COVID-19 has changed people’s worldview. Chad Ellsworth, who is a New York-based partner at the immigration law firm Fragomen said that “Covid-19 has shown high-net-worth individuals how quickly borders can be closed and stay closed…they’re now seeing value in having a more permanent status in a foreign country”. He thinks that this way of thinking is likely to continue. Other officials in related fields record the gradual inefficiency of the US passport. “Before the coronavirus, the plan mainly appealed to Americans for tax purposes. But mid-pandemic, motivations have shifted.”
In addition, some US citizens who were in relationships, remained separated because of the pandemic travel bans, and their different nationalities. Other US citizens worry about the impact of U.S. politics on their passport’s global standing. This mobility restriction indicates that obtaining more than one passport has become more valuable these days.
Given the current situation, Golden Visa programs for Americans are on the rise.
What Are Golden Visa Programs?
Golden Visa Programs are RBI (Residency By Investment) Schemes. Various countries in Europe introduced Golden Visa schemes in the early 2010s, right after the global economic crisis. Portugal, Greece and Spain have such programs.
Since their inception, these programs saw smashing success. This makes sense as they offer permanent residency, and eventual citizenship, for investors. Other than that, they offer the investor the chance to include their family members, which means your entire family will have permanent residence in Europe. They also offer many benefits regarding taxes such as the DTA (Double Taxation Agreements), which prevents the individual from being taxed on the same income in two countries. Additionally, there’s the NHR (Non-Habitual Residence) in Portugal, which offers great tax deductions and exemption in some cases.
Golden Visa Portugal is among the most popular of these programs. The Portugal Golden Visa alone brought a total of 9,200 main applicants reached with 15,792 dependents accompanying them. These applications directed 5.5 billion Euro of global funds into Portugal.
In a nutshell, these programs are easier ways to gain residency and other side benefits in another country, without being physically there. The data from SEF (Portuguese Immigration and Borders Service) may signal the situation to some degree.
Other Contributing Factors to The Increase in Golden Visas Demand
There are other reasons for the shift as well. US citizens are anxious about the political environment in the country. Also, they can clearly see that the value of the US passport is decreasing day by day. The mobility score of the US passport decreased strongly after 2019. While it was quite stable between 2015 and 2019, it saw an immediate decline from 171 to 81, after the virus invaded the country.
According to a recent Knight Frank global buyer survey, second-home buyers are attracted to how governments handled the Covid-19. Kate Everett-Allen, the head of international residential research at Knight Frank says that “Governments will be looking for ways to attract investment,” adding that fiscal stimulus measures will have to be paid for somehow. “These programs offer one way to replace their coffers effectively.” At this point, Portugal seems to succeed in this. Portugal has handled the process very well with the early strict precautions for the pandemic. The great healthcare system plays a huge part in this. Naturally, this is reflected in its application numbers. While almost all other Golden Visa applications saw a decrease since the beginning of this year, Portugal Golden Visa has survived and continued to get applications.