London: Europe’s golden age of golden visas appears to be ending.
For wealthy foreign investors, they offered easier travel, better lives and even breezier retirements. But the pathway to the so-called golden visas grew narrower this week as two countries popular with the jet-set crowd scrapped their programs.
The changes will make it more difficult for wealthy investors to move to Portuguese cities such as Lisbon.Credit:Istock
On February 14, Ireland’s Department of Justice said its program would cease, following a review of its “appropriateness.” Two days later, the prime minister of Portugal — whose golden visa had attracted many Americans — announced his country would halt issuance of new golden visas, amid concern that foreign buyers were driving up housing prices.
The moves came a year after Britain shut down a similar visa program for millionaire investors.
“There is an interesting paradox countries are grappling with – on the one hand, they want investment,” said Will Harvey, a leadership professor at the University of Bristol in the UK who studies reputation and skilled migration. “The flip side of it is a big political trend around the optics of very wealthy investors from overseas having a privileged status at a time when there are a lot of challenges for large swathes of society.”
Countries including Portugal, Ireland, Greece and Spain launched golden visa programs to attract foreign investment in the wake of the financial crisis. They brought in billions of dollars of foreign money and are credited with rejuvenating real estate markets in cities where demand had been low.
Over the past decade, Portugal became a magnet for high-net-worth individuals, with an estimated net inflow of 1300 millionaires in 2022, according to data from Henley & Partners and New World Wealth. Yet golden visas brought political liabilities. Opponents argued they drove up real estate prices so high that locals couldn’t afford homes.
British Home Secretary Suella Braverman, whose country is not in the EU but had a residency-by-investment program, said 10 Russians who were later placed under sanctions used the UK’s golden visa route. And politicians in Brussels argued that the programs undermined “the essence” of EU citizenship.
Investors who eventually qualified for citizenship in Portugal and Greece then had passports giving them access to other countries in the EU. This meant a Chinese national who held a golden visa in Portugal, for instance, could eventually move to and reside permanently in France or Sweden, even though those countries do not offer them.
Chinese investors dominated the program in Portugal, where they accounted for almost half of the 11,628 residency permits granted.
Britain’s “Brexit” departure from the EU, which scuttled retirement plans for many Brits, also increased the appeal of golden visas in the UK. Kerstin Buechner, co-owner of Savills’s branch in the Portuguese region of the Algarve, said that since the UK’s exit from the EU, 75 per cent of her clients have been British. Much of their additional property investment was motivated by a desire to regain European residency rights.
Nuri Katz, founder of citizenship-by-investment services firm Apex Capital Partners, says that even though countries may be announcing cuts to programs, it is likely they will come back in some way, shape or form. What is more, they have spread around the globe, from Australia to the Caribbean. While a backlash similar to that in Europe has mounted in Australia, other countries have no plans to change their policies.
“These programs have opened and closed in many different countries for a very, very long time,” he said. “My guess is in Portugal they’ll reform the program, not close it permanently.”
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