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Spain intends to cancel what is known as the “Golden Visa” program, which grants quick permanent residence to citizens from outside the European Union in exchange for large financial investments, thus joining a number of countries that have abandoned the program.
Spanish Prime Minister Pedro Sanchez said that the move aims to “ensure that housing is a right and not an object subject to commercial speculation,” adding that “the residential real estate market is subject to enormous pressure and that finding housing at a reasonable price has become impossible for people who live and work in places more than the demand.”
Many investors see the program as an opportunity to start a new life somewhere new, or to escape political, social or economic risks in their country of origin. But anti-corruption activists and politicians warn that criminals are exploiting the system for their own interests and that rising property prices are making the host country unaffordable to local residents.
What is a “Golden Visa” or “Golden Passport”?
“Golden visa” programs offer wealthy foreigners the right to live and work in another country in exchange for a significant investment.
The financial amounts required to obtain a golden visa range from investing $100,000 in real estate in Panama to investing $21.4 million in the form of a deposit in a financial institution based in Luxembourg.
Then there are “golden passport” programs, through which wealthy individuals gain all the rights and freedoms of citizens, including the right to work and vote in the country in which they apply.
Which destinations are popular?
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There are about 60 countries that offer golden visas, says Dr Christine Surak, associate professor of political sociology at the London School of Economics and author of The Golden Passport: The Global Mobility of Millionaires.
She adds that about 20 countries offer legal citizenship through investment, and half of those countries receive more than 100 applicants per year.
Dr. Surak told the BBC, “Türkiye is the largest seller of citizenship.” Applications for the Turkish Golden Passport Program account for about half of annual global sales of citizenship, according to Dr. Surak’s research in this area.
She says the largest share of residencies granted under investment programs are offered in regions of the Global South, with Malaysia and the United Arab Emirates being particularly popular destinations.
The countries of Saint Kitts, Dominica, Vanuatu, Grenada, Antigua and Malta are among the most prominent exporters of golden passports.
The European Union is considered one of the most desirable destinations for those seeking a golden visa, as the right to reside and work in one of the European Union member states allows visa-free movement between countries in the Schengen area.
There were 14 EU countries offering golden visas in 2020. Greece, Latvia, Portugal and Spain accounted for 70 percent of approvals in the European bloc. But many of these countries have moved to place restrictions on these programs.
In 2022, the British government ended a program that allows wealthy foreign citizens to settle in the country if they bring assets and property with them.
The following year, Ireland abolished its Golden Visa, while Portugal amended its version of the visa, no longer allowing residency for real estate purchases but continuing to grant visas through capital transfers in the form of funds and investments in research activities.
Why are these visas required?
Golden visas and passports are popular among the wealthy, seeking better business opportunities, a better lifestyle, better education or better health services.
“With the uncertainty in the world today, the need for a second residency or passport has never been stronger,” Lizzie Edwards, a marketing manager at a UK-based company called La Vida Golden Visas, told the Turkish Service. In an interview with the BBC last year.
“Investor motivations vary, but typical reasons for applying include security purposes, expanding visa-free travel, and promoting global opportunities, including education and business prospects,” she added.
How to get a golden visa or golden passport?
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Regulations depend on the destination and type of investment. For example, Türkiye offers a golden passport to foreigners who buy a property worth 400,000 or more.
Some other countries, such as Luxembourg, offer various paths to obtaining a golden visa, and options range from investing at least $536,000 in a company based in Luxembourg, to depositing $21.4 million in a financial institution.
Many countries also accept donations or investment in research and development activities.
One of the most important motives for governments in introducing such programs is to allow the movement of capital into the country and strengthen the economy.
According to a research paper prepared by Dr. Christine Surak and Yusuke Tsuzuki, published in the Journal of Ethnic and Migration Studies, 14.4 percent of foreign direct investments in Portugal came through golden visas in the period between 2013 and 2019. The percentage was 12.2 percent for Latvia and more than 7 percent in 100 for Greece.
Why are these programs controversial?
Activists warn of two main concerns about these programs: corruption and igniting a housing crisis for local residents.
Transparency International, a non-governmental organization that works to combat corruption in more than 100 countries, warns that programs in the European Union “are not about real investment or immigration – but about serving corrupt interests.”
According to Eka Rustmashvili, an activist with Transparency International, countries running such programs have due diligence measures in place, but they do not always work as intended.
She told the BBC: “There have been reported cases of people fleeing the authorities applying for golden visas or golden passports immediately before or after their involvement in corruption or fraud schemes was exposed.”
“It is clear that they view this as a kind of insurance policy against any law enforcement action in their countries,” she added.
There was also criticism raised by various bodies in the European Union. In 2022, the European Parliament’s Committee for Civil Liberties, Justice and Home Affairs voted in favor of a ban on the issuance of golden passports and asked third countries with visa-free entry into the EU to halt their golden passport programmes.
Dr. Christine Surak says that although it is possible to launder money through these programs, “there are easier and cheaper alternatives as well.”
“You can do the same thing with a student visa, which is probably much cheaper,” she adds. “The same goes for a business visa. It’s not unique to these programs.”
An Organized Crime and Corruption Reporting Project investigation published in October 2023 revealed that a former Libyan colonel accused of war crimes and a Turkish businessman sentenced to prison in Turkey were able to purchase a Dominican passport through these programs.
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In 2023, a review of golden visas in the UK, commissioned by the Home Office, concluded that “a small number of foreign investors were at high risk” of having links to corruption or organized crime.
The second main concern, which activists highlighted, is high residential real estate prices. Although many countries offer a range of investments, the majority of applicants choose to purchase real estate, which pushes real estate prices higher.
But the study conducted by Dr. Christine Surak indicates that this has had a limited impact in most countries. For example, Spain accepts around 2,000 applications per year, highlighting that 2,000 real estate transactions in a country of 48 million people is insignificant.
But real estate purchases are often concentrated in desirable areas, and certain cities and neighborhoods popular with foreigners may be much more affected than others.
The coastal city of Antalya in southern Türkiye is one of those cities. The city of Antalya, traditionally popular with Russian and Ukrainian tourists, became a permanent refuge after the outbreak of war in Ukraine. City residents complain that the increase in demand for real estate has led to higher prices.
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