Golden visas to EU: geography, flow of demand, prices, and prospects

A golden visa to an EU country is essentially a legal residence permit in this country as well as any other country of the Union. All golden visa programs require that the foreign applicant make some kind of investment into the European economy. Who applies for European golden visas? What costs are involved? What is the flow of demand? What prospects do golden visa programs have? Researchers from the Department of Sociology, London School of Economics and Political Science (LSE) have attempted to find the answers to these and other related questions. Below please find an abridged version of their report. 

Despite the fact that Brussels keeps a close eye on all the golden visa programs administered in Europe, no empirical research had been conducted prior to the LSE studies. These studies allow comparing the existing programs along various parameters and determining the trends. The scholars have used official information, publically accessible sources, and personal interviews to arrive at the conclusions.

The price of a golden visa and the popularity of the immigration schemes

According to the LSE report, the most affordable golden visa can be found in Latvia while the Netherlands offer the most expensive one.

A number of European countries administer golden visa programs that allow foreigners to acquire the right of abode in Europe in exchange for considerable investments into certain sectors of the economy.

If you would like to obtain a golden visa to Europe, you have to make an investment into real estate or Government bonds or make a bank deposit in the host country. In every case, you also have to undergo strict due diligence procedures. The required investment amounts differ from one country to another but on average, 250,000 euros is what you will have to spend to become a legal resident in the EU. The application process is usually extended over several months. Please see the table below.

Foreign investors are welcome to apply for golden visas for their family members too, including their spouses and children and sometimes their parents. More than half of the EU countries plus Great Britain (14 countries in total) administer golden visa programs, so this practice is rather widespread on the continent. 

Reasons why European golden visas are so popular

The LSE researchers point out several main reasons why European golden visas are attractive for foreign investors. These include the following ones:

• A golden visa acts as a legal residence permit in the host country. Its holder is entitled to stay in the country (and the whole of the EU) all the year round.
• A golden visa simplifies the process of acquiring a new tax residence.
• The investments that the foreign applicant for a golden visa makes can potentially bring profits.
• A European golden visa is a strong travel document that allows visiting all EU and Schengen zone countries with ease.

The Covid-19 pandemic has revealed one more advantage that the European golden visa has. Many Chinese, Russian, and American citizens wishing to enter Europe have had to face strict barriers. European borders have been closed to foreigners over extended periods. At the same time, most EU states allow entry not only to their full citizens but to legal residents too. Thus, if you hold a golden visa you can ‘return’ to Europe even during the lockdown times, which is precious for some people without doubt.

The demand for EU golden visas is high even though their costs are substantial  

How high is the demand for European golden visas, as a matter of fact? According to the data collected by the LSE scholars, the immigration authorities of the European countries administering golden visa programs have approved approximately 40 thousand applications for legal residence from foreign nationals.

The actual number of people who have obtained residence permits is much higher, however. Investors normally file family applications for golden visas and the average family size is 2.6 people. This means that more than 100 thousand people from other countries have obtained legal residence in Europe on golden visa programs.

This is only a tiny portion of the total number of immigrants to Europe from other parts of the world (about 1 percent only). The largest number of long-term residence permits is issued to those foreigners who have work agreements with European employers, who enroll into European universities, who marry citizens of European countries, and who wish to reunite with their families.

As we can see, the golden visa is far from the most popular method of acquiring the right of abode in the EU. Nevertheless, the statistics for each individual country is different. In two most popular destinations, namely, Greece and Portugal, more than 10 percent of all residence permits are issued to foreign investors applying for the local golden visa programs.  

The table below shows the number of applications for golden visas and the amount of investments drawn per country. Please note that the timeframes are different for each country as the national golden visa programs were not all launched at the same time, of course.

Out of the fourteen European states ‘selling’ their residence permits to foreigners, very few have been as successful at this endeavor as Portugal and Greece. Countries such as Estonia, Luxembourg, and the Netherlands, for instance, have approved less than a dozen golden visa applications each. Most European countries approve less than 500 such applications per year.

There are European countries that are more popular with foreign investors and those that are less popular. Portugal, Spain, Greece, and Latvia taken together account for 70 percent of the total number of approved applications for golden visas. These four countries have also received nearly 60 percent of the total revenues in the form of investments.

The European golden visa programs attract 3 billion euros per year as investments in the local economy. The most popular countries (Portugal, Spain, and Greece) annually attract 750 million of this amount.

Where do foreign applicants for European golden visas come from?

What are the nationalities of the golden visa applicants? Half of them are citizens of China. Around a quarter of them are Russians. The number of wealthy people in both countries is growing while the political regimes remain rather oppressive. A combination of these two factors can probably serve as an explanation of why the Chinese and Russians immigrate to Europe in large numbers.

In addition to the two countries mentioned above, citizens of the following national states actively invest in European golden visas: Brazil, Turkey, Ukraine, the South-African Republic, Iran, Egypt, Lebanon, and Iraq. The list does not look surprising as most of these countries are often referred to as ‘trouble spots’.

The information above suggests that the golden visa programs are used by investors from non-European countries as effective instruments of enhancing their freedom and hedging risks.

The graph below shows the origins of the foreign investors applying for golden visas to different European states and the EU in total.  

It has to be noted that an additional factor determining the number of applicants for golden visas from a particular non-European country is the colonial past that some European states have. In the case of Portugal, for instance, the number of successful applicants from Brazil – a former Portuguese colony – is out of proportion. Turkish citizens, in their turn, often seek legal residence in Greece, and to no surprise. Latvia used to be a Soviet republic and hence the interest to this country on the part of Russians.

European golden visas for single applicants and for families

When people choose to relocate to a foreign country, they often take their families with them. It doesn’t really matter if the family is applying for full citizenship of the country or just obtaining a golden visa. The latter brings as much freedom of movement across the continent as a second passport does. Besides, becoming full citizens of the EU with time is the ultimate goal of many applicants for European golden visas anyway.

As we have noted above, every foreign investor brings 1.6 more people with him or her on average when obtaining a golden visa to the EU and the size of the foreign investor’s family is growing. We would like to emphasize that the immigration authorities in some European countries seem to approve of this tendency as they adapt the family reunification regulations to attract a higher number of investors from abroad.  

Collectors of residence cards and foreign passports

The data obtained by the LSE researchers also suggests that there are some people in the world who are prone to building collections of foreign identification documents. The British scholars refer to them as ‘serial investor migrants’.  

These people often acquire economic citizenship of a Caribbean state such as St Kitts or Dominica, for example, and then use their new passports to apply for legal residence in Europe. We must note that this is a smart move indeed, as it may well simplify the process of obtaining a European golden visa. Besides, these people’s mobility will be improved even further.

The LSE scholars report that there are around a hundred people in the world today who have obtained multiple foreign passports. Many of them are citizens or legal residents of Great Britain, Hungary, Ireland, Latvia, Portugal, and a Caribbean country simultaneously.

It will be interesting to note that the island federation of St Kitts and Nevis boasts the largest number of the British Tier 1 visa holders per capita. At the same time, the population of the country is only 55 thousand people, which is about as many as Arsenal Stadium in London can accommodate.

The effects of the pandemic on European golden visa programs

We have yet to understand how the Covid-19 pandemic has affected the EU golden visa programs. Time will show how much of an impact this unfortunate situation has brought about to the European countries administering such programs. Some impact is quite evident, as many government agencies in charge of the golden visa programs have slowed down or suspended their operations. And this goes for more than a few countries.

Candidates for legal residence in Europe have to make personal visits to the host countries in order to submit their biometrics. Such trips have become extremely problematic these days due to the lockdowns, which has led to the formation of long queues in the most popular European destinations. (We are speaking about the applications for golden visas waiting to be processed.)

Experts expect that the pandemic coupled with Brexit is going to change the dynamics, the geography, and the demography of the European golden visa programs. The demand for European legal residence permits is likely to grow. Even the wealthiest people have felt the effects of the pandemic on their freedom of movement. It is reasonable to expect that they are going to become more active in hedging the risks and looking for ways to legally cross whichever borders they want.

The demography of the demand may also change as more investors from across the Atlantic may start looking closely at the legal residence opportunities that some European countries offer. Americans and Canadians should become more interested in these opportunities as they are witnessing the effects of the pandemic.

Great Britain, it its turn, has exited the European Union now, which makes the British passport no good for an extended stay on the continent. This means that citizens of Great Britain should also grow more interested in obtaining European golden visas. Should we expect a boom in this market? We have to wait and see.

Expert support in obtaining a European golden visa

We hope that the information provided above allows you to better understand the situation in the European golden visa market. Now you know what the countries charge for their residence permits, what countries are most popular with foreign investors, and where the investors mostly come from.

If you would like to apply for a golden visa to one of the European countries, you are welcome to apply for our professional support in the matter. InternationalWealth experts are extremely knowledgeable about all the ins and outs of every golden visa program administered in Europe and we will be happy to help you make the best choice in accordance with your personal preferences and the goals that you pursue.