Europe Reconsiders Golden Visas: A Controversial Return in Hungary

Golden visas have long been a contentious issue within the European Union. These schemes allow wealthy individuals to secure residency rights in exchange for substantial investments. Recently, several EU countries have discontinued their golden visa programmes due to concerns about security, money laundering, and the integrity of the European Union. However, as Spain and other nations phase out these controversial visas, Hungary is set to reintroduce its golden visa scheme, sparking a fresh debate on the matter.

The High Cost of Golden Visas

Obtaining a golden visa requires significant financial resources, making it unattainable for the average citizen. For many, the price of these visas is prohibitively high, which inadvertently turns Europe into a magnet for individuals with questionable wealth and intentions. The primary concern is that these schemes are not enhancing Europe with genuine, long-term benefits but are instead offering a backdoor to those seeking to exploit the system. Golden visas should focus on attracting individuals who can genuinely contribute to the development and prosperity of the region, rather than merely catering to the ultra-rich who already have the means to live and travel freely.

The EU’s Stance on Golden Visas

In recent years, the European Union has taken a firm stance against golden visas and passports. In 2022, the European Commission urged EU member states to discontinue their citizenship-by-investment programs, which provide foreigners with an EU passport in return for hefty investments. The concerns stem from the potential security risks and the possibility of enabling illicit activities such as money laundering, tax evasion, and corruption. The European Commission highlighted that these programs undermine the core values of the EU, posing significant risks to transparency and security.

Countries Phasing Out Golden Visas

Several EU countries have already taken steps to phase out their golden visa programs. Portugal, for example, amended its scheme in October 2022, eliminating real estate investments as a basis for golden visa applications. The aim was to curb property speculation and make housing more accessible to locals. Similarly, the Netherlands ended its golden visa scheme in January 2024. Spain also announced the termination of its golden visa program for real estate investors earlier this year, as part of a broader effort to reduce pressure on the housing market and address speculation issues.

Hungary’s Reintroduction of Golden Visas

Contrary to the trend, Hungary has announced the reintroduction of its golden visa scheme, the Guest Investor Program (GIP), set to commence on 1 July 2024. This decision marks a significant shift in the country’s immigration policy, which had previously discontinued the program in 2017. The new scheme will offer residency through three investment routes: real estate investments of at least €250,000, purchasing residential property worth a minimum of €500,000, or making a donation of at least €1 million to a higher education institution in Hungary. The visa will extend to the applicant’s spouse and dependent children, offering visa-free travel within the EU.

The Question of Value

Critics argue that golden visas primarily benefit the ultra-wealthy, who already possess the resources to live and travel where they wish. It is questionable whether such individuals genuinely require golden visas, as their wealth affords them significant freedom and mobility. Instead, the focus should shift towards attracting people who can provide substantial and meaningful contributions to the European Union. Prioritising genuine innovation, entrepreneurship, and expertise over mere financial investment could yield far greater benefits for the region.

The Future of Golden Visas in Europe

As the debate over golden visas continues, it is clear that the future of these programs within the EU is uncertain. While some countries have taken decisive action to discontinue their schemes, others, like Hungary, are choosing to reintroduce them. The challenge lies in finding a balance between attracting valuable contributions from foreign investors and maintaining the integrity, security, and transparency of the European Union. Ultimately, the focus should be on fostering sustainable and inclusive growth that benefits all residents, rather than catering to the interests of the ultra-rich.