Investment migration, obtaining residency or citizenship through investment in a particular jurisdiction has long been a focus of international planning for wealthy individuals.
As demand for such routes continues to increase, the options, particularly in the EU, are dwindling with the recent closure of various programmes, writes Isobel Neilson, a senior manager at global immigration law firm Fragomen.
Global investment migration is a complex and everchanging landscape to navigate. Where are individuals currently looking to establish residence or citizenship and what options are available to them? Why are these ‘golden visa’ routes being shut down and are there alternatives? What lies ahead in the future of investment migration?
Residency by investment, often referred to as ‘Golden Visas’, offer applicants and their families the ability to live, work, study and access the healthcare system of the jurisdiction in question.
Residency often leads to citizenship following a period of physical residence, generally between five-10 years, provided certain conditions are met, often including local language requirements.
EU citizenship, once obtained, enables individuals to benefit from free movement, which is the ability to live and work freely in any EU member state. Citizenship by investment, by contrast, offers a more direct route to citizenship.
The coronavirus pandemic coupled with political issues in recent years, both national and geopolitical, continue to create global uncertainty which has precipitated an increase in individuals looking to establish residence or citizenship for their families in an alternative jurisdiction.
In an increasingly global and interconnected world there is a strong desire for the ability to travel and conduct business freely across multiple jurisdictions. This type of strategic residency planning can offer not only flexibility but also security by lowering exposure to regional volatility.
2022 saw the abrupt closure of the UK Tier 1 Investor route and Ireland recently followed suit with its Immigrant Investor visa. Both governments cited security concerns as a driving factor behind the decision. Portugal’s PM recently announced the planned closure of their immensely popular investor visa, in an apparent attempt to fight against price speculation in real estate.
So what options are still available?
Spain offers an investor visa with a minimum investment ranging from €250,000 to €2m (£1.78m, $2.14m), depending on the type of investment and with investment in real estate still permitted, which is attractive given how popular Spain is for holiday homes.
Italy offers an investor visa with a minimum investment of €500,000 to €2m, depending on the type of investment, real estate is not permitted.
Italy and Spain both offer attractive tax breaks to foreign investors.
Greece offers a more cost-effective investor visa with a minimum investment of €250,000 to €400,000, depending on the type of investment, real estate is still permitted.
There is no physical residence requirement to maintain the visas in any of the above three countries, however the route to citizenship in each requires seven to 10 years of full-time residence.
The tax-haven Monaco has a long-established residency by investment programme which requires a minimum cash deposit of €500,000 plus cost of property rental/purchase. Residents can benefit from favourable personal and corporate tax rules.
This status does not lead to citizenship and has a strict residency requirement to maintain the status.
Malta continues to be the only jurisdiction in the EU to offer citizenship through Investment. The programme which was re-launched in 2020 offers citizenship within 12 to 36 months based on investment into a national development fund of either €600,000 or €750,000. There is a cap of 400 main applicants per year, and a total cap of 1,500 main applicants for the programme.
Retirees
There are alternatives that may enable applicants to achieve their objectives such as residency granted on the basis of passive income geared towards retirees; these are offered in Portugal, Spain, Italy and Ireland.
These are often quicker, more cost-effective alternatives but do require the applicant and their family to commit to spending the majority of their time in the jurisdiction. Some, like Portugal’s D7, allow work while most do not.
Digital nomad visas are now available in many jurisdictions globally. They usually require employment income from outside the jurisdiction in question. These are a great example of countries adapting to the changing immigration landscape and creating an attractive offering.
The reputation of a particular jurisdiction’s investment migration programme is a critical consideration and countries will need to ensure their programmes remain subject to stringent due diligence checks to protect against the risk of being undermined by illicit practices.
Another challenge going forwards for investment migration is going to be finding a new model, moving away from passive investment primarily in real estate, to allow for much more meaningful and active investment.
Individuals who historically would obtain golden visas are not those who will be able to commit to spending substantial time anywhere, but there are many other ways for applicants to demonstrate commitment to a country; by bringing their talent and expertise, creating jobs, and making more meaningful investments into industry and infrastructure.
Austria as an example – citizenship is granted for valuable contributions to Austria with job creation a very important part of that contribution.
If investment migration is able to evolve, there will be no shortage of interest in these programmes in their new iteration.
This article was written for International Adviser by Isobel Neilson, a senior manager at global immigration law firm Fragomen.
