The Municipality of Lisbon concentrated 59.1% of total real estate purchases entitled to a “Golden Visa” this year, a distribution that increases to 75.2% if the analysis takes into consideration the greater metropolitan area. In the first nine months of this year, 993 residence permits for investment (ARI) were granted, better known as “Golden Visas”, which represented the entry of €540 million of foreign capital, 10.2% less when compared to the same period in 2019.
The Government wants to end the granting of Golden Visas for third-country nationals purchasing real estate in the greater metropolitan areas of Lisbon and Oporto. In the seven years since its inception, the plan has barely touched the interior districts of the country. Historically, the concession of Golden Visas has accounted for just 3% of applications to the programme.
In November of 2019, total investments from Residence Permits for Investment Activities (ARI) tallied €37 million, a decrease of 52% over the same month of 2018 (€77.1 million). Comparing to October, when new investments totalled €60 million, the decline was 38%. In November, 64 Golden Visas were issued, of which 61 were for property purchases and three for capital transfer. In the first 11 months of 2019, investments have totalled €698 million, down 6% from the same period a year earlier. By nationality, China continued to lead in the number of Golden Visas issued, followed by Brazil, Turkey, South Africa and Russia.
Only Greece and Latvia have more advantageous Golden Visa schemes than Portugal, requiring an investment of just €250,000 for foreigners wishing to settle in their territories. Portugal has maintained the €500,000 threshold since the creation of the programme in 2012, which is technically referred to as “The Residence Permit for Investment Activity”.
Over the past seven years, the state has brought in more than 167 million Euros with the issuance and renewal of Golden Visas. The fees charged by “SEF” (“Serviço de Estrangeiros e Fronteiras”) are the result of more than 19,000 visas issued and over 17,000 renewals, a retention rate of almost 90% of investors and households.
A special committee of the European Parliament urges the creation of a European Police Force and a European Regulator dedicated to money laundering. The proposals of the Special Committee on Financial Crimes and Tax Evasion (TAX3) form part of a report with various recommendations, including the abolition of “Golden Visas”.
Since inception, more than 19,000 new “golden” residents have been approved for Golden Visas in Portugal. Only 387 (2 out of every 100 applications) were turned down despite warnings from the UN and the European Commission. Allegations abound that these Portuguese entry visas facilitate money laundering and tax evasion as well as jeopardize the security of the EU. The European Parliament will vote on a proposal to abolish such schemes throughout the member states.
While the European Commission (EC) defends the end of “Golden Visas”, Portugal contends that the programme will go on. In recent years, the scheme has served as a gateway for millions of euros into the national real estate market in exchange for permanent residency visas for high net worth foreign investors. In light of the controversy, the government has announced plans to alter legislation to improve transparency as called for by the European Parliament.
The Global Anti-Corruption Consortium recently presented a report revealing important data on the obscure world of Golden Visas. Four EU countries sell citizenship, twelve offer permanent residency permits. Golden Visas have lead to over 25 billion euros invested in the European Union over the last decade.
Critics say that the European Union should simply ban the practice. The sale of Golden Visas poses a serious security risk for the European Union in general and the Schengen system in particular. “It is a prostitution of the Schengen system, giving a fast track to rich migrants who are often kleptocrats, criminals and money launderers.”
Through Golden Visas, more than 100 thousand people have already obtained authorisation for permanent residency or citizenship in throughout member states. Portugal is one of the EU countries that has benefited most from selling Golden Visas, averaging €670,000,000 each year since inception.
Chinese investment in Golden Visas fell by 24% between January and August year-on-year to €194.3 million. During the same period, Turkish investments more than doubled to €69.4 million. Brazilians accounted for €86.7 million, 41.8% less than a year earlier. South Africa declined 47% to €22.8 million while Russia also fell to €20.3 million, a reduction of 202%. In cumulative terms, Golden Visas have yielded almost four billion Euros since inception, mostly in real estate.