Following the UK, Portugal, and Ireland, Spain will axe its “Golden Visa” scheme, a fast-tracked residency for foreign investors.
At a cabinet meeting on April 9, Spanish ministers reached a consensus on scrapping the visa program.
Prime Minister Pedro Sánchez told reporters while visiting the Sevillian municipality of Dos Hermanas on April 8 that the move is to avoid speculative investment into housing, as a majority of visa recipients were concentrated in Madrid, Barcelona, and other tourist cities, putting the local housing market “under enormous pressure.“ Mr. Sánchez added that ”it is almost impossible for people who live and work in those places and pay their taxes each day to find affordable housing.”
The golden visa enables non-EU citizens who purchase a property worth at least 500,000 euros ($530,000) to be granted a residence permit and live and work in Spain for three years.
The scheme also grants residency to those who invest in emerging Spanish companies or 2 million euros ($2.1 million) or more in state bonds.
Spain promulgated the visa scheme in 2013 when the eurozone crisis hit the southwestern European country hard.
Lai Jianping, a former Beijing lawyer and Canadian chairman of the Democratic Front, spoke to The Epoch Times on April 11 and said that “foreign investors entering into EU states may have led to the prevalence of speculative behavior and aggravate the inequality between the middle and lower classes of the locals.”
More EU Countries Discontinue Golden Visa
Spain is just the latest European country to phase out its residency by investment program. The UK ended its golden visa program in February 2022. Portugal revised its program in October 2023, removing real estate investment as a basis for golden visa applications to reduce property speculation.
Risks of Residence by Investment Schemes
“Golden passports” differ from golden visas in that they are a path to citizenship, not merely temporary residency. However, both schemes make the benefits of residency or citizenship available based on investment.The EU has warned against the risks of residence by investment schemes, whether they are golden visas or golden passports.
In 2022, the European Commission called on EU members to cease selling citizenship to investors. The call was primarily driven by security concerns, especially after the Russia–Ukraine war. Brussels also called on member nations to double-check whether those sanctioned due to the war held golden passports or visas.
In October 2022, the European Commission urged Albania to “refrain from developing an investors’ citizenship scheme (golden passports).” In a report, the EU warned that such a scheme would “pose risks regarding security, money laundering, tax evasion, terrorist financing, corruption and infiltration by organized crime.” Subsequently, Albania suspended plans to introduce golden visas.
The golden visa scheme is also thought to pose threats from outside the EU bloc. In October 2022, the European Commission proposed suspending Vanuatu’s visa-free agreement as it allowed third-country nationals to acquire citizenship in the tiny Oceania country, giving them visa-free access to Schengen area countries. The Schengen area encompasses 29 European countries that have abolished border controls at their mutual borders.
European countries that initially hoped to boost economic growth through investment migration have found the results underwhelming, and the golden visas have yet to achieve this goal, according to Li Yuanhua, a former professor at Capital Normal University.
Mr. Li alleged that foreigners can use the program to transfer assets or to achieve ulterior personal goals. “For instance, an investor with a ’special mission' may more likely damage the host country’s interests after securing residency.”
Only a few EU countries—notably Malta—still offer golden passports. To obtain a golden passport on the wealthy island, the minimum investment starts at 690,000 euros (about $740,000), and citizenship can be applied after 12 to 36 months of residency status.
While more countries still offer golden visas, they are being phased out across Europe.
Popular Destinations for Golden Visa Investors
Among countries still offering golden visas, Italy is a popular destination. Launched in 2017, the Italian golden visa program allows non-EU citizens to obtain a two-year residence permit by investing in Italy. Investors must invest 500,000 euros ($530,000) in an Italian limited company. Once the investor has lived in Italy for ten years, they are eligible for Italian citizenship.Greece, another popular destination, has resisted pressure to abolish its golden visa program. Its golden visa is one of the fastest ways to obtain residency in the country, with qualified foreigners granted permission within 60 days of application. In addition, Greece’s golden visa holders do not need to live in Greece to keep their residency status.
As other countries have shuttered their golden visa programs, interest in Greece’s golden visa has increased dramatically, quadrupling over the past year.
Greece used to have one of the lowest thresholds for obtaining a golden visa through real estate investment—only 250,000 euros ($260,000). However, in 2023, the Greek government raised the amount to 500,000 euros ($530,000) to purchase a home in certain high-demand areas.
Last month, the country’s finance ministry announced new regulations that require a minimum investment of 800,000 euros (about $870,000) in high-demand areas. The new rules will also raise the golden visa threshold to 400,000 euros (about $425,000)for the rest of the country.
