The EU Commission has revised investor citizenship and residence schemes in the EU for the first time in a bid to combat principle concerns over tax evasion, EU security, and corruption. This is the first time that the European Commission has presented a comprehensive report on this topic.
At present, foreign nationals who become a citizen of one of the 28 member states of the EU will also be granted EU citizenship. Although, no EU country has the same policy on investor citizenship or residence schemes. Hence the European Commission’s decision to review the policy on a more international basis, analyzing the impact and risks on the EU as a whole.
In some European countries, those who make a significant financial investment to the state are entitled to residency and country citizenship depending on the amount of money invested. The type of financial investment includes property and government bonds, amongst other types of investment.
The European Commission has demanded more transparency regarding the national laws set by each EU member state. Many have argued that the current schemes and policies add to problems of corruption, money laundering, and tax evasion.
“Golden Visas” Investor Citizenship in the EU
The term “golden visas” has been used significantly as an international term labeling visas given in exchange for large investments. At present, there are three member states of the EU that operate this type of scheme without any obligation of prior connections or physical residence: Bulgaria, Cyprus, and Malta. This has become a concern amongst EU policies, given that anyone who is granted national citizenship of the aforementioned countries is automatically granted access to European rights, such as free movement and access to the EU internal market.
The following topics of concern have been discussed by the European Commission:
- Tax evasion
- Money laundering
- Transparency and information
The European Commission has discussed how due to the concerns mentioned above, centralized information such as SIS (the Schengen Information System) is not being used as efficiently as it should be. There are also reports of tax evasion, as some of these schemes are given privileged tax rules, and anti-money laundering checks need to be enhanced. This will also aid future operations and security systems that are due to be implemented, such as the ETIAS visa system.
The Commission wishes to improve the monitoring of such schemes as there are 20 EU countries that have various schemes regarding investor citizenship and residency schemes.
The 20 countries that run such schemes are:
Bulgaria, the Czech Republic, Croatia, Italy, Cyprus, Spain, France, Estonia, Ireland, Greece, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, and the United Kingdom.
Overall, the report has been said to find a lack of clear information regarding the schemes operated by various European member states. The European Commission wishes to improve the monitoring of all residence and investor citizenship schemes following the first report made on January 23, 2019.