Decrease in popularity of Latvian gold visas
Latvia launched a residence permit programme for investment in 2010. Since then, the programme has brought the country €1.5 billion, of which Latvia received €1.4 billion until July 2016. Thus, the period from 2017 to mid 2020 was €100 million. This indicates a decline in investor interest in the program.
According to the number of investors, from July 1, 2010, to June 30, 2019, 18 600 participants of the investment program received gold visas for Latvia. That is, on average every six months residence permit of Latvia for investment received more than 1 thousand people. There is a huge difference with 5 applicants for the first 6 months of 2020.
How did the terms of the program change
Latvia’s residence permit programme started to decline long before the pandemic. The country’s government has been tightening the terms of the programme since 2014. First, the minimum threshold for investment in real estate rose from €71,150 thousand to €250 thousand in 2016 became more stringent security checks.
The number of applicants has fallen drastically since the 2017 change in the program. Then all future investors and their family members were obliged to pay €5 thousand per person every 5 years for the renewal of the status.
Reasons for change
Latvia’s program was especially popular with citizens of the former USSR – they accounted for more than 90% of applications. It has caused fear in Russification of the country of National association which initiates toughening of conditions.
The Latvian government has not yet decided on the future of the residence permit program for investment. Some propose to close it, others – even tougher conditions and raise the minimum threshold for investment in real estate.
Competing with Portugal, Greece and Spain programmes
The changes made Latvia’s program uncompetitive, so it hardly makes sense to go in that direction. Today the program of Latvia loses gold visas to Portugal, Greece and Spain.
These countries offer more comfortable conditions. In addition, they are popular among tourists – renting accommodation brings tangible income. This, in turn, affects the liquidity of facilities and attracts real estate investors.
Portugal attracts investors despite the higher threshold of investment in real estate – €350 thousand Golden visa allows obtaining citizenship in 5 years without the condition of permanent residence. In addition, Portugal is a comfortable Mediterranean climate, developed economy, a high level of medicine, education and security.
Sales statistics confirm the convenience of the program. The number of applications for the residence permit program in Portugal decreased in January-April 2020, but May was a record-breaker in the number of issued gold visas. Its figures offset the decline. The Government continues to stimulate demand, recently simplifying citizenship for children and extending the validity of residence permit cards.
Greece offers a residence permit to investors for the purchase / rent of real estate, securities, placement of deposits. The minimum investment threshold is €250 thousand. To facilitate access to investors in the period of closed borders, the government allowed all procedures for the program remotely. In addition, children of investors over 21 years began to issue a separate residence permit for up to 3 years.
Spain offers a residence permit for investment in real estate from € 500 thousand The country has not yet offered more favorable options, but developers have already asked the government to lower the minimum investment threshold of € 250 thousand.