A new Latvian law that provides residency rights to foreign investors has provided a boost to the real estate market and nationalist sentiment alike, the BBC reported.
The new amendment to the Latvian Law on Immigration came into force in July, 1, and allows foreign investors and their family members including those from non-EU countries to receive a 5-year residence permit in Latvia along with the right to travel in the Schengen area freely, if they purchase Latvian property of at least 70,000 euros (US$95,000) in value, or invest in a business.
“The meaning of the amendments is to encourage investment in Latvia, to attract investors. We wanted to make sure that people who in one form or another contribute to the economic development of our country have more opportunities to obtain a residence permit,” Boris Tsilevich, deputy of the Saeima (Parliament) of Latvia explained to local press.
The volume of investment in one of Latvia’s companies has to be at least 36,000 euros. The minimum amount of paid corporate taxes has to amount to 28,000 euros per year.
Although the law does not give investors the right to work anywhere within the European Union, they can still enjoy the freedom of movement within all 25 EU countries in the Schengen zone.
Before the amendments, the foreigner could actually get a temporary residence permit in three cases: if he/she learns in Latvia, running (in which case the employer had to justify why he needs a foreign worker), and for family reunification purposes.
Since the law was introduced in July, it has already given the property market a boost. “In essence the whole initiative restarted the real estate market in Latvia,” apartment building owner Kristaps Kristopans said to the BBC.
“One year ago it was completely dead. No transactions. Nothing. And now a lot has changed. Sales are picking up nicely.” According to him, almost all his buyers are Russians who have been attracted by the Latvian residency permit offer.
According to Latvia’s immigration authorities, more than 100 foreigners have already applied for the rights after purchasing property or investing in business in Latvia — all of them from the former Soviet Union.
Robert Zile, a Latvian member of the European Parliament, agrees with the opponents of the new law and says the influx of Russian investments will increase Moscow’s influence in the country.
Along with other protesters, members of the Latvian National Party think the incentive to foreign buyers will inevitably increase prices, making real estate unaffordable for locals.
“The government is trying to sell our country. They do not bother to think how to bring back Latvians who left the country,” said Hardis Paradnieks, one of those opposed to the new law.
In response to fears, the government says that all applicants are thoroughly checked out before being awarded residency rights, and forbids cash payments to prevent money laundering.
In addition to their contribution to Latvia’s economy, foreign investors as well as other categories of residence seekers must pass an examination on Latvian language. “Actually it is the exam to the lowest category, i.e. candidate for permanent residence must speak the language to a bare minimum,” said Tsilevich.
Meanwhile, the local banks are offering the useful assistance to their new customers, who’ve been provided the possibility to conclude deposit placement agreement within one day without requiring coming in to Riga.