Buying an apartment will no longer give you a residence permit in Latvia
Temporary residence permits (TRPs) have been issued in exchange for investment in the national economy since mid-2010. By the end of 2020, 19,000 permits had been issued in exchange for such investments, which have injected 1.55 billion euros into the economy in that period. Most of this money, 83%, has been spent on the real estate market.
National Alliance (Nacionālā apvienība) has fought against the scheme since its introduction and has so far faced reluctance from its coalition partners to make significant changes. Now, however, the government has managed to agree that TRPs will no longer be granted to persons who have purchased real estate of a certain value, interest-free government securities or invested in subordinated liabilities of credit institutions.
Thus, according to the government's plan, only foreigners who have invested their money in companies will be able to obtain a TRP in future. On Wednesday, the members of the Saeima Defense, Internal Affairs and Corruption Prevention Committee were supposed to start working on the draft law, but the Committee did not meet because many of its members were absent - a quorum was not reached.
Asked why the government had finally followed the National Alliance's (Nacionālā apvienība) long-standing calls, the committee's deputy chairman, Edvīns Šnore, representing the National Alliance (Nacionālā apvienība), explained that the Ministry of Economy's calculations showed that the system was no longer worthwhile.
"It is becoming more and more expensive for the state to administer all this than the added value it brings,"
the politician said. This is also evident from the data collected by the Office of Citizenship and Migration Affairs: at the start of the TRP trade program, hundreds of permits were issued per year, but in the first six months of this year the number was only 49.
The downward trend in demand for TRPs is also illustrated by data for 2020 and 2019. In 2020, 107 investor applications were received with an investment volume of 26.3 million euros, while in 2019, 146 TRP applications were received with an investment volume of 33.1 million euros. Real estate investments continue to represent the largest share of investments.
However, these applicants also need to be vetted by the national security services, which have also requested additional funding for this purpose.
The partners of the National Alliance (Nacionālā apvienība) in the coalition have also finally acknowledged that those attracted by the TRP trade program do not contribute to the cohesion of the Latvian population.
"The security authorities have pointed to the fact that around 90% of those who apply for and receive residence permits are Russian speakers from the former USSR republics. They choose Latvia because everything here is available in Russian too - education, services. The authorities believe that this is contrary to those state documents which provide for the unification of our society and for doing so on the basis of the Latvian language. The services see a threat to a united society. We see it too," says Šnore.
His statement is confirmed by the information provided by the Ministry of the Interior that applicants for TRP are mainly from regions with an unstable geopolitical situation and increased risks for attracting capital - high economic and political uncertainty. Approximately 86% of all TRPs have been requested by investors from the territory of the former USSR.
"The National Alliance has proposed all along to end this program. In this case, we see that life forces our partners sooner or later to come to the same conclusions that we have been telling from day one (..) If there is a question of what the outcome of this bill will be and how the Saeima will decide, it is quite clear that the political will to completely end the program is not fully mature in the Saeima," says E. Šnore.