Employees of the chinese group Tiens during their visit to the Casa de Campo in Madrid in 2016, as part of the holidays financed by the president of the group, Li Jinyuan, (Dani Duch)
Spain has received 6,500 million euros in exchange for granting 35,422 “Golden visas”, a widespread way of attracting investments that makes the EU uncomfortable
Joaquín Luna | La Vanguardia 22/10/2020Is it legal to provide residence visas – and mobility – or even European passports in exchange for investments? The answer from twenty EU states is yes. That of the European Union is no. The financial crisis of 2008 promoted this way of collecting income, among whose main beneficiaries is Spain: the 35,422 gold visas granted since 2013 –8,000 to Chinese citizens– have reported some 6,500 million euros to the treasury, the highest figure in Europe for this concept below the 8,000 million of Cyprus, a country that together with Malta and Bulgaria, goes further: they grant passports.
Or they conceded, because the government of Nicosia has just announced that as of November 1, it is suspending its controversial Golden passport program after a series of scandals, the last one a report by the Al Jazeera network that showed Cypriot politicians negotiating the concession of a passport to a fake Chinese businessman who admitted to having a criminal conviction for money laundering (in theory, criminal records disqualify in all European countries). The other member in the EU’s sights is Malta, two states for whom the European Commission opened a sanctioning file on Wednesday.
The EU is suspicious of “golden visas” for fear of laundering but 20 member states grant them
Spain is one of the most successful countries when it comes to attracting investments and applicants for gold visas, a model that the Covid-19 submits to review. The pandemic has reduced travel but is creating more demand for golden visas, according to different experts. The sanitary quality factor has come into play. “Investors (or petitioners) have increased their concerns about health issues and want to be sure that the country they are interested in has the correct public and private health facilities to take on large-scale emergencies,” a spokesperson told this newspaper. from the Geneva-based Investment Migration Council, a lobby for the lucrative industry that manages visa applications around the world.
“The EU should establish clearer limits on verifying applicants’ data and tracking the origin of the money that allows them to access visas,” says Professor Manuel Villoria, from the Executive Committee of Transparency International Spain, a very active in Europe when it comes to scrutinizing corruption. Villoria regrets that in the case of Spain there is a period of only seven days for the embassies to report whether the applicant has a criminal record. “What is it about Spain that is so attractive? I don’t think it’s the sun ”, he asks rhetorically.
Cyprus has announced that it is suspending the processing of passports in exchange for investments as of November 1 and is the subject, along with Malta, of a sanctioning file from the European Commission opened on Tuesday for a series of irregularities. (Petros Karadjias / AP)
Companies in the sector, often located in Great Britain or Switzerland, downplay the impact and scope of these golden visas or passports issued by Cyprus, Malta or Bulgaria. “Only 0.1 percent of residence permits granted by European countries correspond to Golden visas,” says Paul Williams, who runs La Vida Golden Visas, a British company founded in 2013 and which owes its name to his initial specialization in Spain. “Barcelona, by the way, has been and is the place that our clients prefer when acquiring a property in Spain that allows them to access a visa,” he says.
The success of Spain can be attributed to the excellence of its passport – the fourth most valued in the world, according to the Passport Index ranking, prepared based on the number of countries to which it is possible to travel without a visa – and for its good “quality -price”. There are three types of investments that give access and in a time less than six months: financial, real estate and entrepreneurial in nature. The lowest sum is 500,000 euros to purchase a property. The highest is 2 million euros if it is a question of public doubt purchase. These conditions set in 2013 were relaxed in 2015 when the obligation to spend a minimum of time in Spain disappeared. And each beneficiary of a golden visa has the right to family reunification that includes a spouse and descendants under 21 years of age, the assumption of half of the 35,422 visas granted since 2013.
“We do not go into the moral reasons, but it could be said that we are denying residence to refugees fleeing wars and giving visas to those who originate them or profit from them”, observes Manuel Villoria.
The golden visas were inspired by Saint Kitts and Nevis (or Saint Kitts-et-Nevis, the first British colony in the Caribbean), which after independence in 1983 faced a sugar crisis that led them to offer a passport – valid for travel without a visa to a hundred countries, including those of the EU, who invest in the tourism industry.
Today, twenty EU states offer so-called golden visas, the reputation of which lives under permanent suspicion. The OECD, the IMF and the European Commission have criticized this mechanism from the first minute for its possible relationship with money laundering, organized crime and financial opacity, but they have not gone beyond words either.
Despite the fact that there are 20 states with golden visas, an EU report from January 2019 already warned that insufficient transparency in the processes increases the risks of “money laundering, tax fraud and corruption”. A Portuguese minister resigned in 2015 for helping a network that expedited procedures, but the most dramatic case was the murder in 2017 of the Maltese journalist Daphne Caruana, who was investigating the deals of the world’s leading company in processing “golden visas” – Henley & Partners- with senior management positions.
Prominent quote: Dozens of firms offer ‘packs’ with a clear message: choose the European country and we will get you a visa.
“It is up to each member state to set the conditions under which nationality is acquired or lost, but the Commission expects them to carry out the strictest possible security controls on applicants,” a Commission spokesperson responded to Le Monde. In other words: there is no unit of criteria nor is it expected.
Dozens of international firms -just look at the networks- offer the possibility of complete “packs”: choosing the European country that best suits your needs, the purchase of properties that facilitate the visa and all tax or family reunification procedures. “Portugal is outperforming Spain for a while because it takes better advantage of real estate investments: they allow investment in renovation, which explains the boom in Lisbon, while in Spain a lot of second-hand homes are bought. Each State decides how to channel legal investments. They say that the Russians have “invaded” Cyprus, but one must wonder how they and other small states could have overcome the financial crisis of 2008 ”, estimates Paul Williams.