While Malta’s decision to offer citizenship to applicants complying with specific investment requirements has evoked strong reactions from various quarters, a recent Financial Times series indicates that Malta is not the only nation offering permanent residency or citizenship to high net-worth individuals in lieu of direct investments into the country.
The FT series highlighted numerous instances of European nations with stressed economies resorting to golden visa schemes and other programs to attract investment from wealthy investors from China and other countries.
Portugal is the preferred destination for Chinese investors with more than 1100 of the 1560 golden visas issued since Oct 2012 being issued to Chinese citizens. Rated as the most successful visa program amongst its European peers, the golden visa scheme has resulted in inflow of investment of close to €900m into Portugal’s real estate sector. This figure, according to estimates, is expected to rise to €2 billion by Dec 2015.
The scheme requires applicants to invest at least €300,000 in Portugal and offers residence for a period of five years and the option of applying for permanent residence to the investor and his or her family. This scheme is open for all non-European applicants. Lisbon and other Portuguese cities are perceived as an ideal base for businesses that want access to European markets and markets of other Portuguese-speaking nations like Brazil.
Other countries offering such programs include Hungary, Malta, Cyprus, Greece, Latvia, and Spain.
An investment of €250,000 in Hungarian government bonds entitles the applicant to residency visas in the country. Malta and Cyprus offer residence permit in exchange of investment of €220,000 and €300,000 respectively.
Spain mandates a real estate investment worth not less than €300,000 and Chinese applicants constitute a third of the 134 visas issued till date. However, the ten year waiting period before the applicant is entitled to apply for permanent residency is a drawback.
Greece has received a few dozen applications after it began offering residence permits with five-year tenure in exchange of real estate investment of not less than €250,000.
These visas, which offer the privilege of visa-free travel to 26 Schengen area member states, have contributed significantly to the revival of the real estate sector of these nations. Hit hard by the recession, the steady increase in investment immigration applications is reviving the property market across the Continent.
However, these schemes and programs are often criticized for risk of abuse with questions being raised on the potential long-term impact of offering citizenship for a price.
Many Chinese investors are opting for these residency visas as a backup option in the event of something going wrong in their country. Although the short-term benefits of inflow of funds are significant, experts are raising questions about whether the countries will enjoy long-term benefits from these programs.
The FT series has revealed four out of every five Chinese investors don’t intend to reside beyond the time period mandated by terms and conditions of the residency visa. This minimizes the chances of such Chinese investors becoming permanent residents of the nation and the European Union despite applying for and obtaining the residency visa.