The steady rise in number of countries offering citizenship or right to reside in lieu of investment has resulted in more and more wealthy individuals resorting to diversification of passport portfolios. The process involves investing money or purchasing property in EU, North American, Australasian, or Caribbean countries and acquiring economic citizenship without onerous residency requirements.
Recently, Australia introduced a new Investor Visa offering permanent residency after residence of just twelve months provided the applicant investments at least $15 million in the country. This new Visa is in addition to the existing Significant Investor Visa that allows applicants to gain permanent residency four years after a minimum investment of $4 million.
According to the BBC, thousands of wealthy individuals are spending more than $2 billion every year to obtain a second or even a third passport. Investment immigration is very popular amongst high net-worth individuals residing in China, Russia, and the Middle East. The preferred destinations are developed countries in the European Union along with the USA, and Australia.
European countries who continue to face economic instability after the devastation caused by the recent economic crisis are relying on Golden Visa schemes to attract investment to their vulnerable economies. Today, investors can acquire temporary residency in countries Portugal, Latvia, Malta, Spain, and Cyprus by pumping funds into the economies through purchase of bonds, contributions to the exchequer, or by simply purchasing property in these nations. Latvia offers residency for an investment as low as €35,000. Portugal’s Golden Visa has enjoyed steady demand despite the relatively high investment requirement of €500,000
In 2014, Bulgaria introduced a new system that allowed foreign investors to enjoy fast-track access to residency permits in exchange of investments of not less than €200,000 combined with a two-day visit to the country. This year also saw Malta, also a member of the EU, offering residency permits to those investing not less than €650,000 in the country.
The nation did not impose any prior residency requirements whatsoever. Post criticism, the country modified the investment immigration program and required investors to purchase real estate worth at least €350,000 combined with government bonds purchase worth not less than €150,000. Malta witnessed an inflow of more than €200 million from more than 200 investors who sought residency in lieu of investment.
The rising popularity of investment immigration schemes offering passports or residency visas for a price is triggering security concerns in the European Union. Instances of corruption scandals in countries running these schemes has raised doubts about the level of transparency being followed in such schemes and the level of accountability imposed on the authorities.
The recent scandal in Portugal’s Golden Visa scheme saw the arrest of the country’s top border agency official along with ten other persons. The scandal also led to the resignation of the Interior Minister of the country. The scam involved purchase of properties with value significantly lower than the minimum requirement of €500,000. The difference was distributed as bribes and payoffs amongst the officials.
The scandal assumes significance considering that the country earned more than €1 billion from 1775 golden visas issued from 2012 to 2014. Most applicants come from China Russia, Angola, and Brazil, which Chinese applicants accounting for 80% of all visas issued. The fact that a legal resident of Portugal can easily travel to 26 EU countries that form a part of the Schengen Agreement is a significant attraction for investors and a major security worry for other member nations of the European Union.
Many member nations of the European Union offer temporary residency permits to individuals and their families on basis of investments in businesses—new or old, or real estate. With average minimum investment around €500,000, the visa allows investor immigrants and their family members to travel and reside in all the member nations of the Schengen Area. After five years of residence in any nation, the individual becomes eligible to apply for permanent residence in that EU nation.
A report by the Migration Policy Institute notes that there has been a dramatic increase in the number of nations offering investment immigration programs. While such programs and schemes have always been a part of government policy, globalization combined with increasing interest amongst immigrant investors has resulted in an increase in demand for such programs amongst high net-worth individuals.
While such programs may seem beneficial for all involved parties, there is no certainty about the overall efficacy of such programs. In theory, investors would enjoy better facilities abroad along with protection from political and economic issues in their home nation. Children enjoy access to good education and career facilities, and the new passport facilitates hassle-free travel. The destination countries, in theory, enjoy inflow of funds, newer revenue-creation opportunities, and creation of jobs.
However, the actual benefits of inviting economic immigrants have not been very attractive. This has led to experienced nations reviewing the entire idea of investment immigration even as newer nations develop policies to join the investment immigration bandwagon.
Source: www.forbes.com