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There are fears that the Latvian immigrant investor programme may close after one of the parties in the country's ruling Coalition called for it to be scrapped. A spokesman for the right wing National Alliance said that his party believes that the permit scheme is pushing up the price of property and so making it unaffordable for ordinary Latvians to buy property.
The immigrant investor programme was opened in July 2010. It enables foreign nationals from outside the European Union who invest in Latvia to obtain a Latvian temporary resident visa.
When it was introduced in 2010, some in Latvia credited the scheme with reviving the Latvian property market where prices had been depressed since the financial crisis of 2008. One Riga estate agent, Kristaps Kristopans told the BBC in 2011 business was booming having been 'completely dead' before the scheme was opened.
Latvian nationalists opposed the schemeHowever some Latvian nationalists have opposed the policy, fearing that it was likely to lead to increases in property prices throughout Latvia, especially in Riga, and so make it more difficult for Latvians to afford to buy property.
Sanwar Ali of workpermit.com, who knows Latvia well, says 'Property prices in Latvia started to rise in 2004 after Latvia joined the EU. There was a fall in prices after the financial crash of 2008 before prices started to rise again in 2010.
'Prices are still lower than they were during the boom years. There has only been a small increase in Latvian property prices since the immigrant investor scheme was introduced. The Latvian immigrant investor scheme has attracted much needed foreign investment to Latvia'.
Suspicion of Russians in LatviaIn addition, some were concerned at the idea that Russians should be able to gain temporary resident status by purchasing property in Riga only 20 years after Latvia gained independence from Russia and only 12 years after Russian troops finally left Latvia in 1998. Latvia has been controlled by Russia for much of the last 300 years and has been invaded by Russia on several occasions. Many Latvians today still have a strong mistrust of Russians.
Robert Zile, a Latvian MEP, warned that the permits would be used by Russian criminals to gain access to the Schengen Area. He said 'We are selling residency rights in the whole Schengen Area, not just in Latvia. They (Russian criminals) are more interested in other countries. They will not reside here. It could be more of a worry for other countries, not for Latvia.'
After the 2011 Latvian general election, the National Alliance, a nationalist party, formed a government with the centrist party Unity and the Zatlers Reform Party. Now, the National Alliance says that it wants to see the policy scrapped.
Permits are valued too cheaplyOther government figures have criticised the programme for another reason; they say that the scheme values Latvian temporary residence permits too cheaply. Both the Prime Minister, Valdis Dombrovskis, and the Finance Minister Andris Vilks, say that the minimum qualifying investment, at 25,000 Latvian Lats (LVL) ($47,357, €35,590) is too low. They are calling for it to be increased.
In order to qualify, non-EU nationals must invest in Latvian property or business. The minimum qualifying investment levels are as follows;
- 100,000 LVL ($189,430, €142,356) in buying property in a Latvian city
- 50,000LVL ($94,715, €71,178) in property anywhere else in Latvia
- 25,000LVL ($47,357, €35,590) in shares in a Latvian business which pays at least $20,000LVL in taxes annually, has at least 50 employees. Annual turnover must not exceed 7000,000LVL ($13,260,000, €9,965,382)
- 100,000LVL in any other Latvian business
- 200,000LVL in a Latvian credit institution
Permits last five yearsThose who make a qualifying investment are then able to apply for a Latvian temporary resident permit. These permits last for five years. Every year, a permit holder must register with the Latvian immigration department. When your permit expires, you can apply for another one, providing you still hold a qualifying investment in Latvia.
The permit costs 70LVL and should take no more than 80 days to issue. If a higher fee is paid, the permit will be processed quicker. If you pay 220LVL, your application should be processed in 5 days.
A Latvian temporary resident permit allows you to live and work in Latvia. It also allows you to travel freely within the Schengen Area in Europe. With a permit, you are allowed to spend up to 90 days in every six months in the Schengen Area.
Scheme may close or minimum investment may be raisedSanwar Ali of workpermit.com said 'While it is possible that there will be some kind of compromise, there is definitely a danger that this scheme may be closed. Even if it does not close, it is almost certain that the minimum qualifying investment will be raised.
'If you have ever thought of applying under the visa scheme, you should do so as soon as possible. The opportunity may not be there for too long. Depending on your circumstances there may also be other cheaper options for gaining Latvian residency'.