According to LETA news agency report, foreigners have invested €1.17 billion (about US $1.5 billion) in Latvia to get temporary residence permits in the country.
The Latvian immigration authority, the Office of Citizenship and Migration Affairs, claims that they received 12,427 requests for temporary residence permits during the period 2010 to 2014, which included 5,267 applications from investors and 7,160 applications from the investors’ family members.
In 94.7% of the cases, the Latvian immigration authority took positive decisions and granted 11,754 residence permits. Eighty-two percent of the investments made by foreigners in Latvia to obtain residence permits have been in the real estate. This amounted to a total of €837.5 million.
Investment in credit institutions’ subordinated debt amounted to 12% whereas investments in companies’ equity capital amounted to the remaining 6%.
Over €111 million have been generated in Latvia as direct taxes and duties charged on these investments.
Latvia’s residency permits has buyers from 41 countries. But 90% of them come from the former Soviet republics.
According to statistics, applications for temporary residence permits from Chinese investors have been increasing sharply since last year. The number of Chinese applications saw an increase from a total of 136 in 2010-2012 to 789 in 2013 and the first half of 2014. This makes China the second largest supplier (after Russia) of investors to Latvia. Investors from Israel and the United States have also made applications for Latvian residence permits.
The Latvian Immigration Law was amended in 2010, thus allowing foreigners to get temporary residence permits in exchange for investments in Latvia. Evidence suggests that this has fuelled the inflow of investment in the country through property transactions.
However, the Latvian Security Police has warned that the growing demand for these residence permits from Russian citizens could pose security risks to Latvia. According to Security Police Deputy Head, Ints Ulmanis, “From the security services’ standpoint, the fact that the number of Russian citizens is growing (in Latvia) would require close scrutiny. They do not pose a threat to national security as individuals, but considering Russia’s rhetoric that it is ready to defend its citizens also in other countries and under any circumstances, they pose a security risk.”
Latvia’s Interior Ministry has cautioned that the inflow of immigrants from former Soviet republics could aggravate problems like the “self-sufficiency of the Russian language in the public environment and emergence and establishment of a parallel Russian-speaking society in Latvia”. The Ministry also stated that large number of foreigners buying properties in a particular area could increase the risk of ethnic discord.
Most foreign investors have bought properties in Latvia’s capital city Riga and the country’s seaside resort town Jurmala. Non-residents make up to 70% of all property buyers in Jurmala. Foreign investors are also the main buyers of luxury properties in the two cities.
From the 1st of September this year, the amendments to the Latvian Immigration Law came into effect. It increased the minimum price of property investment required from foreigner investors to obtain temporary residence permits to €250,000 from €150,000. According to the revised law, foreign investors seeking Latvian residence permits are also required to pay 5% of the value of the purchased property into the Latvian budget.
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