The Golden Visa Growth Story is Hard to Dismiss

Our recent research shows that every single country in the EU that ran a golden visa programme continuously over the last eight years has grown faster than the eurozone average. Malta at the top, with real GDP growth of 5.46% per year compounded. Then Portugal at 2.06%, Greece at 1.83%, Spain at 1.76%. The eurozone average over the same period was 1.21%. The slimmest of the four gaps — Spain’s over the eurozone — was still 0.55 percentage points per year, every year, for eight years.

EU Cumulative GDP Growth Chart

Growth Problem

The EU has a growth problem, and it’s no secret. Over the same eight years, the United States grew by 21% in real terms. The world economy grew by 27%. The eurozone managed just 10%. That gap is the single biggest fiscal issue facing the bloc today. Growth is what funds defence, welfare, infrastructure, transition. Without it, the choices in front of European governments narrow sharply.

So here’s a quiet pattern worth noticing. Four economies, all running investment migration programmes throughout the period, all outpacing the bloc. Some by a lot, some by a little, but all four?

Is it just correlation?

Now correlation is not causation. There are many other factors at work — tourism recoveries, EU recovery funds, energy mixes, services exports, the simple arithmetic of bouncing back from a low post-2012 base. But four out of four still says something. If golden visa programmes were entirely incidental to growth, you would expect the distribution of golden visa countries above and below the eurozone average to look more random. The fact that it doesn’t is at least suggestive.

What might actually explain it?

Perhaps the programmes themselves contribute directly through qualifying investment and government fees — though the numbers there are too small to do much of the work. The cumulative direct investment from these programmes sits somewhere in the range of 0.025% to 0.25% of national GDP per year. That moves the needle, but not by ten percentage points over eight years.

Perhaps governments that run these programmes are simply the kind of governments that also run other business-friendly policies, and the growth comes from the wider mix rather than the programme itself. That’s defensible.

But there’s a third reading, and it’s the one that’s consistently overlooked in the political debate. Call it the contributory ongoing wealth effect. The people these programmes attract don’t stop contributing after the qualifying investment. The average client coming through La Vida’s channels has wealth in excess of $2.5 million. That capital doesn’t sit idle. Some of it goes into property. Some takes root in operating businesses, paying salaries and corporation tax for years afterwards. Some goes into the next generation, who study, work and start businesses themselves. The contribution compounds in ways that aggregate statistics struggle to capture but which over an eight-year window begin to show through, with the promise of more to come.

Where does this leave Europe?

The EU has spent much of the last decade pushing back against investment migration through rhetoric, legislation and, most recently, the European Court of Justice ruling against Malta’s citizenship route. Whether one agrees with that direction or not, the data suggests there may have been a cost. Other European governments are starting to look at this with fresh eyes. The UK has signalled interest in reintroducing an investor route. Italy has been actively expanding its programme.

Investment migration on its own is not the answer to Europe’s growth problem. Nothing on its own is. But it is one of the few policy levers that attracts productive wealth rather than driving it away, and the eight-year data is hard to dismiss.

If half the energy that has gone into restricting these programmes had gone into understanding what works in them, the bloc might be in a better position now to fund the things it says it cares about.

Paul Williams is CEO and Founder of La Vida.