Russian oligarchs and Putin’s cronies have been enthusiastic investors in Western Golden Visa schemes so the war in Ukraine makes them harder to defend.

So-called ‘Golden Visa’ schemes that offer qualified residency and a path to citizenship in return for cash dressed up as an ‘investment’ have been opposed by the European Commission and some EU member states since they were introduced, using various arguments against them like money-laundering, tax evasion, and unfairness. 

Back in March 2018 Transparency International warned that “New EU citizens under these schemes include persons from the ‘Kremlin list’ who are believed to be close to Russian President Vladimir Putin and Tatiana Yumasheva, daughter of former Russian president Boris Yeltsin.” That Putin’s war in Ukraine is being prosecuted by people who might have benefited from Golden Visas gives extra weight and impetus to arguments to abolish them. 

In 2019 I reported that both the European Commission and the European parliament were calling for an end to European Golden Visa schemes, and wondered how long the schemes might last. 

In January 2019 the EC published a report warning that European residency-by-investment programmes are a potential threat to security, and source of dirty money. “We speak about opening [a] golden gate to Europe for some privileged people who have the money to pay for citizenship or residence,” EU justice commissioner Vera Jourova said at a press conference presenting the report. “We are looking at it with concern.” Bulgaria, Cyprus, and Malta were singled out for criticism for operating cash for residency schemes that require no connection to the country.

Then in March 2019 the European parliament in Strasbourg passed a non-binding resolution stating that citizenship by investment schemes “do not offset the serious security, money laundering, and tax evasion risks they present,” and calling for all Golden Visa schemes to be “phased out” as soon as possible.

Fast forward to 2022 and last Wednesday, in the light of Putin’s invasion of Ukraine, the European parliament approved a report “urging the EU to ban golden passport schemes by 2025 and immediately stop the issuance of visas and passports to rich Russians in exchange for investments,” according to Reuters. A large majority of EU lawmakers voted against Golden Visa schemes in yet another non-binding resolution. 

The problem is that residency-by-investment schemes, popularly called ‘golden visas’ or ‘golden passports’ are controlled by member states, not the EU, even though they give Golden Visa investors access to the whole block via the back door.

Spanish Golden Visa residency-by-investment scheme

The Spanish Golden Visa scheme, which offers qualified residency, and a path to long term citizenship in return for, amongst other things, an equity investment of €500,000 or more in property, was introduced by the Popular Party (right of centre) in 2013, in the depths of Spain’s post-property-bubble recession, when times were hard, money short, and property for sale in Spain abundant.

Too bureaucratic and unattractive compared to other countries like Portugal when first introduced, the take up was poor until it was tweaked in 2015 to make it more appealing to investors. By 2018 it was the most popular Golden Visa scheme in the EU with 24,755 visas issued since it was introduced and annual income of €976 million according to a report by Transparency International.

Personally I find those figures from Transparency International hard to believe, or maybe it’s because the property investment hasn’t been a great success, and that’s the only bit I look at. I doubt that, however, because to the best of my knowledge, the property investment is the most popular part of the scheme.

Have a look at the figures released by the Spanish government as reported in the mainstream Spanish press and illustrated in the charts below. There were a total of 4,383 ‘Golden Visa’ property investors between 2013 and 2021, and even if you assume 3 visas per investor for family members, that only gets you to 13,149 visas. As I have understood it, the Spanish Golden Visa scheme for property investors has never been a great success, though recently it has rumoured to be popular with British investors after Brexit.

Now that the Spanish Socialists run Spain in coalition with the hard left Podemos party who hate the Golden Visa for selling privileges to rich foreigners, and given the EU’s renewed hostility propelled by the war in Ukraine, I can’t see the Spanish government keeping the scheme going for much longer. To be honest, I’m surprised they haven’t already scrapped it – maybe it is more successful than I thought! Whatever the case, it is certainly getting harder to defend. Anyone interested in a Spanish Golden Visa might want to make their move sooner rather than later.

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