Why they are closing Golden Visa
What is a Golden Visa?
A Golden Visa typically grants residency to individuals who make a significant investment in a host country. This investment can take various forms, such as purchasing real estate, investing in businesses, buying government bonds, or making a capital transfer. In return, the investor and often their family receive a residence permit, allowing them to live, work, and travel freely within the Schengen Area. Some programs even offer a path to citizenship after a certain period.
Why Were They Introduced?
Many European countries introduced Golden Visa programs, particularly after the 2008 financial crisis, as a way to attract foreign investment and stimulate their economies. The influx of capital was intended to boost real estate markets, create jobs, and provide much-needed liquidity during challenging economic times. Countries like Portugal, Spain, Greece, Cyprus, and Malta saw significant benefits from these programs.
The Shifting Tides: Why Countries Are Closing Them Down
The reasons behind the recent wave of closures and tightening regulations are multi-faceted:
Concerns about Money Laundering and Financial Crime: This is perhaps the most significant driver. Critics argue that Golden Visa programs can be exploited by individuals looking to launder illicit funds or evade sanctions. The lack of stringent due diligence in some early programs allowed for potential loopholes, raising red flags for the European Union and international bodies.
Impact on Housing Markets: In popular investment destinations, particularly those with real estate-focused Golden Visas, there have been concerns about the programs inflating property prices. This can make housing unaffordable for local residents, leading to social discontent and exacerbating housing crises in certain areas.
Security Risks and Schengen Area Integrity: Granting residency to individuals without thorough security checks can pose risks to national security and the integrity of the Schengen Area. The European Commission has repeatedly voiced concerns about the potential for these programs to be misused by individuals seeking to bypass standard immigration procedures or gain access to the EU for illicit purposes.
Lack of Genuine Connection and Integration: Some argue that Golden Visa holders often have little genuine connection to the host country beyond their investment. This can lead to a perception of "selling" residency or citizenship without requiring meaningful integration into the society or economy.
Pressure from the European Union: The European Commission has been a vocal critic of Golden Visa programs, particularly those offering "citizenship by investment" (CBI) schemes, which they deem more problematic than "residency by investment" (RBI) schemes. The EU has initiated infringement procedures against some member states and urged all countries to phase out such programs, citing risks to security, rule of law, and the integrity of EU citizenship.
Political and Public Sentiment: As the downsides of these programs become more apparent, public opinion and political sentiment in many host countries have turned against them. Concerns about fairness, economic inequality, and the perception of preferential treatment for the wealthy have fueled calls for their abolition.
Countries Leading the Charge
Ireland: Closed its Immigrant Investor Programme (IIP) in early 2023, citing concerns about its appropriateness and effectiveness.
Portugal: Announced the end of its highly successful Golden Visa program for new real estate investments in early 2023, though other investment routes (e.g., cultural production, job creation) may remain, albeit with increased scrutiny.
Greece: While not fully closing, Greece has significantly increased the minimum real estate investment threshold for its Golden Visa in certain popular areas, aiming to cool down overheated property markets.
Cyprus: Its Citizenship by Investment program was already terminated in 2020 due to widespread allegations of corruption and misuse.
Malta: Faces ongoing pressure from the EU regarding its citizenship by investment scheme, having already made several adjustments under scrutiny.
The Future of Golden Visas
It's clear that the era of easily accessible Golden Visas in Europe is drawing to a close. While some programs may adapt and continue in a more restricted and heavily scrutinized form, the trend is towards greater regulation, higher investment thresholds, stricter due diligence, and a shift away from real estate-centric options.
The focus is moving towards investments that demonstrably benefit the local economy, such as job creation or contributions to innovation and sustainable development, rather than simply passive real estate purchases. The emphasis is shifting from attracting quick capital to fostering genuine economic integration and ensuring the integrity and security of EU residency.
For those considering a Golden Visa, the landscape is rapidly changing. Thorough research and understanding the evolving regulations are more crucial than ever. The golden age of Europe's Golden Visas appears to be fading, making way for a new, more cautious approach to attracting foreign investment.
