Spain plans to ban golden visas from January, but one country is reintroducing them!
Obtaining the right to live and work in another country can be a long and difficult process. But this is not always the case for those with money to spend. Golden visas offer the opportunity for wealthy people to essentially 'buy' residency sometimes without even having to live in the country.
And their popularity in the European Union is growing as people seek to leave countries facing instability and political decisions like Brexit that could limit their safety and rights. With the unstable political and social environment in the US in recent years, the demand for golden visas from Americans was also expected to increase. But golden visas are now being phased out across Europe.
Spain has finally secured a legal path to end golden visas through property investment, with reports suggesting the ban could come into effect by January 2025. The ban, which is still being debated, could affect other investment avenues.
Portugal removed real estate investment as a basis for golden visa applications in October 2023 in the hope of reducing property speculation. The Netherlands followed suit, ending its golden visa scheme in January 2024. But Hungary has bucked the trend by reintroducing its golden visa scheme, with applications open from this month.
What is a golden visa?
Residency by investment schemes, otherwise known as 'golden visas', offer people the chance to obtain a residence permit for a country by buying a house there or by making a large investment or donation. Each applicant must be over the age of 18, have a clean criminal record and have sufficient funds to make the required investment.
There are also golden passports, officially known as citizenship by investment programs, that allow foreigners to obtain citizenship using the same means. For countries in the EU, this also means having access to many of the benefits of being a resident of the bloc, including free movement between countries.
Why is the EU against visas and golden passports?
In 2022, the European Commission called on EU governments to stop selling citizenship to investors. Although this is different from golden visas, which offer permanent residency rather than citizenship, the call came as part of a move to crack down on this multi-billion euro combined industry. In the wake of the war in Ukraine, there were concerns that these schemes could pose a security risk.
Brussels also called on countries to double-check whether people sanctioned because of the war had a golden passport or visa they had issued. In the past, the EU has also said that schemes of this type are a risk to security, transparency and the values that underpin the European Union project.
In October 2022, the European Commission asked Albania to "refrain from developing an investor citizenship scheme (golden passports)". Such a scheme would "pose risks related to security, money laundering, tax evasion, terrorist financing, corruption and infiltration by organized crime and would be incompatible with EU norms," he warned in a report. The country has since suspended its plans to introduce a golden visa.
Threats also come from outside the bloc. Also in October 2022, the European Commission proposed a suspension of Vanuatu's visa waiver agreement due to the dangers of the golden passport. This is because the scheme enables third-country nationals to acquire Vanuatu citizenship, which then grants them visa-free access to Schengen countries.
Which other countries have scrapped their golden visa schemes?
In February 2022, the UK government scrapped its golden visa scheme that allowed wealthy foreign nationals to settle in the country in return for taking some of their wealth with them. The decision to end the scheme came as part of a move to crack down on dirty money from Russia.
In February 2023, Ireland also abolished its golden visa scheme, the Immigrant Investor Program which offered Irish residency in exchange for a donation of €500,000 or a three-year annual investment of €1 million in the country.
Ireland had already suspended the scheme for Russian citizens in March 2022 as part of sanctions imposed on the country over its invasion of Ukraine. The following month, the European Parliament warned that the program was vulnerable to tax abuse. The final decision to end the scheme was the result of various international reports and internal reviews.
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