The World Economic Forum defines globalization as “the process by which people and goods move easily across borders.” To that regard, people travel across borders offering their labour, their investments and their ideas in markets that can provide opportunities unavailable in their home countries.
With the keyword in the aforesaid definition being “easily” the necessity of free movement has been captured by countries and their governments around the world and led them to facilitate this movement by offering permanent residence rights to non-natives in return for their private investment funds that would ultimately contribute to the host country’s market.
The first roots of the so-called Golden Visas have been traced back to the 1980s when states that were known to be “tax havens” in the Pacific and the Caribbean launched "cash-for-passport" programs that facilitated visa-free travel and provided tax advantages.
Nowadays more and more countries offer Investment programs that lead to Residence or even Citizenship with different requirements and various standards but ultimately with one common goal.
To boost their economies by the foreign investments funds that flow into the country’s registers.
Greece, of course, is not an exemption. A country that has been trying through the years to strengthen its economic status and attract investment funds could not miss out on this opportunity.
The Greek Residency-by-Investment (RBI) program commonly known as Golden Visa has been officially launched by the Greek Government back in the summer of 2013. When first launched it had only one main investment option and that was the purchase of property or properties with a minimum value of 250,000 EUR. The program offers a five-year residence permit for non-EU-citizens and their dependent family members which can be renewed after the aforesaid period by simply maintaining property investments that add up to the value of 250,000 EUR.
Although the program had a slow start in the first few years following its official launching it made quite an impact in 2017 and has hit its peak point during 2019. Taking a glance at the statistics (see Board 1) it is obvious that the residence permits that were issued via the Golden Visa program during the year 2018 alone were almost equivalent to the number of permits issued during the initial three (3) years of the program’s activation (2013-2016). Moreover, during 2019 the same number has been almost doubled exceeding all expectations.
Statistics demonstrate the continuous upward trend of the Greek residency-by-investment program that in our days classify it to one of Europe’s most advantageous and competitive ones.
The privilege of free access to all Schengen zone countries and the attractive real estate opportunities that Greece has to offer are surely among the main reasons for its success.
This combined with the fact that, as far as property investors are concerned, the investment amount for the purchase of property in Greece is one of the lowest in Europe, places Greece in a privileged category in relation to other countries.
As we have reached the new decade, Greece, and more specifically its new elected government, is realizing the power deriving from the program and is considering other ways to fortify and expand it.
Back in 2019, the government has made some significant amendments in order to offer more options to potential investors. New products that lead to the same residency rights have been launched that include larger-scale investment options mainly in government bonds, fixed-term deposits and shares.
You can find below a brief list of the new featured options that Greece offers to the Golden Visa investors:
a) Capital contribution for the purchase of shares in a share capital increase or bonds with the contribution of the capital of at least 400,000 euros when issuing a bond loan of undertakings with a registered office or establishment in Greece which are listed on the Greek stock exchange.
b) Capital contribution of 400,000 euro at least to a real estate investment company, which invests exclusively in Greece for the acquisition of shares in the increase of the share capital.
c) Capital contribution of at least EUR 400,000 to a venture capital company for the acquisition of shares or to a mutual venture capital for the acquisition of shares with a prerequisite to investing exclusively in companies with a registered office and/or establishment in Greece.
d) Purchase of Greek government bonds with an acquisition cost of at least 400,000 euros and a residual duration at the time of purchase at least three years, through a credit institution established in Greece.
e) Term-deposits of a minimum amount of EUR 400,000 at a Greek Credit Institution, of at least one-year duration, with a standing order for renewal.
f) Purchase of shares, corporate bonds and/or bonds of the Greek state which are admitted to trading or already traded on the Greek stock exchange. In this case, the acquisition cost must be at least EUR 800,000.
g) Purchase of shares with an acquisition value of at least EUR 400,000 in a mutual fund which is incorporated in Greece or another country and invests exclusively in securities (shares and corporate bonds or bonds of the Greek state) imported for Trading or negotiating already on the Greek stock market. The amount of the Fund's assets should be at least EUR 3 million.
h) Purchase of units or shares with a minimum purchase value of EUR 400,000 of an Alternative Investments Fund established in Greece or another country of the European Union, which intends to exclusively invest in immovable property in Greece
Those options are very recently introduced so naturally there haven’t been broadly tested yet so it remains to be seen whether they will eventually have a significant contribution to the success of the program as they apply to a few selected High-net-worth-individuals.
It goes without saying that the indisputable main pillar of investment options is and will be the real estate purchase. As Franklin D. Roosevelt has said “Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world.”
We share the same thought and strongly believe that investing in real estate will always be the wisest choice for any potential investor. Buying real estate is a safer, more straightforward, and concrete investment compared to the immaterial investment options.
Following the launching of new investment options the Greek government has gone a step further and made several changes during the past year aiming to facilitate the procedures that lead to the issuance of the Golden Visa residence permits and make things easier for the applicants/investors.
For starters, the government has given the “green light” in order for applications to be submitted to any Immigration Office throughout the country. This has mitigated the problem that was created by the previous limitations that applied which only allowed the investors to apply for their residence permits to the corresponding Immigration Office that the property purchase took place.
As one can imagine the “popular” Immigration Offices which were naturally placed around the capital city of Athens were so heavily overcrowded during the past two years that could no longer accommodate application appointments; at least not within a year’s period. This lack of fast processing has been a great limiting factor that could easily discourage any potential investor from getting engaged in such a time-consuming process and lead him to other competitive European programs.
Thankfully, that problem has been overcome by the recent amendments and nowadays we can actually speak about a “fast-track” residency program by following the alternative route described above. Of course, there is always room for improvement to further “defeat the monster of Greek bureaucracy” and this is also well known to the Greek Government which seems determined to make the best out of this program by identifying the faults and the reforms necessary to end those faults.
One of the suggestions that our law firm has already shared with the current Greek Government is the creation of separate Immigration Offices that would be dedicated to serving only investors and their family members. This would definitely decongest the crowded Immigration Offices and upscale the Golden Visa program by offering more flexibility and fast procedures to the investors.
Furthermore, the Greek Government has announced the suspension of the 24% VAT that applied to newly constructed real estate which was also a limiting factor for investors looking to buy new or unfinished properties. The relevant official bill has been put into effect almost two weeks ago. This will certainly broaden the real estate options of the investors and at the same time, it will give a significant boost to the Greek construction field.
There are more ongoing projects related to the attraction of new investors that have already been set in motion.
For example, the reshaping of the area of Hellinikon (known as the “Hellinikon Project”) is one of the most ambitious development projects ever undertaken in Greece. The development of the Metropolitan Park along with the upgrade and restoration of the coast are the main aspects of the project.
The Hellinikon project is expected to make a great impact on the Athens Riviera and have a greater positive influence on a much wider area. The region's revitalization program has been designed to positively influence the local, regional and national economy, adding significant new investments, employment opportunities and new impetus to development in key areas such as tourism, culture, entrepreneurship, research and the environment. To sum up it is a promising investment project that will ultimately have positive effects on the national economy by creating new investment opportunities.
So what comes next regarding the expansion and optimization of the well-established Greek RBI program?
As previously mentioned there is always room for improvement that will attract even more foreign investors to apply for the Greek program.
One of the main concerns of the Greek Government is decentralizing the real estate purchases by giving motives to investors to buy properties outside of Athens. A quite reasonable approach that if eventually gets realized would also offer more options to investors and would lift the weight off Athens which is nowadays the “king” of real estate sales related to the Golden Visa applications. According to the statistics almost 90% of the real estate purchases related to the Greek Golden Visa were made in Athens.
Although the main advantage that the program offers is the free movement across the Schengen Area borders and that has been the primary goal for a large proportion of its applicants, things have slightly changed as time goes by. An increasingly considerable part of the applicants are not only aiming to travel across Europe with no extra visas and passport stamps or gain a return out of their real estate investment. They are actually willing to reside in Greece permanently or at least for an extended period of time.
To take it even further there is actually a significant number of entire families that consider the option of moving in Greece permanently for a variety of reasons. Others are aiming for better life quality or as a retirement plan but either case those people are not just passing by. They are here to stay. And some of them are actually going many steps forward and consider how they can obtain the Greek citizenship in the long run.
Taking that into consideration along with the facts that the Golden Visa does not grant working rights for its holders and the acquisition of the Greek citizenship is a demanding and long-term procedure, kind of limits the attractiveness of the program for that specific investing audience. We expect that in the next few years citizenship will be granted with faster procedures and less demanding requirements.
Based on the fact that the Greek passport is ranked among the 10 strongest passports of the world, (Greek citizens enjoy visa-free or visa on arrival access to 183 countries and territories, ranking the Greek passport 6th in terms of travel freedom) perhaps the new era of the Greek Golden Visa should be focused on the expansion of the program that would somehow include the citizenship option as part of a separate or further investment.
It is our belief that this is an option to be taken into consideration by the Greek Government as it would open up a whole new competitive investment frame for the country.