Golden visas are a popular — and seemingly quick — way to emigrate. Are they too good to be true?
For anyone who’s ever had to jump through the bureaucratic hoops required for residency visas or full emigration and citizen status, the so-called golden visa is a blessing (and an insult to anyone who took the long road). Put simply, the golden visa —economic citizenship — is regarded as a sneaky way to buy one’s way to a new passport: invest enough money into a location and wait for the government there to issue new documents.
The first to experiment with the idea was Saint Kitts and Nevis, who in 1984, offered passports with real estate purchases and donation to the Caribbean nation’s Sugar Industry Diversification Fund or (now) the Sustainable Growth Fund. With the 2009 Eurozone debt crisis striking several European Union members particularly hard, a Mediterranean vacation home or pied-à-terre in Lisbon became the fast track to EU residency. Malaysia has seen a property investment boom since it created its Malaysia My Second Home programme.
But are golden visas all they claim to be? As an example, Australia requires almost AU$8 million (HK$40 million) in verifiable assets to apply for emigration on an investor visa. Other popular destinations such as the US, the UK, Canada and New Zealand demand similar amounts, the process can be slow, and grants applicants permanent residency status if approved. By comparison, a Portuguese property-related visa can be granted for an investment as little as €350,000 (HK$3 million) and demand just seven days in the country annually.
But it’s easy to mistake residency for permanent residency, which is almost always contingent upon a job, investment and an invitation to reside in a given country. “A resident’s permit allows you to live in a country for a certain period of time. But the citizenship process requires many steps, one of them is permanent residency,” explains Alice Wong, senior consultant with Paul Bernadou & Co Migration in Wan Chai. “There are four ‘statuses’ for citizenship and many people mistakenly think all they need to do is buy a house and pay some fees. But in Portugal, for example, you need to pass a language test, fulfil living requirements and so on. It’s great for a vacation home, but it’s not really immigration.”
As with many contracts there is fine print to consider and the proverbial terms and condition apply. Portugal’s residency permit needs to be renewed, and living there on the golden visa grants no social benefits, including working in the country. The same goes for Malaysia, which was initially targeted at retirees. Applicants under 50 are not allowed to take up employment, and if they do, a conventional work visa is required. “MM2H gives you a 10-year residency permit — no passport and no citizenship,” notes Wong, admitting it is the property angle and a relatively secure investment asset that appeals to some investors. Ultimately, golden visas “Do not necessarily give you a channel to a legitimate visa and citizenship.”
Nonetheless, for investors with a high tolerance for risk, the golden visa might be a good beginning, and “They are good for people who have a limited budget or need more flexibility in migration planning,” theorises Goldmax Immigration Consulting’s Margaret Chau. Residence by investment can lead to citizenship, but is subject to the criteria set down for standard immigration procedures. Portugal remains the high water mark for immigration investments right now, even as the country’s legislature debates amendments to the programme that could potentially redirect investment away from popular gateway Lisbon. The monetary commitment is relatively low, and other requirements (age, work experience, language skills) are more flexible. But as in Portugal, the law can be fickle. “These programmes are relatively new, so policy change is one of the risks that applicants need to bear,” warns Chau. “Applicants may also be concerned with the resale market of the real estate, but some developers offer a buy back option to lessen applicants’ worries. Whether [it’s] worth the potential risk depends on clients’ needs and expectations.”
Other locations that remain strong options for golden visas include Greece, Cyprus and Malta. The latter two offer citizenship tracks, but the vetting process is strict, detailed and lengthy. Regardless for €2.15 million and €1 million investors can potentially be granted a passport in seven and 12 months (respectively). The original, Saint Kitts and Nevis, still offers citizenship in up to four months for a US$150,000 (HK$1.1 million) donation or US$200,000 (HK$1.5 million) real estate purchase. For those considering residency only, the frontrunners are Malta (€400,000 for Maltese and EU residency; approximately HK$3.4 million), Greece (€250,000 in property; HK$2.1 million) and Spain (€500,000; HK$4.3 million), with permits issued in as little as three months; a Thai residence visa can be had in a month with a THB500,000 (HK$124,216) investment.
Golden visas — multi-billion dollar industries that have contributed significantly to struggling economies — can be found in almost every corner of the globe, including in Latvia, Belgium, Bulgaria, the Cayman Islands and, yes, the US; the EB-5 green card is technically a golden visa. It demands US$900,000 (HK$7 million) and up to two years to process — with rejection entirely possible.
And despite concerns over corruption and money laundering, they’re not necessarily a cheat. Wong finishes by noting one of the current darlings of golden visa investment comes from Ireland. “We deal with several European countries. The UK is very expensive — you need to invest £2 million (HK$19.9 million) over five years and not everyone can afford that,” she explains. In the current Irish programme, “You need a €400,000 to €1 million in government-approved projects, usually nursing homes or social housing. The advantage is immediate permanent residence, the processing time is short and there are several application windows each year. And applicants don’t have to invest any money until after they’re approved for the programme. It’s a great option for anyone looking towards the future.”
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