Over the past few years, several European countries have offered golden visa programs to attract foreign investors. These visa programs provide them with residence or citizenship in exchange for significant financial investments.

These programs have been criticized for their potential to enable money laundering, and tax evasion, and even facilitate organized crime. As a result, in recent months, several EU member states have announced the end of their golden visa programs.

In this blog, we will explore which countries have scrapped their programs and the reasons behind their decisions.

Countries that have stopped Golden Visa Programs.

Ireland and Portugal have recently announced the discontinuation of their Golden Visa Programs. The decision came in light of growing criticism of these programs and concerns about money laundering, tax evasion, and other financial crimes.

Portugal Ends the Residency by Investment Scheme

In February 2023, Portugal's Prime Minister António Costa announced the end of the country's Residency by Investment Scheme. The scheme allowed foreigners to purchase property or invest a portion of their wealth in the country, known as capital transfer investments, in exchange for residency.

Between January and August 2022, the program brought almost 398 million EUR to the country, according to Portugal's national news agency LUSA. However, the program was also criticized for contributing to property and rent price speculation.

To tackle this issue, the Portuguese government has now imposed stricter residency rules. To maintain their residency status, individuals must use their property as their permanent residence or rent out their property long-term. Previously, residency status was granted for spending just seven days each year in the country.

Ireland Axes its Immigrant Investor Programme

In February 2023, Ireland officially ended its Immigrant Investor Programme, which offered Irish residence to foreign investors in return for a 500,000 EUR donation or a three-year annual 1 million EUR investment in the country.

The program was suspended for Russian citizens in March 2022 as part of sanctions imposed on the country for the invasion of Ukraine. Following this, the European Parliament warned that the program was vulnerable to tax abuse, leading to the decision to scrap the scheme.

The Irish Minister for Justice, Heather Humphreys, stated that the program did not align with the government's values and had become a source of concern for the country's reputation. She added that Ireland's success as a nation had not been built on the sale of citizenship but on attracting foreign businesses and talent that can contribute to the economy.

Where does Spain Stand in all this?

A bill to abolish the Golden Visa by Purchase of Property has been introduced to Congress in response to the rising controversy around the Golden Visa in Spain.

Spanish left-wing political group Más Pas seeks to end the nation's Residency by Investment programme for foreigners because it raises housing costs and drives natives out of the market, particularly in major towns and tourist hotspots.

The Spanish Golden Visa programme was launched in 2013, and it permits foreigners to obtain a Spanish resident visa by investing at least 500,000 EUR in real estate there.

Why is the EU against the Golden Visas

The EU has long been critical of golden visa programs that grant residency or citizenship to foreign investors in exchange for a significant investment. The main concerns of the EU are security, transparency, and the values that underpin the European Union project.

One of the main criticisms of these schemes is that they can be used to launder money, evade taxes, finance terrorism, and even facilitate organized crime. As such, the EU has repeatedly warned member states against introducing or expanding such programs.

Furthermore, the EU has argued that golden visa programs undermine the principle of free movement within the EU and threaten the integrity of the Schengen Area. This is because golden visa holders can travel freely within the Schengen Area, even if they do not meet the usual visa requirements.

Finally, the EU has raised concerns that these programs can create a two-tier system of citizenship, where those who can afford to invest large sums of money can obtain citizenship or residency rights that are not available to others. This, the EU argues, is incompatible with the values of the European Union, which is founded on the principle of equality and non-discrimination.

Conclusion

The golden visa programs in European countries have come under scrutiny, and several countries have taken steps to discontinue them. The programs have faced criticism for their impact on housing prices and the potential for money laundering. It remains to be seen whether other countries will follow suit and end their golden visa programs.

FAQS

What is a golden visa program? 

A golden visa program is a residency-by-investment program that allows foreign investors to obtain residency or citizenship in a country by making a significant investment in that country.

How does the Spanish golden visa program work? 

The Spanish golden visa program allows foreigners to obtain a Spanish residence permit by purchasing real estate worth at least 500,000 EUR in the country.