Wealthy foreigners are buying themselves a residence permit for Europe in Portugal. The opposition warns of shady deals and illegal earnings. Yet the government is still lowering the "entrance fees".
Portugal's Deputy Prime Minister Paulo Portas has at least openly admitted his interests and says, "The golden visa has brought 1.27 billion euros of investments to Portugal in two years. It would be idiotic if we closed shop and other countries earned this money."
The head of Portugal's immigration police lost his job for issuing illegal visas to wealthy foreigners from outside of the EU and the criticism of visa allotment based on spending power is growing stronger. Despite all this, Portugal will continue issuing residence permits to wealthy Chinese, Brazilians, Angolans and Russians, enabling them to live in the westernmost country in the EU and the entire Schengen zone. If the price is right.
Those who want the coveted EU residency permit for themselves and their families must invest 500,000 euros in real estate. That is almost a bargain in the pricey city of Lisbon. But the Chinese, in particular, are used to even higher prices for apartments, and they enthusiastically grab the opportunities.
A great number of the luxury apartments in Portugal's capital, or on the beaches of the exclusive suburb of Estorial, are now firmly in the hands of the Chinese. Not all of the wealthy immigrants have made an honest living, as proved by a gold visa owner who is wanted for fraud and other serious crimes in China and is now waiting for his extradition.
Illegal money and gangs
"We're issuing visas to people whose sources of income are unknown," warns João Semedo of the left-wing party "Bloco da Esquerda", which, like the Portuguese socialist party, is against the government's liberal visa policy. The socialist MEP (Member of European Parliament) believes that Portugal's golden visa scheme is creating a gateway to Europe for international money launderers and criminal organizations and he demands to put a stop to the practice.
Portugal: Visa for cash
At times, the golden visa program had been interrupted, for instance, when the head of Portugal's immigration police and about a dozen civil servants, some of them in very high positions, were arrested on suspicion of corruption.
It is not yet known how many of them had been bribed, nor the amount of money paid for the coveted passport stamp. But the scandal had even forced the then Minister of the Interior Miguel Macedo to resign.
Main customers are from China
Over 1,500 golden visas were issued in 2014. The greatest number of them by far was for the Chinese, followed by the Brazilians and then the Russians. However, most of them did not invest, as originally expected, the required million euros in the creation of businesses. Instead, they bought luxury apartments, according Sérgio Alves, Secretary-General of the Portuguese-Chinese Chamber of Commerce. "The golden visa has not led to any investments in the economy - it is used exclusively for real estate. Most Chinese people who buy do not even live here permanently ".
Nationwide real estate projects attract golden visa applicants
And the luxury real estate market is flourishing. Portuguese and Chinese companies have focused on the wealthy clients and offer complete packages, including a visa application and even a Portuguese cleaning lady. Nuno Durão, real estate brokers with upscale offices next to the glamorous Casino Estoril commented, "The golden visa law is the best thing the government has ever done to help Portugal. It is straightforward and has promptly brought investments."
From palaces to penthouses, Durão sells pretty much anything expensive. Portugal is not a developed country anyway and it is geared towards tourism, he declares. The real estate boom has gotten wealthy investors talking about Portugal and the crisis-ridden construction industry is back on track.
Government makes visa allocation easier despite protest
The quick money makes people forget morals, criticizes MEP Ana Gomes and still insists on ending the gold visa program. Parliamentary member João Semedo points out that these visas are a back door for channeling money of dubious origins into the European Union. Hence, his party is demanding to put an end to the visa policy and to carefully examine how the funds have flowed. "They could have even come from economic crimes or international money transfer centers."
The deputy prime minister did not contest any of this. He even wants to lower the "entrance fee" for the new golden visa. Soon it will suffice to invest 350,000 euros in the refurbishment of old buildings, art projects or science projects to obtain the luxury residence permit. Whoever buys into underdeveloped regions can also expect a discount of 20 percent. The campaign for wealthy foreigners has become tougher", says Paulo Portas and, "ultimately, we are competing with 13 other countries."
But the deputy prime minister prefers to hand out dubious guest favors to potential visa applicants rather than to scare the rich away with tough requirements. With regard to accusations of corruption and crimes related to the golden visa, Paulo Portas only says, "those who are guilty will bear the full rigor of the law." The deputy prime minister is deliberately hiding the fact that Portugal's criminal police officers, prosecutors and judges are hopelessly overworked because of the government's austerity measures.