Golden Visas — Long a Way for Investors to Live Large Overseas — Face Global Backlash

Money, and millionaires, remain on the move.

An estimated 128,000 millionaires are expected to relocate internationally in 2024, eclipsing last year’s record of 120,000, according to Sarah Nicklin, head of public relations at Henley & Partners, a British-based global advisory practice for investment migration, which has raised more than $12 billion in foreign direct investment since its founding in 1997. COVID-19 was a huge driver — Nicklin said the firm’s applications to help facilitate this kind of relocation jumped 60 percent between 2020 and 2021 — but the search for a safe haven amid uncertainty remains the key driver.

Enter so-called golden visas, residency-for-investment opportunities that often involve real estate and that have become much more popular in a tumultuous geopolitical environment. These programs have been central to investment and development schemes around the globe, buttressing high-end residential projects, financing new additions to urban skylines, and helping channel wealth into foreign housing markets. They’re much more common than one may think: 100-plus countries — including 19 of 20 G20 members, a group that includes most of the world’s largest economies, and all 27 members of the European Union — offer some kind of residency enticement for investment, such as Portugal’s very popular program.

“Some people seek a second residency or citizenship as a Plan A for relocation, while others see it as more a Plan B for future security,” said Murat Coskun, founder and managing partner of Get Golden Visa, a company that does exactly what it sounds like. “Even people from stable countries are looking for options.”

Roughly 10 to 15 percent of investments for attaining golden visas are in commercial real estate, added Coskun, often hospitality projects, student housing and other niche asset classes with a pretty clean return on investment.

He’s seeing buyers seeking answers to political instability, economic uncertainty, social unrest, inflation, global warming, and even tax planning. A quarter of his clients right now are Americans, many anxious about the impact of the current election season, some seeking a different way of life after becoming disillusioned with life at home.

But a raft of policy shifts — including pushback over fears of overheating already-expensive housing markets and cutoffs of global capital that support these golden visa programs and the projects they support — have put them in serious trouble. Portugal earlier this year stopped the real estate option, only allowing visas via putting money into investment funds. The European Commission has put heavy pressure on nations like Malta and Greece to restrict and change their programs, said Coskun.

The Spanish government, which has issued nearly 15,000 such visas, has announced plans to terminate the program this spring, in response to fears of more speculative investing and its impact on Spain housing prices. Stories of Chinese buyers, briefcases of cash in hand, arriving in Greek cities and buying up blocks of flats has soured many locals there.

In the United States, the EB-5 program (the American version of the golden visa, more or less) has entered a period of uncertainty itself, after being a central funding source for megaprojects such as Manhattan’s Hudson Yards and the Wharf in Washington, D.C. In 2022, when the program was last reauthorized, congressional efforts to reform the fraud that had seeped into the residency-for-investment program led to reforms, a larger focus on rural investments, and the creation of an integrity fund, paid for by the so-called regional centers, or firms authorized to develop and invest EB-5 money.

But, in recent months, due to slow federal rulemaking, and a lack of clarity around paying mandated fees, letters of termination have been sent to many investor groups for late payments.

This confusion jeopardizes what has been a significant source of real estate investment in the United States, and even mezzanine debt funding for large commercial projects. Some $2.2 billion of EB-5 funds arrived in 2023, and $2 billion in just the first half of 2024 alone.

The Golden Visa concept originated in the 1980s, when the king of the Pacific nation of Tonga began selling passports to Chinese businessmen. Perhaps the modern fascination took hold in the 2010s, after a number of sought-after European nations, such as Greece and Portugal, instituted such programs to help recover from the financial austerity following the Great Recession. Coskun said they remain the ones his clients favor. These destinations remain the most sought after, so much so that they’ve led some countries to curtail or begin to halt such investments. 

However, there’s still growth in these kinds of investments, despite a wave of pushback around the impacts these projects have on local housing prices and availability that’s been viewed as a globalized form of gentrification. In many countries and cities, developers will price projects to meet the minimum investment level needed to obtain a visa, a price often multiples of what an average local buyer can afford. 

Tim Rodland, a Bahamas-based CEO and broker at Rodland Real Estate, has worked out of Nassau for the last 15 years, focusing on high-net-worth individuals and off-market listings. Residency by real estate investment in the Bahamas, which starts at $750,000 now for permanent residency but will increase to $1 million next year, has shown no sign of decline, offering a financial and lifestyle benefit for big buyers. While commercial properties aren’t the focus — most buyers focus on beachfront living — Rodland often sees investors start with a home, and then make their next investment in commercial real estate, broadening their initial parlay with a yield-generating property.

It’s clear developers in countries with these programs have focused their development plans to tap into this potential investment pool. This means focusing on high-end residential, including condos, and using it as an anchor or underwriting advantage to finance larger mixed-use projects. In Greece, the massive mixed-use Ellinikon project, which is redeveloping an abandoned Athens airport, may sell 40 percent of its 8,000 residential units to foreign buyers, many of whom will be looking for a golden visa.

Henley & Partners’ Nicklin believes that governments ultimately won’t shy away from these programs, which can be powerful tools to strategically attract wealth, talent and capital, a means to hoover up autonomous avenues of foreign investment without relying on debt-driven financing.

It’s also truly a global phenomenon, said Kristin Surak, a sociology professor at the London School of Economics and Political Science and author of “The Golden Passport: Global Mobility for Millionaires.” The most popular programs are actually in the Global South, including places like the United Arab Emirates, Malaysia, and Panama. While the U.S. hands out about 10,000 golden visas annually, the UAE hands out 50,000.

The choice and variety of options has meant some of Nicklin’s wealthier clients have actually collected a portfolio of different residency and citizenship options. There’s simply too much choice.

“If competently implemented, investment migration frameworks can contribute significantly to the well-being of local citizens while yielding the host state a wealth of development benefits,” she said. “As such, we believe the number of programs will continue to grow and expand.”

Update: This story has been updated to clarify that the Bahamas’ residency requirement is currently $750,000 and will increase to $1 million next year.