Golden Passport

The European Union Commission has announced that it is in the process of creating a special team to more closely monitor schemes known as “golden passports”. A “golden passport” refers to a passport offered by an EU member country in exchange for investments. These passports are given to non-EU nationals in order to obtain citizenship in an EU country. As newly-instated European Union nationals, these wealthy investors gain access to many benefits, such as going more quickly through customs when traveling between two EU member countries and a shared currency among all European Union countries. In many cases, golden passport schemes advertise these benefits.

Not only are “golden passport” schemes a concern, but “golden visas” have also gained traction among countries in the European Union. “Golden visas” are similar to golden passports in that, in exchange for large investments, residence is granted. These schemes are dangerous, according to the European Union Commission, because they allow for money-laundering and tax evasion. Twenty EU countries are participating in either golden passport or golden visa schemes. Multiple European Union member countries are actively attempting to attract investors. For example, Cyprus is making a particular effort to bring in Russian investors who are looking to invest in exchange for citizenship. Other countries, such as Malta and Bulgaria, are also offering opportunities to invest in order to gain citizenship. Passports in Bulgaria, Malta, and Cyprus can be bought by wealthy foreigners for one (about one million one hundred thousand U.S. dollars) to two million euros.

Bulgaria, Malta, and Cyprus also offer golden visas, as do seventeen additional countries. One of the EU member states involved in a golden visa scheme is the United Kingdom, which, along with the previous countries mentioned, by providing investors with visas, also provides them with a beginning step on the path to citizenship. Acquiring residence rights has become an even larger problem as far as the amount of money involved than obtaining citizenship through these schemes. In Croatia, residence is gained with investments of around thirteen thousand five hundred euros, whereas in Slovakia and Luxembourg, foreigners must pay upwards of five million euros in exchange for residency.

The European Union Commission has identified the problems specifically that it must address regarding golden passport and golden visa schemes. One such problem facing the EU now is the fact that golden passports and golden visas open up opportunities for tax evasion. The EU Commission plans to combat this issue by increasing the monitoring and reporting of tax evasion incidents in order to prevent rich investors from gaining tax advantages through their new citizenship in a country.

Another problem that the EU Commission plans to specifically address involving golden passports and golden visas is the issue of money laundering. The problem arises in that EU money laundering laws are being avoided by investors. The EU Commission will combat this issue with “due diligence”. In other words, they will administer extra checks to ensure that people who invest in countries in exchange for citizenship or residency must abide by money laundering laws.  

The next issue the European Union Commission will face head-on is security. The EU has centralized information systems, such as the Schengen Information System, aimed to run checks on those applying for citizenship or residency. The EU Commission has determined that these methods of checking have not been used systematically enough and that other checking methods used by individual countries are not strong enough. The EU is also concerned about the lack of information it has on golden passport and golden visa schemes. They have limited knowledge about how countries go about running these schemes, such as how they go through the process of rejecting or accepting applications for citizenship or residency, where the applicants are from, and how many applications countries are receiving. In addition, EU states have not been keeping each other informed about applicants.

Countries outside of the EU are also participating in these schemes. The European Union is keeping close watch on some of these countries, which are looking to possibly join the EU in the future. For example, Moldova, which is close to EU member state Romania, is looking to become a member state of the European Union despite the fact that it participates in schemes similar to golden passports and golden visas. Moldova is so near joining the EU that their citizens are currently able to travel to the EU for short amounts of time visa-free.

As far as how many of these golden visas have been granted per country, Hungary, Latvia, Spain, the UK, and Portugal have given out the most golden visas, including visas given out to both the investors and their families. Cyprus, Malta, and Greece are the countries that have given out the most visas to those who invest heavily in their countries, according to an October report done by the anti-corruption group Transparency International.