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Saturday, March 14, 2015

Portugal's 'Golden Visa' Trade for Rich Immigrants

Portugal is selling EU residency permits to any rich foreigners willing to pay. The opposition calls them corrupt deals that encourage organized crime, but the government simply wants to lower the prices.
Portugal's Deputy Prime Minister Paulo Portas has at least been honest about what's important to him. "The golden visa has brought Portugal 1.27 billion euros [$1.38 billion] of investment in two years," he said. "So it would be stupid if we shut up shop and other countries earned that money."

Even if the special residency permits for non-EU millionaires have already cost the head of the immigration authorities his job, and even if the criticism of "visa dispensation by wealth" has grown louder, Portugal seems determined to carry on stamping the passports of rich Chinese, Brazilians, Angolans, and Russians so that they can live anywhere they like in the European Union's Schengen Area.
The condition is that anyone who wants one of the much-prized EU residency permits has to invest 500,000 euros in Portuguese property. In expensive Lisbon that's more or less a bargain - many Chinese are used to much higher prices and are grasping the opportunities. Many luxury apartments in the Portuguese capital and at the beaches of the exclusive suburb Estoril are now owned by Chinese people. The fact that some of these high-end immigrants may not have earned their fortunes honestly was illustrated by the arrest of a "gold visa" owner wanted in China for fraud and other serious offences. He is now awaiting extradition.

Criminal sources
"We are offering residency permits to people when we don't know where their fortunes are coming from," warns Joao Semedo, parliamentarian for the left-wing alliance "Bloco da Esquerda," which, like the Socialist Party, is against the government's generous visa policies. Ana Gomes, MEP for the Socialists, also believes that the "golden visa" is a backdoor to criminal organizations and international money launderers, and is calling for it to end.

The visa was temporarily interrupted after the director responsible at the immigration authorities was arrested last year, along with a dozen senior state officials, on suspicion of corruption. It is still unclear who may have taken money to stamp a passport, but the scandal did force the resignation of then-Interior Minister Miguel Macedo.

Chinese customers
Altogether, more than 1,500 golden visas were handed out in 2014, and by far the most of them went to Chinese applicants. Second and third place were Brazilians and Russians. But most of them did not invest anything to build up small businesses. Instead they bought luxury apartments, said Sergio Alves, general secretary of the Portuguese-Chinese Chamber of Commerce. "The golden visas have not led to any investments in the economy," he said. "It is being used exclusively to buy real estate. Most of the Chinese who buy don't even live here on a permanent basis."

Meanwhile, the luxury property market is booming. Portuguese and Chinese firms are now specializing in rich customers, offering complete packages including a visa application and a Portuguese cleaner. Real estate agent Nuno Durao, who has an expensive office next to the fashionable casino in Estoril, is happy enough. "The government's golden visa law was one of the best ever for helping Portugal," he says. "It is uncomplicated and brought investments immediately."
Durao specializes in anything expensive - from the palace to the penthouse. Portugal was never an industry country anyway, he argues, in fact - it was always dependent on tourism. Accordingly, the property boom made the country attractive to rich tourists and helped out the ailing, crisis-hit construction industry.

Lowering the price
Ana Gomes says that the urge to make quick money is leaving ethics by the wayside, which is why she insists that the golden visa needs to be cancelled. Portuguese MP Joao Semedo also warns that the visa offers a backdoor for criminal money to the EU. For that reason, his left-wing alliance has called for an end to the program and an investigation into the money that has already entered the country. "It could have come from economic crimes, or out of international money-laundering centers," he says.

Deputy Prime Minister Portas is not impressed by any of these arguments. He even wants to lower the price for the new golden visas. If he has his way, a pledge to invest 350,000 euros in building renovation or art or science projects will be enough to get a residency permit. Those investing in underdeveloped regions can even expect a discount of 20 percent. The competition to win over rich foreigners has got tougher, says Portas: "After all, we're competing with 13 other countries."
Instead of scaring potential applicants away with tough conditions, Portas would rather offer them gifts. As for the accusations of corruption and other crimes in connection with the golden visa, Portas has just this to say: "Anyone who is guilty should be hit by the full weight of the law." What he fails to mention is that Portugal's police, state prosecutors, and judges are now hopelessly overburdened thanks to the austerity measures imposed by his government.

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