Are 'golden Visas' Still The Only Channel For Foreign Investments?

Golden visas are one of the most popular and controversial ways for foreign investment.

Countries like the UK, Australia, Ireland and Portugal have pulled the plug on the issuance of golden visas to rich foreign investors. Many of these countries have cited the infiltration of illicit funds or money laundering through the golden visa programme, hence the need to discontinue it.

However, Indonesia is set to apply a similar programme to attract thousands of foreign investors who could stay there for about 5 to 10 years. What appeals to one person might be unappealing to another. Meanwhile, is the golden visa policy the only way a country could boost its economy with foreign funds?

The facts

Golden visa programmes are designed to attract wealthy and high-net-worth individuals who can contribute to the economy, create jobs, and stimulate growth. They also provide benefits to investors, such as freedom of movement, access to education and healthcare, tax advantages, and security.

Golden visas are a type of residency-by-investment program offered by several countries, allowing foreign nationals to obtain residency rights by making a significant investment in the country, usually in real estate, business, or government bonds.

The arguments

Australia’s Minister for Home Affairs, Clare O’Neil underscored the country was scrapping its golden visa policy that “It has been obvious for years that this visa is not delivering what our country and economy needs.”

There is also the UK which abolished this same policy in 2022 when there were apprehensions about the influx of illicit Russian money in the country’s system.

Downsides of a golden visa policy

The creation of a two-tier system of immigration, where money can buy rights and privileges that are denied to others is also the side of the golden visa policy that pinches many citizens.

Others also argue that the golden visa undermines the value and meaning of citizenship, as some investors may have no genuine ties or loyalty to the country, and may use multiple passports as a convenience or a status symbol.

Alternatives to golden visas

Many propose business visas, which allow foreign nationals to conduct business activities, such as attending meetings, conferences, or trade fairs, for a limited period.

There could also be the issuance of Work visas, which allow foreign nationals to work for an employer in the country, subject to certain qualifications, skills, and quotas.

Investor visas, which allow foreign nationals to invest in a country’s economy, such as in stocks, bonds, or funds, without requiring them to reside in the country could also be another option apart from golden visas.

However, these channels may have different requirements, benefits, and drawbacks for foreign investors, depending on the country, the industry, and the individual circumstances.