Golden Visa: investment residence as a global phenomenon
Citizenship and residency for investment have left their mark all over the world. In this article we address their impact.
By Viviana Echeverria
Published in Breaking news
In the Caribbean, citizenship is an industry that, in recent years, has been growing extraordinarily. An idea that was born in the Federation of St. Kitts and Nevis, it has become a global phenomenon that has spread to every corner of the planet, including the Middle East, Europe, Asia and even Oceania.
While it is true that part of this growth has its origins in the economic crisis of 2018, after which countries such as Bulgaria, Cambodia, Malta and Cyprus launched or renewed the granting of their citizenship in exchange for investment, many subsequent launches, with similar objectives, may have their antecedents in the following aspects:
The need for countries to diversify their economies.
Stimulating foreign direct investment.
Attracting successful entrepreneurs to your borders.
To give you an idea of the impact of the "Golden Visa", 5 new Citizenship by Investment Programmes have been launched in the last 4 years alone. These are:
Montenegro's Citizenship by Investment Programme (2019),
Jordan's Citizenship by Investment Programme (2018),
Turkey's Citizenship by Investment Programme (2017),
Vanuatu Development Support Programme (2017),
St. Lucia's Citizenship by Investment Programme (2016).
It should be noted that some of the new programmes mentioned are currently among the most popular in the world.
For example, Turkey's Citizenship by Investment Programme. The Turkish Government recently revealed that 10,493 applications had already been approved by May 2020. From this figure, family members who were able to apply jointly with the main applicant must be excluded, but from the 10,493 applications 4,000 were granted Turkish citizenship in the period March-May 2020!
We will certainly agree that the figures for Turkey are impressive, given the short time span, right?
Well... another success story is the Vanuatu Citizenship by Investment Programme.
In the particular case of Vanuatu, its success is associated with the high number of Chinese citizens who have opted for its programmes. For example, in the first 6 months of 2020 alone, the twin programmes of "Vanuatu Development Support" and "Vanuatu Contribution" contributed VT 7,094.2 million (US$ 63 million), an amount that constituted 38% of the total revenue of the Government, and was 32% higher than in the same period of the previous year.
On the other hand, in Europe more than 6,000 citizenships and 100,000 residences have been granted through these mechanisms, and Spain is in the ranking of the EU member countries that accept more people through these systems. Although Spain does not have a citizenship for investment programme, we can say that from 2013 to April 2018, the country approved 24,755 residences for investors and their families.
Key to success
To date, there are 12 active citizenship investment programmes around the world.
But, the number was higher last summer, with 14 active programmes. Both Malta and Cyprus, however, have suspended their respective programmes pending a reassessment of the requirements and procedures.
It appears that the suspensions of the respective programmes of Malta and Cyprus are due to EU requirements. Its executive body has sounded the alarm in relation to the "golden visa" or express visas in 2019. The European Commission is concerned that an increasing number of member states are granting residence or citizenship in exchange for investments worth millions, without a common framework for this.
Attracting and attracting investment involves many risks, because it can lead to the granting of residency or citizenship to people linked to cases of corruption, money laundering, organised crime, among other crimes.
A large part of the success of a Citizenship by Investment Programme lies in carrying out adequate due diligence; as well as, the capacity of the country to carry out an in-depth investigation of each applicant, family members, origin of funds and sources of income.
Los programas de la zona del Caribe se ha mantenido en la vanguardia al respecto porque han sido capaces de implementar regímenes de diligencia, de varios niveles, dentro del reglamento de sus propios programas. En dichos regímenes incluyen la comprobación de antecedentes a través de entidades gubernamentales especializadas y empresas externas e independientes. También participan y colaboran en las pesquisas organismos intergubernamentales, como Interpol y el Joint Regional Communications Centre (JRCC), los cuales reciben información de países asociados como Canadá y Reino Unido.
Caribbean area programmes have been at the forefront in this regard because they have been able to implement multilevel due diligence regimes within the regulations of their own programmes. These regimes include background checks through specialised government agencies and external and independent companies. They also participate and collaborate with intergovernmental bodies, such as Interpol and the Joint Regional Communications Centre (JRCC), which receive information from partner countries such as Canada and the United Kingdom.
It is important to note that prosecution in the Caribbean also takes the form of prohibited nationality policies, which exclude persons from countries where prosecution cannot be accurately conducted.
Now, Citizenship by Investment Programmes are certainly the most popular and largely successful form of "Golden Visa", but it is not the only one either.
Another "Golden Visa" option is the Investment Residency Programmes, and although its success pales in comparison to that achieved by the Citizenship by Investment Programmes, it is a viable option that is experiencing a significant rise in popularity.
The "Golden Visa" per residence has also shown incredible returns for its issuing countries. For example, between 2012 and August 2020, Portugal received 5,488 million Euros in investment for this concept.
For example, it is estimated that Spain generated at least EUR 711 million in 2019 alone. But... according to Global Witness and Transparency International, in their 2018 study "European getaway: inside the murky world of golden visas", they point out that in Spain alone, specifically, 976 million euros are earned annually in investments from people coming from other countries. The most numerous are Chinese citizens (7,118), Russians (4,715), Americans (4,327), Indians (3,233) and, finally, Venezuelans (3,116).
Investment Residency Programs are much more widespread in the United States, the United Kingdom, Ireland, Spain, Portugal, Greece, Italy, Australia, Singapore and Japan, to name a few.
According to the European Commission, 20 EU Member States have chosen to offer "Golden Visas", in some cases in exchange for residence, in others even citizenship.
It is estimated that Golden Visas in Europe over the last decade have raised around €25 billion in direct investment.
The "Golden Visas" have been immigration programs designed for large foreign investors.
I believe that the Citizenship and Investment Residency Programmes have left a deep mark all over the world and, with a first year of the COVID-19 pandemic behind them, countries that need new ways to stimulate their economies will be much more willing, not only to create and/or maintain their programmes, but to accelerate their protagonism.
However, in the EU context, the main problem they see is that each Member State acts according to its own criteria.
In this respect, Dimitris Avramopoulos, former European Commissioner for Migration, Home Affairs and Citizenship, said at the time: "There is a lack of information available on how these schemes are being implemented in practice and on how Member States are addressing security problems... We are not here to accuse anyone in particular, we are here to send out a very clear and strong warning signal".
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Abogada especializada en Derecho de Extranjería Español. Es el equilibrio del despacho y la piedra angular. Es una trabajadora en estado puro y gran compañera. Y… ¿sabéis qué? En sus ratos libres deja la seriedad sentada en el despacho y baila como los demás.