Golden visas for wealthy foreigners are disappearing from Europe. Golden visas are a system that grants residence permits to foreigners on the condition that they make investments such as purchasing real estate of a certain amount or more. Spain and other countries, which were struggling due to the financial crisis in early 2010, introduced them as a means to attract foreign capital.
However, the era of golden visas has come to an end as there have been constant criticisms that golden visas encourage real estate speculation and encourage housing prices to rise, and there have been calls for strengthening foreign residency requirements after Russia’s invasion of Ukraine (February 2022).
According to Reuters in the U.K., Spanish Prime Minister Pedro Sanchez said on the 8th (local time) that he will “abolish the golden visa system.” Since 2013, Spain has granted residential permits to foreigners who meet requirements such as △ at least 500,000 euros (about 735.84 million won) in real estate investment △ at least 1 million euros (about 1.47 billion won) in bank deposits △ at least 2 million euros (about 2.943.34 billion won) in government bonds. Foreigners who receive a golden visa can receive permanent residency five years after living in Spain and citizenship 10 years later.
However, as real estate prices have risen sharply in recent years, golden visas have been blamed for encouraging this. According to the Spanish government, approximately 5,000 golden visas were issued by November 2022, most of them related to the purchase of homes. Housing purchases have flocked to major cities such as Barcelona, Madrid, and Malaga, as well as tourist destinations. “We need to take the necessary measures to ensure that housing becomes a civil right, not a means of speculation,” Sanchez said. The Financial Times said, “Economists do not see golden visas as the main cause of the rise in real estate prices, but Sanchez has been under political pressure since last year to stop the golden visa system.”
Portugal also abolished the golden visa system, which was introduced in 2012, in December last year for a similar reason. Like Spain, Portugal has granted residence permits to foreigners who purchase at least 500,000 euros in real estate. Ireland ended the golden visa system introduced in February last year. The plan calls for granting residence permits if foreigners with a net worth of at least 2 million euros invest at least 1 million euros or donate at least 500,000 euros over three years.
Greece, which introduced a golden visa in 2013, has significantly strengthened its issuance standards. Originally, residential permits were issued to foreigners who purchase at least 250,000 euros in real estate, but in February, this standard more than tripled to 800,000 euros.
Another reason why European countries abolished their golden visas one after another was the growing anxiety over security following Russia’s invasion of Ukraine. The European Commission has warned member states to “reconsider the mechanism by which they receive money and grant residence permits” since 2022. This raised concerns that foreigners who acquired residence permits without much monitoring or supervision might pose a security threat to the European region. Many of Europe’s golden visas were issued to Chinese and Russians.
Concerns have also been raised that golden visas could be linked to crimes such as tax evasion, terrorist financing, and corruption. European Commission President Ursula von der Leyen has stressed that “European values are not for sale.”
JULIE KIM
US ASIA JOURNAL
