For years, those with the means could basically buy themselves access to various European countries. But no longer.
This week, two countries ended their “golden visa” programs, as they’ve become known. Both Ireland and Portugal will no longer allow millionaires to invest in their nations in exchange for visas, Bloomberg reported on Friday. The move comes as various governments examine the “appropriateness” of such policies, and after Britain ended its similar program a year ago.
“There is an interesting paradox countries are grappling with—on the one hand, they want investment,” Will Harvey, a professor at the University of Bristol, told Bloomberg. “The flip side of it is a big political trend around the optics of very wealthy investors from overseas having a privileged status at a time when there are a lot of challenges for large swathes of society.”
Golden visas became a thing after the 2008 financial crisis, with countries like Portugal, Ireland, Greece and Spain offering them as a way to attract investment. Since then, they’ve brought in billions of dollars, as millionaires sought easier travel and cushy retirements—sometimes even citizenship.
High-net-worth individuals flocked to Portugal, for example. There, an estimated net inflow of 1,300 millionaires occurred last year, according to data from Henley & Partners and New World Wealth. And Chinese investors made up about half of the 11,628 residency permits granted over the years. To obtain that golden visa in Portugal, a person had to invest 350,000 euros ($375,000) in Portuguese real estate and create 10 jobs or pay 1.5 million euros ($1.6 million).
Yet these programs don’t come without their detractors. Opponents have argued that they drive up real estate prices, making buying a home unattainable for locals with lesser means. In fact, the prime minister of Portugal cited housing issues in the country’s decision to end its golden visa program.
While the demise of these programs signals a change in the way international travel and residency is handled, it’s not necessarily the complete end of the practice. Some believe that it’s simply a matter of time before it’s reintroduced in other forms. “These programs have opened and closed in many different countries for a very very long time,” Nuri Katz, the founder of a citizenship-by-investment services firm, told Bloomberg. “My guess is in Portugal they’ll reform the program, not close it permanently.”
Plus, these sorts of programs have expanded well beyond Europe, to places like the Caribbean and Australia. So wealthy investors looking to land elsewhere still have many far-flung locales to choose from.
Source : Robb Report
