Portugal has passed a decree to resume its so-called "golden visa" scheme — a program that issues residence permits to wealthy foreign investors — after it was suspended a few days earlier following a corruption scandal.
The decree to bring back the Residence Permits for Investment Activity (ARI), commonly known as "golden visas," will go into effect once it has been approved by President Aníbal Cavaco Silva.
"It would be a shame for Portugal to miss out on investments from other countries," government spokesman Luis Marques Guedes said Thursday, referring to the 1.46 billion euros ($1.58 billion) in investments the country has received since the scheme was introduced in October 2012.
In order to qualify for the visa, foreign candidates must either buy property in Portugal worth at least 500,000 euros ($542,000), make a capital investment of 1 million euros, or create 30 jobs.
Golden visas are valid for five years and also allow grantees access to the entire 26-country Schengen zone. As a result, some have also dubbed the visa the "EU residency permit."
Introduced by the center-right government of Pedro Passos Coelho in 2012, the program was intended to minimize capital flight and attract investment in the years following the 2008 financial crisis. Eligibility for the visa is checked by the Portuguese Immigration and Borders Service (SEF).
The scheme was suspended last week by SEF head, António Beça Pereira, after a new immigration law passed on July 1 repealed — but didn't replace — some of the visa's provisions, creating a legal vacuum for applicants. The law had been modified in the wake of a major golden visa corruption scandal involving several Portuguese government officials.
A controversial visa
In March 2014, Portuguese authorities arrested a Chinese man whose name was on an Interpol wanted list for tax evasion. The man had been granted entry into the region after obtaining a golden visa through a property purchase in Cascais, a coastal town near Portugal's capital of Lisbon. The incident revealed the lack of safety nets to catch those who would take advantage of the scheme.
In November 2014, Portuguese police launched a nationwide investigation, codenamed Operation Labyrinth, to crack down on corruption linked to the granting of golden visas. Authorities arrested 11 people during a series of raids, including former SEF director Jarmela Palos, who was accused of fast-tracking applications in exchange for bribes. Three other government officials were sentenced in the case, and former interior minister Miguel Macedo was also forced to step down.
As a result of the scandal, eligibility criteria for the visa has been modified and the government has introduced more checks. Applicants are now requested to submit a copy of their criminal record as well as proof that they are up to date with taxes in their home country. Applicants must also now prove they will create 30 new jobs in Portugal, instead of the formerly required 10.
China is the main beneficiary of the Golden Visa, with 1,947 (80 percent) of all visas issued to Chinese nationals. That figure is followed by Brazilians, who have received 87 visas since the start of the scheme, and Russians, who have received 79 visas.
As part of the program, Portuguese residence permits are also granted to the immediate family members of the original permit holder.
Of the 2,420 visas granted since 2012, 95 percent of permits were guaranteed by property purchase, and 5 percent by a transfer of capital. Only three Golden Visas were given in exchange for the creation of jobs.
Alexandre Delaigue, an economy professor at the University of Lille, in northern France, told VICE News that the visas "are not necessarily a bad idea," but described the scheme as a mere "drop in the ocean when you consider the country's actual needs."
Portugal suffered acutely after the 2008 financial crisis, which drove the country to the brink of bankruptcy. The government has been struggling to pay off a massive debt of close to 225 billion euros ($244 billion), which has led to drastic cuts in spending on health and pensions.
"The country is keeping a low profile, it's going from austerity measure to austerity measure," explained Delaigue. He added that the country was also witnessing a mass exodus, with many leaving Portugal in search of fresh jobs and opportunities in the region and elsewhere.
"More and more Portuguese nationals are moving to [former Portuguese colony] Angola, which is in the midst of an oil boom," Delaigue said. "If you're looking for a good example of a European country that's losing its life force, look no further."
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Image of the Portuguese flag via fdecomite/Flickr