entrepreneurs, investors, people who create jobs. And in return they need a residence permit,” he said.
Research by Oxford University shows that by 2020, golden visa programmes had facilitated €20bn worth of investment into the EU.