Spain’s Golden Visa system challenged by EU
The Golden Visa, a system involving a sped-up visa and eventually residency process in exchange for investment was one devised by countries such as Spain and Portugal in the immediate aftermath of the financial crisis. Strapped for cash and with real estate and other assets waiting to be snapped up, the countries in question thought it would be a good way to generate an inflow of capital in hard times.
The European Union was never very pleased with this kind of scheme, which seems like a low-end version of what the UK, and in particular London, has been doing for some time – i.e. catering to the world’s rich. However, now that the worst is behind us and countries such as Spain have returned to healthy growth again, the EU is keen to challenge Golden Visa structures, some believe with a view to having them done away with altogether.
In a recent report issued by the EU Commission, Golden Visas invite possible security risks as well as the influx of black money and potentially shady characters – this being so because the background checks on investors and the source of their wealth are seldom airtight. It is feared that the schemes are at least partially being used to evade tax and gain a foothold within the EU for wealthy people with dubious credentials.
Spain is not alone but remains the most popular destination
Of course, Spain isn’t the only country that maintains a Golden Visa scheme, and it is less dependent upon it than others such as Portugal, Malta, Cyprus and Bulgaria. But the country is the number one choice among those wishing to make use of the system. In exchange for an investment or property purchase of €500,000 or over, Spain offers more than a mere visa. What you get in return is, in fact, residency and a sped-up path towards citizenship.
Getting a Spanish passport is as good as getting an EU passport, so EU officials are studying the situation with alarm. The UK, Ireland, Estonia, Latvia, Lithuania, Poland, the Czech Republic, Slovakia, Romania, Italy, France, Luxembourg and the Netherlands are also drawing in significant numbers of ‘investors’ from Russia, China, India, the USA, Venezuela and the former states of the USSR, and not all exactly desirable in activity and person.
With Germany leading the way, the EU is set to challenge Golden Visas at the highest level, so they may not be around to boost investment and property sales for much longer. Fortunately, they only make up a small part of the demand for the country’s assets and lifestyle, so Spain won’t be too heavily impacted if the Golden Visas structure is indeed abandoned.
Adam Neale | February, 2019