HEALTHPLAN MAGAZINE

EU member states are told to tighten their checks on individuals who gain citizenship through investing.

The EU Commission has informed EU member states that they must tighten their checks on people who acquire ‘golden passports’, the individuals that obtain citizenship in exchange for a significant investment. The principle for granting residency through investment can be susceptible to money laundering and corruption, the EU Commission has warned.

The warning goes to all EU states. However, there is a particular focus for Spain, Portugal, Britain and Cyprus as these are the countries that have received the highest investment in return for ‘golden passports. Spain receives around €976 million per year for investment visas while Britain receives €498 million annually for the issuing of residency.

EU members use investment schemes to receive foreign investment. Individuals outside of the EU are told that citizenship and residency can be easily bought, much the same as any luxury item. While the EU Commission’s aim is not to prevent the use of ‘golden passports’ they aim to devise a set of common security checks that will be in place by the end of 2019.

The EU Commission aims to take appropriate and necessary action against criminals and corrupt individuals. With the checks in place, they hope to prevent money laundering and tax avoidance in EU states while improving border checks, transparency, governance and security across the Schengen area.

At the moment, the EU Commission calls ‘golden passports’ a ‘weak link’ in the efforts to curb corruption.

They said, “By their very nature, golden visa schemes are an attractive prospect for the criminal and the corrupt,”.

Who buys ‘golden passports’?

While golden passports are available to any individual from outside of the EU, providing they have enough money to meet the investment requirements, typically ‘golden visas’ are issued to Americans, Chinese and Russians. Practises include just residency, citizenship or both in return for an investment.

Buying EU citizenship gives individuals rights such as free movement across the EU as well as access to the single market.

Twenty EU countries actively offer ‘golden passport’ schemes including Malta and Bulgaria. However, Bulgaria has since announced plans to scrap the system. Seventeen other EU countries including Spain and Britain grant residency to investors. As a result, this residency can put investors on the path to citizenship.

Golden passports and residency can cost as little as €13,500. However, some countries such as Slovakia will charge more than €5 million for residency.