The Global Evolution of Investment Migration Industry of Golden Visas
In the midst of the Covid-19 pandemic, many people find the idea of a secondary residency or citizenship appealing. At the same time, many countries are interested in raising capital and bringing wealth across their borders to pay for social programmes and keep their economies afloat - specifically if they rely on leisure and tourism for tax income.
At the centre of these interests are investment migration programmes, in-demand in the US and UK, but now available worldwide in countries including Portugal, St. Lucia and Montenegro, granting residency or citizenship to foreign investors. In some cases, these schemes are known as “Golden Visas.”
Popularized after the 2008 financial crisis, residence- or citizenship-by-investment programmes have undergone significant changes in recent years, in part due to pressure from governments to clamp down on immigration and require more transparency related to foreign investment. But even with these concerns, the supply-side of these programs has expanded - a trend that experts expect to continue, as more programmes are likely to crop up because of the financial stress caused by Covid-19.
At the same time, there has been increased interest and demand for these sorts of programmes from high-net-worth individuals who want easier global mobility, volatility management and investment diversification, including interest from people outside of the traditional countries.
Many of these programs were specifically launched after the financial crisis in 2008, when countries needed a way to support the local economy. These countries opened their doors to high-net-worth individuals in exchange for a significant real estate purchase or other business investment. Cyprus created an investment program in 2012, Malta launched its investor program in 2014, and Golden Visa programmes were introduced in Portugal, Spain and Greece.
Portugal’s Golden Visa programme, launched in 2012, is currently surging. The programme offers investors who purchase a property for more than € 500 000 in a city or a bit less in a low-density area the opportunity to get a fully valid residency permit and apply for citizenship after six years. It also provides a 10-year tax abatement on worldwide income.
In February of 2020, the Portuguese Parliament approved a budget that included new laws that would exclude properties purchased in the country’s two major cities, Lisbon and Oporto, starting in 2021. To get their Golden Visas, investors would need to purchase in lower-density zones.
There is more to these Portuguese programmes, including a series of policies, laws and tax benefits meant to attract international tech entrepreneurs to set up their European hub in the country.
Overall, this programme has been incredibly successful, having attracted more than € 5,1 billion in investment since its inception for a total of 8,736 residency permits - 52% of which were granted to Chinese applicants.
