In an increasingly globalized world, borders don’t mean what they used to. That’s certainly true with the so-called Golden Visa programs that several countries offer to foreign investors.
European countries like Portugal and Spain as well as St. Kitts and Nevis in the Caribbean are just a few of the countries offering residence-by-investment programs, in which a country extends residency in exchange for a significant real estate purchase or other business investment.
More than 40 countries all over the world, including the U.S. and Canada, offer golden visa programs. (In the U.S., the EB-5 visa program, which was launched in 1990, offers green cards in exchange for an investment of at least $500,000.)
In addition to the visas that the Golden Visa program offers, other benefits from buying in these countries can include tax breaks, educational opportunities, freedom to travel on that country’s passport and, hopefully, returns on the investments.
The strongest interest comes from people in the Middle East, Africa and Asia, said Paul Williams, head of London-based La Vida Golden Visas. “We get a large number of enquiries from countries that have security or political issues,” he said, pointing specifically to “South Africa, Turkey, Syria, Iraq to name a few.”
In exchange for opening their gates to foreigners, the countries get an infusion of cash, said Julian Walker, director of InternationalPropertyForSale.com in London, which promotes property in what it calls investment hotspots. Some countries have had foreign investment programs since the 1980s, while others, mainly in Europe, have launched them in the last few years.
Mr. Walker cites countries like Portugal and Greece, which were all “having issues” with money when they launched their residency programs. “They were very proactive in trying to get out of the situation,” he said. “And they’ve come out fighting.”
Countries that benefit most often have strong tourism bureaus, Mr. Walker added, and entice potential investors as guests first. Some countries have upped efforts to appeal to foreigners, believing that before they part with any significant sums, they will want to visit the country first.
Some countries also ask for a nonrefundable contribution to the treasury or to a national development fund, which makes strategic investments in that country’s economy, according to the International Monetary Fund. These start at $100,000. Other programs provide the option to invest in financial instruments like government securities.
Here’s a rundown of several programs around the world:
Portugal leads the way in Golden Visas with the most applications to the Residence Authorisations for Investment, its official name, per year of any country, Mr. Walker said. Most of the investment is made in the capital, Lisbon, he added. The program started “very quietly” in 2012—the first of its kind in Europe—and has accelerated since then. It’s a €500,000 (US$546,000) investment, and the program yielded €874,444,320 in 2016, up from €466,259,797 in 2015, according to the country’s Foreigners and Borders Service. That’s a total of €2.567 billion, as of the end of 2016, and close to 4,000 visas have been issued, according to the service. Investors can apply for citizenship after six years.
St. Kitts and Nevis
Launched in 1984, this Caribbean country has one of the oldest Golden Visa programs. For $250,000, investors can be on an immediate track to citizenship and are not required to spend a specific time in the country. From 2015 to 2017, revenue from the program was at about $37 million per year, according to the IMF. And the program has raised more than a $1 billion for the country since 2006-07, said Andrew Taylor, vice chairman of Henley & Partners, which helped redesigned the program during that time. As one of the first programs of its kind and as a less expensive option, the country is still a go-to for potential investors.
The Malta Individual Investment Program (MIIP) began in 2014, and that year, its economy rose by 3.8% in 2014, Mr. Taylor said. The buy-in here is high—€1.5 million (US$1.63 million)—but investors can start the citizenship application process a year after buying there. They are also asked to make other contributions to the domestic economy. “Add the €1 billion secured through direct donation to national development projects and social funds through the MIIP, and the country’s economic growth looks set to continue,” Mr. Taylor said. Malta is more expensive than other programs, but unlike some other European countries, offers citizenship after just one year.
Spain’s program is similar to Portugal’s, also requiring a €500,000 (US$546,000) investment. Launched in 2013, with significant changes in 2015, the program has helped the country recover from a declining economy and real-estate market. The luxury market was particularly hard-hit, and the country’s residence-by-investment scheme has helped right that area and spur new development. According to Lucas Fox, the Barcelona-based luxury estate agent, Spain’s economy is one of the most improved in the Eurozone. The IMF predicts Spain’s GDP is currently predicted to grow 2.5% next year. Investors can apply for citizenship after 10 years.
The newest citizenship-by-investment plan launched in 2016. For a $300,000 investment, foreigners can be on the road to citizenship on this Eastern Caribbean island. “While we have spent the last four years stabilizing and restoring our economic foundation, the Citizenship by Investment Program will provide impetus to our recovering economy to take off in the coming months,” then-Prime Minister Dr. Kenny D. Anthony said in a statement when the program was launched. Foreign investments have been stronger than expected, according to the IMF, and the government is looking to make the program more competitive—by removing the cap on applicants, as well as a requirement for investors to have at least $3 million in the bank—to continue to bolster the country’s coffers.
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