European immigration avenues such as the golden visa program in some Mediterranean countries and Ireland's Immigrant Investor Programme have been treasures of the migratory industry over the last decade. Foreign Investors seeking visa-free access to the Schengen Area, relocation to the continent or a pathway to European citizenship have been served very well by such programs opening doors to the wider European Union in various realms such as business, healthcare and education.
Wealthy businessmen from source markets such as China, Vietnam, Nigeria and Egypt often suffer from travel restrictions and daunting visa-processes despite their wealth and status back home. Thus, the opportunity to make an investment and acquire visa-free access to the Schengen Area always made European Golden Visa programs attractive.
Although, it isn't only citizens from countries with weak passports who have turned to Portugal's Golden Visa for a brighter and more secure future. Thousands of U.S. citizens worried about the fate of their country flocked to Portugal in recent years to live a calmer, less costly life with the increased sense of security dual citizenship brings. In fact, the U.S. has become the second largest source market for investors in Portugal in the past few years.
Many investors from the states have been attracted to Portugal and also Ireland's pathways to citizenship which provide life changing opportunities for investors who can become naturalized EU citizens. Doing so results in the right to live, work and conduct business across the entire EU.
Both the Portugal Golden Visa program and Ireland's Immigrant Investor programme trumped the European Golden Visa market. Portugal is now a thriving destination for expats, digital nomads and retirees largely thanks to the trends set by the golden visa program. Similarly, Ireland's program was the sixth European program of its kind to become a billion dollar industry. In 2022 applicant's in both Portugal and Ireland reached unprecedented numbers.
Yet, 2023 marks the extinction of two of Europe's most popular Golden Visa Programs.
Portugal and Ireland both announced in February 2023 they'll be ending the programs this year. Already Ireland has stopped processing applications submitted after February 15th, 2023. Whereas Portugal has kept the window open for investors until the "More Housing" bill goes into effect, which should be by the end of May 2023.
What's prompting these closures?
Ireland Justice Minister, Simon Harris didn't give any specific reason as to why Ireland would be closing the program. Rather he simply said such programmes are constantly being reviewed and reflected that the programme was opened in a time of economic hardship. However, speculation is that Ireland has wavered under the pressure of Brussels and Paris to permanently end golden visa schemes across the EU.
Whereas Portugal proposed closing the golden visa in a bill addressing the current housing crisis. The golden visa reformations are part of the larger 'More Housing Bill'. Presumably, given that since January 2022, real estate investments into the major cities of the country in Lisbon, Porto and The Algarve are already ineligible as Golden Visa investments this is very unlikely to make a difference. There is still hope for the Portugal Golden Visa in the form of a 'new residency program' under a different name. The government will keep the Cultural & Arts Investment pathway open.
So in 2023, what are the alternatives? Read on to see what options remain in Europe for investors keen on obtaining EU citizenship by investment.
Malta Citizenship by Investment: The last of its kind
The closure of the Portugal Golden Visa and the Ireland IIP program marks the end of two of just three direct pathways to citizenship with flexible stay requirements. Greece, Spain, Italy and Latvia's Golden Visa programmes require a 183 day stay per year in the country (becoming tax residents by doing so). In Portugal however, the minimum stay per annum is a mere seven days. Ireland was more strenuous, requiring a continuous 12 month stay in the country in the fifth year of residency.
By the end of 2023, Malta's Citizenship by naturalization for exceptional services program will be the last program of its kind in Europe. Investors who acquire residency in Malta under the program are entitled to apply for citizenship after either one or three years, depending on the amount they invest. While this initial pre-residency requirement exists before investors can apply for citizenship, there is no physical stay requirement. Investors can have a Maltese passport in hand 18 months after starting the initial process.
However, the price of citizenship in an EU country is steep. A donation of €700,000 is required for those willing to wait the standard 36 months. Those who make a contribution of €800,000 are entitled to apply for citizenship after 12 months of residency. On top of this investors must make a donation of at least 10,000 EUR to a non-profit organization or charity approved by the community Malta agency. Then take into account the service fees, government processing and due diligence fees. In essence, Maltese Citizenship by Investment is realistically only an option for ultra high net worth individuals.
Those with adequate funds can acquire a Tier 1 passport in one of the world's most tax friendly countries. Acquiring the right to live, work, study and conduct business freely throughout the 27 state blocks of the EU. Those who invest into Malta can get passports for their entire family, granting visa-free travel to 187 countries including the UK, Canada and the USA. Malta is an English speaking nation with beautiful beaches, high quality education and a great healthcare system — an undeniably great European investment destination.
Malta Permanent Residency Program
The Malta Permanent Residency Program is much more affordable than its big brother and is a solid option for visa-free access and long term residency in Europe.
However, citizenship is only in the cards for those willing to relocate to Malta and spend six months per year for seven years. Still, it's a permanent solution. Investors are indeed getting permanent residency in the country providing them with visa-free travel for life and residency in a secure and tax friendly European island nation.
The Maltese program is a relatively quick process, and upon qualifying citizenship can be sorted in as little as 4-6 months.
Benefits: With the Maltese citizenship by investment program, you can settle permanently in Malta and travel visa-free across Schengen for a duration of 90 out of 180 days. Plus, gain access to Malta's affordable real estate market and have the opportunity to include up to four generations in your application!
Eligibility and Requirements:
- be third country nationals, non-EU, non-EEA and non-Swiss;
- not originate from sanctioned countries
- not gain any advantages under other applicable regulations and schemes;
- be in receipt of stable and regular financial resources, sufficient to maintain themselves and their dependents, without recourse to the social assistance system of Malta;
- must possess capital assets of a minimum value of €500,000 with at least €150,000 being financial resources.
- clean criminal record; and pose no threat to national security
Investors have the choice of:
- Purchasing a property for a minimum value of €300,000 in the South of Malta/Gozo or €350,000 in the rest of Malta and pay a government fee of €28,000; or,
- Renting a property for at least €10,000 in the South of Malta/Gozo, or €12,000 in all other areas and pay a government fee of €58,000
Additionally, the following fees apply:
- A non-refundable administrative fee of €40,000
- Each adult dependent aside from the spouse costs an additional €7500
- Donate €2,000 to a local organization registered with the Commissioner of Voluntary Organizations
- Present Valid passport
- Must have local and Schengen covered private health insurance
Note: those who choose to purchase property must maintain their investment for a minimum of five years at which point they can sell their asset and a residential address is no longer required
While at first glance, the list of financial requirements above might look intimidating, upon adding up the numbers this is one of the affordable residency programs in the world for investors seeking visa-free access to the Schengen Area.
Many investors initially attracted to Caribbean citizenship by investment programs for their visa-free travel rights end up turning to Malta when visa-free access to the Schengen Area is the main goal.
Greece Golden Visa as an alternative to Portugal
The closure of the Portugal Golden Visa marks a significant opportunity for the Greek Golden Visa which is Portugal's closest direct competition. Both programs are very similar and heavily reliant on real estate investors. The minimum investment in Portugal is €280,000 while the minimum investment in Greece is €250,000.
Crucially, Greece does not impose minimum stay requirements on investors. However, those that wish to apply for citizenship must live in the country for at least half of the year for a period of seven years. Portugal's key advantage has been its flexible pathway to citizenship.
Nevertheless, Greece's Golden Visa is already one of the world's most popular investor programs globally in terms of volume. In fact, in 2021, with more than 1,000 approvals the Greece Golden Visa program was Europe's biggest investor program in terms of volume. With huge numbers of applicants recorded early this year amid the forthcoming closure The Portugal Golden Visa program, Greece again looks set to smash records as Europe's most popular investor program.
The reasons for Greece's popularity are simple. Who wouldn't want to own a home in the beautiful Mediterranean country?
The Greek real estate market is equally as attractive as Portugal's, but what's better is that there are no restrictions on the type of property clients can invest in. Since 2022, Portugal has limited golden visa investors to residential properties in low-density areas of the country leaving only commercial properties eligible in Lisbon, Porto and The Algarve.
Greece as a nation is on the rise! It has managed to emerge and re-establish itself since the economic crash 15 years ago — the future is bright and innovative. The country is revitalizing through tech, innovative green development and restoration. Still it maintains the ancient world allure attracting so many to visit and invest in Greece. In 2022, the Greek Real Estate market grew by more than 11% and is forecasted to see a 40% increase in state receipts from real estate transfers in 2023 according to century 21 Greece.
Greek Golden Visa Changes Delayed!
Since autumn of 2022, Greece has seen a massive uptick in applications. So much so that processing them all has been a chore to keep up with. Even so, the Greek Golden Visa process is far more straightforward than Portugal's ever was. Typically, residency can be acquired in as little as 3-6 months opposed to a 12-18 month wait in Portugal.
Nonetheless, we can only anticipate the trend will continue as Greece recently announced it will be postponing the cost hike of the golden visa in popular areas until July 31st, 2023. The Greek government was set to double the minimum investment cost from €250,000 to €500,000 in the more popular areas of: North, South and Central Athens, Mykonos, Santorini, and the Municipalities of Thessaloniki and Vari. It was originally set to go into effect by May 1, 2023. This decision comes as a big relief for last minute investors.
To secure the €250,000 minimum price tag country wide, investors must put down a 10% deposit up front and complete the investment by the end of 2023.
If three months is a bit of a rush, or you're just a fan of emerging and underrated areas, Lincoln Global Partners has some gem properties in places where the investment minimum won't exceed €250k such as Crete, Piraeus Halkidiki and Paros.
Portugal D7 Visa
Unlike the Portugal Golden Visa, Portugal's equally popular D7 Visa program is set to stay. The D7 program is a valid alternative to the Golden Visa program for those with passive income. The ripple effect of the Golden Visa closure will likely cause an increase in D7 Visa applicants, despite the program differences.
The D7 Visa is more restrictive, requiring applicants to spend an annum 183 days in the country to renew residency permits. Making It only suitable for those who plan to relocate and willing to become tax residents. Portugal's NHR tax regime and extensive double taxation treaties certainly make the country an attractive place for a relocation to Europe. Under the regime pensions are taxed at just 10% and there are exemptions altogether on certain types of qualifying income.
To qualify, the main applicant must be able to prove that they have at least 100% of the minimum wage, currently set at €8,460 per annum. An additional amount of 50% of the minimum wage must be shown for the dependent spouse and 25% per child. The D7 visa is valid for two years and is renewable based on the same conditions as applied for.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.