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Golden passports and golden visas: what solutions for the European Union?

European Union Institutions have recently decided to tackle the issue of foreign investors who wish to move in an EU Member State. As a matter of fact, the European Commission has published, on January 23rd, 2019, a report on Investor Citizenship and Residence Schemes (or, respectively, “golden passports” and “golden visas”) in the EU. The aim of this article is to provide an explanation of this phenomenon and its consequences, before exploring different solutions to tackle this issue.

What are “Golden passports” and “Golden visas”?
The Investor Citizenship scheme is defined by the European Commission report as a mechanism “where citizenship is granted under less stringent conditions than under ordinary naturalisation regimes”. Under this scheme, the citizenship will be granted by the State to a person who wishes to invest a minimal amount on its territory (1 million euro in Bulgaria, 2 million in Cyprus, 800,000 euro in Malta). The Residence scheme, instead, will not grant the citizenship but it aims at giving a residence permit to the citizen of a third country, under the same facilitated conditions.
Although “only” three EU Member States provide the possibility of obtaining their citizenship, subject to a minimal investment (Bulgaria, Cyprus and Malta), no less than 20 EU Member States have established an Investor Residence Scheme. And even though this practice has emerged worldwide and quite a long time ago – the OECD had already alerted public opinion on the subject matter in 2018 – the legal and security consequences that such scheme may rise must be emphasised.

EU citizenship and right of residence in the EU: hardly revocable rights
A golden passport granted by an EU Member State allows its holder to benefit from the EU citizenship and all the rights that go with it – and, most notably, the right to move freely within the European Union and establish themselves in any Member State, or the right to vote at European and local elections. This situation, which is associated by the European Commission with high risks in terms of security or tax fraud, is even more delicate in view of the fact that the nationality of an EU Member State is very difficult to revoke under EU law.
Although it does not grant EU citizenship, the golden visa is no less of a problem as a “Schengen visa” allows its holder to move freely within the EU Member States as well, which pose the same risks as the EU passport.

What solutions for a responsible granting of EU passports and residence permits?
Through its Justice programme, the European Commission has recently launched a series of calls for proposals. One of the main objectives of this 2019 Work programme is to support national and transnational projects to promote judicial cooperation in civil and criminal matters, and more especially through the European Judicial Network (EJN). In order to facilitate the exchange of data at bigger scale, it might be interesting to extend the current agreements to other third States for participating to this programme (only Albania and Montenegro are currently eligible as third States under the Justice programme).
As for the EU citizenship, the European Commission also encourages, through its “Rights, Equality and Citizenship”, to raise awareness of the European society (including the public authorities) on the rights that holders of an EU passport have. A call for proposals has been recently published on that specific subject matter, in order to promote and enhance EU citizens’ rights on election matters and to tackle abuse of those rights. The European Commission, which generally aims at promoting the rights that go with the EU citizenship, could then be induced to generalise such mechanism. 

As a conclusion, and even though it Is hard to resist the temptation to grant a passport or a residence permit to third-country nationals whom promise an investment on their territory, such scheme must be organised in a responsible way. It is for this reason that the European Commission encourages EU Member States to adopt the best practices in terms of transparency and good governance. Furthermore, the institution also provides tools that would eliminate the associated risks if they are implemented correctly.


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