Is Europe's Lowest Golden Visa Route In Danger?
Five legislators from the Progressive faction have proposed a significant and potentially transformative bill aimed at removing the €150,000 (approximately US$172,000) fund option from Latvia’s golden visa program. This initiative is being spearheaded by the faction chair, Andris Šuvajevs, who is joined by his colleagues Andris Sprūds, Liene Gātere, Kaspars Briškens, and Jana Simanovska. The legislators submitted bill 1521/Lp14 on September 3, a strategic move that came just twelve days prior to the enactment of the new Immigration Law, indicating a deliberate effort to influence the legislative landscape surrounding immigration and investment in Latvia.
The proposed bill specifically targets Article 27(1)(36) of the existing legal framework, which currently allows foreigners to secure temporary residence permits for a duration of up to five years. This is contingent upon their investment of at least €150,000 into a state-created alternative investment fund manager for a minimum period of five years. In addition to this investment, applicants are also required to make a contribution of €10,000 (approximately US$11,500) to the state budget, essentially creating a financial entry point into the country for foreign nationals seeking residency.
It is important to note that the bill does not impact the existing route that allows for obtaining residence permits through company share capital investments. However, with the recent closure of property and bank deposit routes, Latvia is poised to retain only one remaining investment pathway for potential immigrants. Furthermore, the bill notably lacks transitional provisions, which raises concerns about how it will affect applications that have already been submitted prior to its enactment, leaving a gap that could create uncertainty for applicants.
The explanatory note accompanying the bill, written in Latvian, presents a critical perspective on the current practice of granting residence permits in exchange for what is described as “a financial, and in this case very minimal, investment.” This critique emphasizes the potential risks associated with this route, including “disproportionate and heightened” concerns regarding security issues, money laundering, sanctions evasion, and the overall reputation of Latvia in the international community.
The sponsors of the bill argue that the permits granted “on the basis of investment” tend to favor applicants based on their financial capacity rather than addressing actual labor-market needs, security considerations, or integration policies. They reference a report from a Saeima inquiry committee, which was approved on May 26, recommending the closure of all existing investment routes, including the company route, prior to the establishment of the fund route. This underscores a growing sentiment among certain lawmakers that the current system is flawed and needs reform.
In terms of economic implications, the explanatory note assesses the bill’s potential impact as positive, suggesting that lawmakers adopted the fund route without “sufficient and data-based justification” regarding its “real economic contribution” to the country. It also posits that there will be no budgetary loss as a result of the bill, given that no payments under the fund route have thus far been directed to the state budget, indicating that the route may not yet be fully operational in practice.
On August 20, lawmakers made the decision to re-pass the law with the fund route still intact. Following this development, Šuvajevs informed the LETA news agency that his party would intensify efforts in September to terminate the golden visa program entirely. He articulated concerns that the program has negative repercussions for young people and families residing in Latvia, suggesting a broader socio-economic impact that extends beyond mere financial considerations.
During the debate on August 20, Sprūds, who previously served as the defense minister, voiced strong opposition to the concept of “selling golden visas.” He articulated his stance by warning that such practices pose a significant “security threat,” a sentiment that reflects broader anxieties regarding the implications of foreign investment on national security.
Following the introduction of bill 1521/Lp14, the Saeima referred the proposal to the Defence, Internal Affairs and Corruption Prevention Committee. This committee is chaired by Raimonds Bergmanis, a member of the United List, which is the political party aligned with Prime Minister Andris Kulbergs. Notably, Bergmanis was one of the original proponents of the fund route when it was first introduced, which adds a layer of complexity to the current discussions surrounding the bill.
“It is important to note that bills require time to progress through all the reading stages in the Saeima,” cautions Viktorija Tomaševiča, a lawyer at EU Law Firm. Her insights highlight the procedural nature of legislative processes, indicating that there will be several stages of review and debate before any decisions are finalized.
In relation to bill 1521/Lp14, Tomaševiča explains that the referral to committee represents “one of the initial steps in its legislative process.” She further notes that with elections scheduled for October 3, there may be a pause in the legislative momentum, as stakeholders will likely await the election outcomes before formulating further opinions or actions regarding the bill. This situation underscores the dynamic interplay between legislative actions and the political landscape in Latvia.
Comments