Sale of visas and citizenship: which countries trade their passports

How and why states selling their visas and passports arrange sales.

Фото: Depositphotos

Greece

According to "Merchant“, last week it became known that Greece is joining the club of states that trade their citizenship. For an industry that has been criticized by anti-corruption activists and human rights activists over the past year, this is a big victory. Still, experts say, golden passport and golden visa programs come in handy when it comes to urgent solutions to sudden economic problems. Especially if states approach this issue flexibly, providing potential buyers with discounts or other bonuses.

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The industry of "gold passports" and "golden visas" has a lot of opponents. Anti-corruption fighters note that by selling passports or residence permits to no one knows, states contribute to bribery and money laundering. The leadership of the European Union entered into disputes about the morality or legality of this type of activity, listing all the shortcomings of such programs and promising to take tough measures to rectify the situation.

Proponents of the trade in citizenship and the right to residence say that programs not only provide a stable income, but also, if necessary, quickly solve problems arising from the economic crisis or, for example, natural disaster.

So, at least in recent years, several states have acted.

Фото: Depositphotos

Cyprus

In 2013, Cyprus was on the verge of default. The European Union and other international organizations have expressed their readiness to help, but subject to the introduction of a one-time tax on all bank deposits and banking reform. The Cypriot authorities were forced to agree, having received € 10 billion from the European Union and the IMF, however, they immediately had problems. Almost a third of all deposits belonged to foreigners who turned to the authorities of their states for help.

As a solution to the problem, the Government of Cyprus offered citizenship to all those foreign investors who lost € 3 million or more as a result of the restructuring and the banking crisis. Despite the fact that in accordance with the then-valid Citizenship-for-Investment program, the Cypriot passport was worth € 5 million, it was an unconditional discount. And later they turned the discount into a price reduction and made it permanent: from 2016 of the year, any person who invested € 2,5 million in the country's economy could get Cypriot citizenship

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The result was an almost complete restoration of confidence in the so-called Cyprus Investment Program, which provides citizenship and residence permits. Moreover, as the experts of the consulting company Henley & Partners note, the country has already received more than € 5 billion in foreign direct investment, and the popularity of the program can be easily traced by the growth rate in the local real estate market (real estate investment is the most popular form of investment for obtaining citizenship) ...

According to the Department of Land Resources and Land Management of Cyprus, real estate sales in the first four months of 2019 year increased by 23% compared to the same period last year.

Фото: Depositphotos

Portugal

A similar method was chosen by the Portuguese authorities, one of the countries most affected by the so-called European debt crisis. In 2011, the budget deficit was equal to 11,2% of GDP, and Portugal had to ask the EU and IMF for financial assistance in the amount of € 78 billion. Fulfilling strict creditors' requirements, it reduced the deficit to 4,5% of GDP in 2014, but the public debt grew to 130,6% of GDP , and unemployment exceeded 17%.

The authorities tried to soften the blow by introducing their own Golden Visa program, but at first it was not very successful. As a result, in 2015, a law was passed introducing permanent discounts on obtaining a "golden" residence permit. Subject to a number of conditions (targeted investments, purchase of old real estate or real estate in specially agreed areas), the investor could save up to € 250 thousand

The result was the transformation of the Portuguese program into the most affordable such program in Europe.

Investments amounted to more than € 4,7 billion, and the real estate market boom is obvious: according to local media, real estate price growth in the first quarter of 2018 amounted to a record 28%. In the first quarter of 2019, real estate price growth (which is one of the main indicators of the popularity of the investment program) amounted to 17%.

Фото: Depositphotos

Saint Kitts and Nevis

In 2017, the state of St. Kitts and Nevis was forced to actually introduce discounts on the country's passports in connection with a natural disaster. Hurricane Irma, having severely managed the archipelago, has become the Caribbean’s most powerful hurricane in ten years. The government’s response was the creation of a special Hurricane Assistance Fund, an investment in which in the amount of $ 150 thousand was considered the basis for granting the country's citizenship to the investor. The discount compared to the citizenship program that was in effect at that time in exchange for investment was $ 100 thousand

The result was a fourfold increase in applications from potential investors, and the Citizens in Exchange for Investments program, which brought in this year $ 159 million, accounted for 67% of all non-tax revenues of the country.

Initially, the government hoped that the discount would be valid for only six months. But the success of the project forced the authorities to reconsider this decision. The Victim Assistance Fund has been transformed into the Sustainable Development Fund and is still operating. The 150 thousand bar of investments in this fund is still valid for obtaining citizenship, which is considered one of the most profitable in the world (. Pdf).

Фото: Depositphotos

Turkey

However, it is not always the decision to introduce a discount or to revise the price downward in connection with the economic or climatic crisis. Sometimes this is a consequence of the initial mistake of the government. That was the case in Turkey, which introduced its own program of "golden passports" in early 2017. The minimum investment level was set at $ 1 million (this is approximately the level of Malta, which, however, seems to be a much more stable state, and its passport is quoted much higher in the rating of the same Henley & Partners). The Turkish authorities expected to be able to receive at least $ 10 billion from the program. However, this did not happen. There was no interest in the program. The stated goal - to ensure the flow of capital into the real estate sector - was not met.

It took the Turkish government over a year and a half to see its mistake. New program parameters were published in September 2018. Parameters for all types of investments were relaxed. For real estate, the bottom line was $ 250 thousand against $ 1 million, for bank deposits and investments in the capital of Turkish companies - $ 500 thousand against $ 3 million and $ 2 million, respectively. The result was the activation of the program. According to official figures, in the middle of the summer of 2019, 981 people received citizenship of the country through the investment program, most of them were citizens of Iraq and Iran. Another 1,7 thousand applications are under consideration. The authorities do not open data on investments that new citizens brought with them, but according to the most conservative estimates, they amounted to $ 245 million in less than a year.

Фото: Depositphotos

USA

The United States also has a green card program for investors. Under the EB-5 program, individuals are eligible to apply for legal permanent residence in the United States if they invest in a business in the United States and create or (under certain circumstances) maintain 10 full-time jobs for skilled workers from the United States.

Citizenship and Immigration Services (USCIS) this summer announced changes in the context of the EB-5 visa program for immigrant investors, which was the first significant revision of the rules since 1993 of the year. The new rules will come into force in November 2019.

What will change:

Increase the minimum amount of investment. Starting from the effective date of the final set of rules, the standard minimum investment level will increase from 1 million to 1,8 million US dollars (for the first time from 1990, taking inflation into account). The rule also keeps the minimum 50% investment differential between the TEA and non-TEA zones, thereby increasing the minimum investment amount in TEA from 500 000 to 900 000 US dollars. Minimum investment amounts will be automatically adjusted for inflation every five years.

Designation of targeted employment areas (TEM). The last rule outlines the changes in the EB-5 program aimed at combating the development of areas with high unemployment (which means deliberate manipulation of the boundaries of the constituency). The identification of such areas was usually carried out through frauds in order to link the prosperous location of the project with the problem community and to obtain an average level of unemployment that meets the requirements.

Starting from the effective date of the final rule, the state will no longer identify geographic and political units with high unemployment, instead the Department of Homeland Security will make such designations, limiting the composition of the TEA based on the census blocks. This will ensure fair appointments of targeted employment zones, which will help zones more accurately adhere to the intentions of the Congress - investing in areas most in need.

Clarification of USCIS procedures for removing the convention from the green card. This clause revises the rules, which clarifies that some family members who are lawful permanent residents must independently submit documents to remove the convention from their green card. This requirement will not apply to those family members who were included in the petition of the main investor to remove the convention. The rule optimizes the decision making process.

Allowing EB-5 applicants to keep the priority date. The rule provides greater flexibility to immigrant investors who have previously approved an EB-5 application. When they need to submit a new EB-5 application, they can save the priority date of the previously approved petition with some exceptions.

At the moment, for more than 20 years of operation of this program, the most money got California, New York, Texas, Florida and Maryland.

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