La Vida offers a choice of several golden visa programmes for investment in residency and citizenship….
Portugal has proved to be the most popular destination in Europe for investors seeking a golden visa. Full residency is granted but there is no requirement to reside. Citizenship can be applied for after six years.
The Portuguese golden visa is a central feature of the government’s drive for international investment. With the country returning to growth the real estate market offers exciting prospects for the years ahead.
La Vida offers a choice of several golden visa programmes for investment in residency and citizenship….
Cyprus offers citizenship for investment levels of €2.0 million in real estate which is one of the big attractions of this programme. A Cypriot passport allows freedom to travel, study, work or live throughout the European Union.
Cyprus also offers residency through investment of just €300,000 allowing full family qualification. The investor visa is flexible with no requirement to live in the country.
La Vida offers a choice of several golden visa programmes for investment in residency and citizenship….
Spain is a firm favourite for many clients considering real estate investment to obtain a golden visa. One of the larger economies in Europe offering an investor visa programme.
Invest from €500,000 in real estate to gain the Spanish golden visa. This provides a flexible residency option. Permanent residency and citizenship can be applied for at a later stage subject to certain stipulations.
Greece offers a residency visa through property investment but eventual citizenship is not available to foreigners. Greece is a member of the EU Schengen visa zone and has no minimum stay requirement.
Prospective investors need to carefully consider the status of the economy in Greece, the real estate market and related property taxes. Greece offers a higher risk investment than other European nations.
Malta offers an Individual Investor Program which is appropriate for our very high net worth clients. In addition to committing to a residence in Malta for five years the scheme requires investment in government approved funds and instruments.
The Malta visa scheme leads to citizenship within one year for suitable applicants, a passport from an EU country and hence the freedom to live anywhere within the EU. The total investment required is typically in excess of €1.2 million.
The citizenship by investment programme for Grenada is one of the newest programmes available to investors. The Grenada passport offers visa-free travel to over 70 countries including the UK.
Grenada offers a low investment threshold. Applicants need invest just $250,000 in a government approved real estate project and maintain the investment for at least 4 years.
The citizenship by investment programme for Antigua and Barbuda provides a second passport to investors offering visa-free travel to over 100 countries including the UK, EU Schengen zone and Canada.
There are several options for investment to gaining citizenship in Antigua including real estate investment of a minimum $400,000.
The St. Kitts & Nevis Citizenship by Investment Program is the oldest of its kind in the world. Established in 1984 the program grants citizenship through real estate investment to qualified applicants.
The government requires investment of $400,000 plus related government and due diligence fees. St Kitts offer visa free travel to over 120 countries. An ideal choice for a second passport.
La Vida has witnessed high demand from South America in the last two years in particular from Brazil and Argentina and Europe has proven popular as a destination.
Both Spain and Portugal offer residency visa programmes through investment of €500,000 in real estate. With the Spanish and Portuguese languages each is popular with Argentinian and Brazilian residents. Acceleration to permanent residency and citizenship is also possible due to the historical connections. Both programmes allow the freedom of travel within the EU Schengen visa zone but they are also highly desirable location for South Americans to relocate.
Closer to home there are several options in the Caribbean. Five countries now offer a second passport for investments of typically between $400,000 – $600,000 all costs considered. Holders of these passports (St Kitts, Antigua and Barbuda, Dominica, Grenada and St. Lucia) have access to the EU Schengen zone for up to 3 months. Likewise travel to the UK is straightforward on such a passport.
Investors need to carefully weigh the costs and benefits of each programme. La Vida can advise on this and provide a selection of real estate investment options for investors and their families to qualify.
Spanish property prices appear to be rising and could climb by 12% in 2016 according to an article published in the Spanish daily newspaper El Mundo recently. Barcelona University professor and real estate expert Gonzalo Bernardos explains the reasons behind rising prices and why the market could rise as much as 50% over the next four years.
Currently, the residential market in Spain is expanding. In the second quarter of 2015 the annual increase of housing prices was 4% and the level of transactions rose by 13.9%. The first signs of a rising market were observed in the main cities in late 2014. However, “nobody should expect the formation of a new bubble”, as all the main variables including market price, housing starts and percentage of household income devoted to making mortgage payments are far from the level they reached in 2006 and 2007.
The main reasons for the rise in price of housing are:
Once adjusted for inflation, most are worth less than half that in 2007 and about the same as in 2002. Bernardos claims that at present buying a well located home is a great opportunity, and that in 2016 prices will rise by 12%.
The willingness of banks to grant more mortgages. Today, banks have plenty of liquidity and are earning low margins on lending. Mortgage loans are attractive to the banks. The loans are less risky and lead to cross selling of products. Banks are keen to lend again in the property market and easier credit will fuel prices. The number of residential mortgages issued climbed by 28.5% in the year to July 2015.
With low returns on deposits and volatile equity markets many risk-averse investors are turning to the real estate market. Bernardos says housing offers a mix of high expected capital gains (up to 50% in what remains of this decade), and rental yields of around 3.5%, better than savings accounts.
Many households in Spain sat out the crisis in rented accommodation, waiting for house prices to bottom out, for the economy to improve and mortgages to get cheaper. With those conditions now in place and the Spanish economy growing at an annual 3.1%, Spanish families are jumping back into the market, unleashing pent up demand.
In short, Bernardos says a new stage in the housing market has begun in Spain. However, nothing will be the same as the boom and bust of recent years. All said, this is encouraging news for investors looking to buy for the Spanish Golden Visa.
In 2015 we have seen exceptional growth in demand for golden visas from around the globe. The Middle East, Asia and Africa continue to show strong growth with countries such as India, Pakistan, China, South Africa, Nigeria and the UAE all demonstrating considerable interest in the various programmes on offer.
La Vida has dealt with over 5,000 enquiries this year from around the globe. Our team of advisors has been busy helping many clients find the right real estate investment to obtain their residency and citizenship. Our team is often visiting countries where local meetings can take place. But with demand so widespread it is not possible to visit each country frequently. However we are always available to meet with clients in our head office in London and most of our clients simply liaise by phone/email/skype with our consultants before coming out to meet our representatives in the country of interest for their intended residency visa.
A revision of rules for the golden visa in Portugal has left many potential applicants confused as to the rules and a great deal of misleading literature posted on the web suggesting the Portuguese golden visa limit has been reduced.
The qualifying real estate investment level for the golden visa in Portugal is €500,000. Earlier this summer the Portuguese government introduced a new investment level of €350,000 for certain categories of real estate.
The law states the following: “Acquisition of immovable assets, the construction of which has been completed, at least, 30 years ago or located in an area of urban regeneration and execution of refurbishment works in the acquired immovable assets…equal to or above 350 thousand euros;”
The point here is that even though this new option applies, it only applies to property that is over 30 years old or located in an urban regeneration area. It involves the execution of refurbishment works. This is an important aspect.
To qualify for the golden visa under such an investment requires the necessary permissions for renovation work on the building. Such permissions and payments to contractors all need to be done legally and of course within the tax structure so the necessary paperwork, proofs and payments are fully in order. To undertake such a project would mean employing project managers and the necessary architects. The applicant would have to have all the licences in place prior to any application being submitted which will of course delay any application for the visa. To mitigate any risk it is vital to ensure that any such property would qualify within this category. Clients would need to ensure they build sufficient time into their schedule to take care of all these additional aspects.
Clients visiting to invest €500,000 in a location such as Lisbon can usually complete the necessary tasks within a few days, accompanied by ourselves and our lawyers in a methodical, established and time proven manner. The alternative investment of €350,000 will require far more time and hands on management. Golden Visa applicants should be wary of companies offering such management for a fee and in particular remain conscious of the scope for overpaying for assets requiring reconstruction without the necessary independent professional advice from architects and surveyors. For any international client not residing in Portugal and trying to manage from a distance it can be problematic, time consuming and expensive.
The €350,000 is reduced by a further 20% to €280,000 for renovation in low density, less developed areas of the country. This naturally does not apply to the cities or the more populated coastal regions creating issues for any future rental income potential.
The Cyprus economy has been seriously boosted by the residence and citizenship programmes according to an an announcement last week by Mr Socrates Hasikos, Interior Minister of Cyprus.
On the one hand, this is a great achievement, on the other – the economy has received enough funds (more than €2 billion) and the pressure from the European Union is becoming hard. In particular, the Minister said: “The Republic of Cyprus is under pressure to stop this policy ….”.
It is well known that the European Union has been exerting hard pressure on Cyprus to either stop or amend the criteria since this is the first time that a passport of a European member-state could be obtained on such favorable conditions. Similar pressure was applied to Malta which led to changes in its programme.
So far, Cyprus has not made any changes to the policy. Quite the contrary. It introduced a “Collective scheme” in March 2014, which allowed the required investment threshold to be halved from €5 million to €2.5 million.
In particular, a representative of the European Commission, Ms Jourova has recently commented:
“As regards national schemes for naturalization of investors (investor citizenship schemes), the Commission recalls that it is for each Member State to lay down the conditions for the acquisition and loss of its nationality. As confirmed in settled case-law of the Court of Justice of the EU, when exercising their competence in the area of nationality, Member States must have due regard to Union law. “The Commission has stressed that it expects Member States to use their prerogatives to award citizenship in a spirit of sincere cooperation with the other Member States and the EU. Account should be taken of the norms and obligations by which they are bound under international law and the criteria upon which they traditionally build their nationality laws.
These criteria require in particular the existence of a genuine link between the applicant for naturalization and the country or its people. Investor citizenship schemes providing for the possibility to obtain naturalization in return for investment alone do not meet the minimum requirement of a genuine link to the country. “The Commission is analyzing investor citizenship schemes in all Member States concerned. At this stage, it appears that there is only one member state granting naturalization in return for investment alone, namely Cyprus. “The Commission is currently pursuing a dialogue with the Cypriot authorities on this issue.”
We expect therefore that with time the programme can be amended and additional compulsory requirements to obtain Cyprus citizenship introduced as happened in Malta for instance.
The Cyprus Citizenship by Investment programme is currently the “Rolls Royce” of investor citizenship programmes in Europe. It is the only country through which it is possible to get an immediate (2-3 months) European passport by investment. However it is not forever in its present form and potential applicants need to act soon to take advantage while the door remains open.
For those who would like to apply for Cyprus passport the time has come to act briskly and decisively. So far all the amenities of the programme are still available without any amendment. Passports are issued on a weekly basis to those who have already applied and thus enjoy very favorable conditions that Cyprus offers.
Further to the above we are now hearing through several sources that Cyprus, under pressure from the EU, will introduce a one year residency rule prior to granting citizenship. This is likely to be introduced at the end of 2015. Such an introduction will restrict certain investors if they have to spend time residing or building ties with the country prior to the issuing of a passport. It will not affect passports issued before that date.
For further information please contact us online or call our European head office on +44 207 060 1475.
It is important for any prospective investors to take careful professional advice on the programmes available before committing to an investment. There are many programmes on the market from differing countries, but not all of these lead to citizenship through investment.
The likes of Hungary, Greece and Spain are difficult or unlikely, sometimes requiring residence in the country. Portugal is far easier and Cyprus can be gained immediately with the right investment.
So what is citizenship and what benefits does it bring? Citizenship of any particular country within the European Union means a passport and importantly citizenship of the EU. So for example, if you gain citizenship in Portugal through real estate investment then you become an EU citizen. Similarly if you gain citizenship in Bulgaria through investment in government bonds you can also gain citizenship of the EU even though Bulgaria is outside the Euro and Schengen visa zone.
Every person holding the nationality of an EU country is automatically a citizen of the EU. This allows that person to move freely within the EU. To work, study and live wherever they wish within the European Union countries.
It is important to draw the distinction between the EU countries (there are 28) and the Schengen visa countries (there are 26). There are 22 EU countries participating in the Schengen visa zone and there are an additional 4 countries not part of the EU.
Residency in the Schengen visa countries allows freedom of travel throughout the Schengen area. But citizenship of an EU country provides the right to live and work within the EU countries. For example the United Kingdom and Ireland are EU countries, but not part of the Schengen visa zone.
Whichever country an investor targets for citizenship, there are sometimes faster, cheaper and easier options to gain permanent residency allowing them to live, work and study in that country by gaining entry through an alternative EU country.
It is possible to achieve citizenship through investment in real estate in Spain but the investor will need to live in Spain for 10 years before applying.
Citizenship can be applied for in Portugal six years after investment of a minimum €500,000 in real estate.
Citizenship is available in Cyprus within 2 – 3 months on investing a minimum €2.5 million in real estate.
Malta has an investment visa programme with a comination of investment and contribution totalling around €1.2 million with citizenship taking approximately 12 months.
Citizenship in Greece through its real estate investment programme will be possible following changes to legislation (2015).
Changes to legislation in Hungary mean the investor visa bond programme could lead to citizenship after 5 years rather than the current 8 years. (2015)
The investment bond programme in Bulgaria can lead to fast track citizenship by doubling the bond investment from €512,000 to €1,024,000.
For reference the EU countries are: Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the UK.
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Lisbon and Porto the two largest cities in Portugal have seen a surge in sales of residential property since the introduction of the golden visa programme and the favourable tax regime for non-habitual residents. Research by Cushman and Wakefield shows a total of 1,362 homes were sold in Lisbon and 290 in Porto in the first quarter of 2014 a rise of 60% year on year for Lisbon and 30% for Porto. Average prices per sq. metre rose 18% in Lisbon and 8% in Porto.
With 1,775 golden visas issued in the first two years of the programme it is clear that demand of this magnitude from international investors has the ability to move the market. The research is consistent with our observations of rising prices throughout 2014 due to higher demand particularly at the €500,000 and above price level.
The outlook for 2015 is described as “positive” by Cushman and Wakefield. The pyschological factors affecting the market since the credit crisis have diminished and there are signs of improved lending conditions from the banks.
Two countries in Europe, Bulgaria and Hungary offer residency visas through investment in government bonds. By investing in these bonds in either country investors are free to live in the countries with permanent residency.
The EU consists of 28 states and both Hungary and Bulgaria are full members of the European Union.
Hungary is a member of the Schengen visa zone of 26 countries in Europe that have opened their borders to passport free travel between their borders.
Investment in Hungarian bonds grants the freedom to live there but there is no requirement to reside. This is a key benefit for residency visa investors who want the freedom to travel and the security of a second home without the necessity to relocate family, become tax resident and potentially lose existing citizenship. With Hungary one of the key benefits is freedom of travel in the EU Schengen zone.
With Bulgaria the most attractive benefit is extending the investment in order to qualify for fast track citizenship and a second passport. Bulgaria is not a member of the Schengen area but is legally obliged and wishes to join at some future point.
However, as Bulgaria is a member of the EU, citizenship of Bulgaria means citizenship of the European Union. That then allows the freedom to live, work, travel or study anywhere within the EU. The EU includes countries such as the UK and Ireland that are not part of the Schengen visa zone.
Investment in the bonds in either country means zero interest return but the bonds can be realised for the full value at maturity. They are effectively an interest free loan to the government of the respective country. However with the costs and taxes associated with real estate investment these could be an alternative for many investors.
It is also possible to finance the bonds in both cases which means a far reduced cost with the same benefits of residency and citizenship. The bonds then have no redemption value but the investment is significantly reduced.
Requirements can change. Contact us for further details on these bond programmes.
Investors looking to buy into a visa programme in Europe are encouraged to do so sooner rather than later. After the credit crisis governments are keen to encourage investment from high net worth individuals from overseas. In exchange they grant residency often with complete freedom of movement and no requirement to live and become tax resident. Such residency can ultimately lead to citizenship and a second passport.
However some programs have been subject to change. Cyprus increased its investment for citizenship limit from €2.0 million to €2.5 million recently and Hungary is expected to increase its investment limit in government bonds from €250,000 to €300,000 soon. Latvia doubled its real estate investment limit in April 2014. Changes will not affect those families who have already invested in the programmes.
Portuguese Minister of Tourism Adolfo Mesquita Nunes confirmed recently at a conference in London attended by La Vida that there would be no change to the minimum investment of €500,000 for the golden visa in Portugal.
Below is a brief summary of investor visa limits for each country:
Invest €500,000 in real estate plus related costs and taxes to gain residency and eventual citizenship through application. After six years investors and their families can apply for citizenship in Portugal.
Invest €500,000 in Spain to gain residency and apply for permanent residency after five years. Investors have to live in Spain during that time. and can later apply for citizenship after ten years.
Investors can gain permanent residency in Greece through investing €250,000 in real estate. Greece offers the lowest investment level in Europe for the golden visa.
Investors can place €300,000 in government bonds in Hungary for permanent residency. The bonds pay zero interest and are refunded to the investor after five years. However the investment is guaranteed.
Investors hae a tiered option in Bulgaria. Invest €512,000 into government bonds in Bulgaria to gain permanent residency as a first stage. Investors can increase this to €1,024,000 to then gain fast track citizenship in Bulgaria.
Investment in Malta can gain permanent residency through the Maltese investment programme. Residency and citizenship can be achieved in Malta through a series on investments and contributions. This requires a total investment of around €1.2 million.
Cyprus has two levels of investor visa. One for permanent residency and one for citizenship. Permanent residency can be obtained in Cyprus through investing €300,000 in real estate. Applicants can apply for citizenship by increasing this to €3 million.