Following a series of new investigations led by the Organized Crime and Corruption Reporting Project (OCCRP), Transparency International urges the European Commission to scrutinise ‘Golden Visa’ programmes in Europe.
Imagine for a moment that you’re an unscrupulous businessperson with close ties to your government in a country with higher than average levels of corruption.
You make more money than you know what to do with from lucrative public contracts (awarded in processes that aren't exactly competitive). Other friends own the media, so the disasters that happen every now and then at your facilities don’t get much air-time. And you don’t come under much pressure from activists or NGOs because your corrupt politician friends keep them in check.
But do you actually want to spend all your time in a country racked with corruption?
Wouldn’t it be nice to have the option to easily travel, and even live, somewhere else?
Say, somewhere in Europe?
What if we told you that you can forget lining up at the embassy for a Schengen visa?
With enough cash, an array of European ‘Golden Visas’ – residence permits or passports – are at your fingertips.
Based on OCCRP investigations and our own research, we have compiled a non-exhaustive list of the options at your disposal in the European Golden Visa Shop.
Coast or mountains? Real estate or business investment? Want your money back in five years? Worried you might not pass a background check? No problem; some countries are more forgiving than others. There’s something for everyone.
But first, some background.
What exactly is a Golden Visa?
The idea is simple: governments trade citizenship or residence rights for investment. Arrangements differ from country to country, and requirements may include investment in business, real estate or government bonds.
Over 20 countries or territories currently offer Golden Visa programmes worldwide, including 13 in Europe: Austria, Belgium, Bulgaria, Cyprus, Greece, Latvia, Lithuania, Malta, Monaco, Portugal, Spain, Switzerland, and the United Kingdom. Hungary ran a controversial Golden Visa programme from 2013 to 2017.
Freedom of movement, tax advantages as well as access to the EU’s single market, legal system, and social services are some of the main selling points for EU member states’ programmes.
Not surprisingly, there is a lot of demand. Over the past few years, the Golden Visa market has turned into a multi-billion-euro global phenomenon with price tags varying from country to country, costing anywhere from €250,000 to €10 million.
Short answer: no.
OCCRP reporters investigated the Golden Visa programmes of seven EU member states – Austria, Cyprus, Hungary, Latvia, Lithuania, Malta and Portugal – as well as programmes currently on the table in Armenia and Montenegro.
While Golden Visa programmes bring in financial capital, they also represent a potential threat to the fight against cross-border corruption. Without sufficient integrity checks in place, they constitute an easy back door for the corrupt, as OCCRP’s recent investigations have revealed.
In light of the significant sums involved, governments need to scrutinise the source of foreign assets to ensure that Golden Visa programmes are not used to launder money.
Governments must ensure the impartiality and integrity of the programmes, especially when they have outsourced their management to private companies which sometimes also advise clients on how to apply to them, representing a conflict of interest.
Citizenship can be acquired after investing €2 million in real estate, companies or government bonds.
No residency requirement
While background checks are required by law, their rigor is questionable.
The programme is the main avenue for wealthy Russian businesspeople to gain an EU passport.
Oleg Deripaska, a Russian billionaire with close ties to President Vladimir Putin and one of the names on US Treasury’s 'Kremlin list'. He is also a one-time business partner and employer of US President Donald Trump’s former campaign chairman Paul Manafort.
Contribution of €650,000 to Government Development Fund
Additional contribution of €25,000 per family member
Further €150,000 investment in approved instruments
Minimum property purchase of €350,000 or lease of a residential property in Malta for a period of 5 years, at an annual rent of at least €16,000
Residence in Malta for a period of 12 months preceding the issuing of a certificate of naturalisation
The programme was designed and is being implemented and promoted by Henley & Partners, a global firm offering residency and citizenship planning on behalf of the government of Malta under a public services concession.
The programme is especially popular among Russian businessmen, including at least three 'Kremlin-list' billionaires: Arkady Volozh, Boris Mints and Alexander Nesis, all of whom obtained Maltese passports in 2016. This is in addition to the lengthy list of other Russian businessmen who received passports and are suspected of corruption published by Transparency International Russia in December 2017.
Capital contribution of up to €1 million or real estate investment equal to or above €500,000 - or €350,000 if property is located in urban regeneration areas - or the creation of 10 jobs.
Applicants should stay in Portugal for a period of seven or more days in the first year and 14 or more days in subsequent years.
In 2014, the programme was rocked by a major corruption scandal when criminal corruption charges were filed against former Interior Minister Manuel Macedo and the former heads of the notaries service and the immigration authority, among others. The latter were accused of being involved in a bribery scheme and accepting gifts in exchange for expediting residence permits. The trial is ongoing.
Ninety per cent of the money raised by Portugal’s Golden Visa programme comes from real estate investment which, according to Transparency International Portugal, exponentially increases money laundering risks.
The US State Department’s 2017 International Narcotics Control Strategy Report states that “suspect funds from Angola are used to purchase Portuguese businesses and real estate” and reports allegations that “Portugal serves as a hub for laundering illicit funds for Angola’s ruling class.”
Transparency International is a member of the Global Anti-Corruption Consortium, a ground-breaking partnership to accelerate the global fight against corruption, bringing together investigative journalism spearheaded by the Organized Crime and Corruption Reporting Project and advocacy driven by Transparency International, the global anti-corruption movement.