They're called “golden visas” because, like gold credit cards, they're designed to attract people with money. It's a trend that's sweeping Europe and its particularly battered economies.
Greece's Ionian Islands Photo: Greek Tourist Board
“For Sale: 3-Bedroom, Comes With EU Residency Permit” is how one British newspaper explained the expanding offer. If you have the money to invest either in a new or existing local business, or in property in many of the 28 European Union countries you would be offered a temporary residency permit as a bonus and incentive.
In October, the Netherlands will become the latest EU country to follow the trend when “rich foreigners are to be offered temporary residency permits if they agree to invest at least €1.25 million in Dutch companies,” according to Dutch News.
The visa will be good for one year and can be renewed, as in other EU countries that feature variations of the offer. The candidate must meet certain conditions including the creation of local jobs and anti-money-laundering proof of the sources of the money.
“Applicants will also be subjected to personal checks to ensure they are not a threat to public order,” the Dutch Justice Ministry explained.
Such incentives to attract foreign investment are not new. The United States, Canada, Australia, Britain, France and Ireland, among others, operate similar schemes to speed up residency permits for individuals investing in businesses or buying property worth more than one million (dollars, pounds or euros).
What is new, however, is the growing popularity of the visa-for-investment exchange around the EU as the permits become accessible to a far larger number of less wealthy foreign investors, who could buy a second home abroad.
The deals are offered mainly by countries more affected by the economic crisis and the competition among them is increasing as well as they bid to outdo each other with affiliated perks. Conditions can vary from country to country and some require less investment than others.
In general, the golden visa offers the right to live and travel (but not work) anywhere among 26 countries of Union's member states (signatories to the Schengen agreement that allows unrestricted travel), including all Western Europe excluding Great Britain.
In some of the countries, the new owners can apply for permanent residency after four to six years of minimal residence requirements - meaning one or two weeks a year in-country.
Earlier this year, Portugal began offering to speed residency applications to people buying properties worth a minimum €500,000. As a result, the government expects as many as 10,000 homes will be sold this year to foreigners. The applicant's investment can be spread over more than one property. Portugal also offers residence permits for investments of €1 million into any company in Portugal, or creating 10 new jobs in a business.
In Cyprus, the requirement is less: a €300,000 property; in Greece, with its dire economic crisis, €250,000 is enough. That amount can buy property in a tony Athens neighborhood, or a renovated villa on a Greek island. The residency permit is good for five years and may be extended to other family members.
In Turkey, an EU wannabe, the golden visa law passed last year has seen 11,000 properties across the country bought by foreigners, according to Ministry of Environment and Urban Planning.
Spain is about to kick off its program, setting the minimum property investment at €500.000 in exchange for a one-year visa, renewable every two years after that. The Bank of Spain reports that foreign investment in the Spanish property market has increased during the economic crisis, mainly due to the sharp fall in prices.
The targets for these incentives are primarily investors from Asia, Russia and America. Reportedly, more than 20 Chinese nationals land in Cyprus each day searching for property.
