Greece expands its immigration investment program to boost demand

By Uglobal Staff

The prospect of living among the history and natural beauty of Greece holds a lot of appeal for those looking for a residency-by-investment opportunity. And that it’s the least expensive property program in Europe is like honey drizzled on the baklava.  

But there are some things to know before relaxing under the olive trees – especially for those hoping to parlay a house into a passport, say those who advise investors.  

To avoid deception and disappointment, follow the guidelines of official Greek websites or those of a reputable firm. Misleading and outright false information regarding what Greece’s program allows is common. 

Greece launched its residency-by-investment program in 2013 in response to the country’s financial troubles. 

“During the last months, there is an increasing interest for the Greek Golden Visa program by real estate investment,” said Alexander C. Varnavas, partner at Varnavas Law Firm 1978 in Athens.  

The country’s Immigration and Social Integration Code allows foreign nationals who purchase real property – residential or commercial – for at least 250,000 euros to obtain a residence permit for themselves and members of their immediate families, including married spouses and children up to age 21, according to Enterprise Greece, part of the Ministry of Economy & Development. 

Any number of properties can be combined to reach the minimum, and multiple buyers can invest jointly in one property. 

Permits are also granted to those who lease hotel accommodations or a furnished tourist residence for at least 10 years.  

In both cases, the full amount must be paid upfront. If the owner sells the property, the residence permit is withdrawn. The permits are issued for five years, with the possibility of multiple renewals. Property owners are allowed to rent out their property. 

Interested parties must first apply to the Greek consulate authority in their home country for an entry visa, submit travel documents and pay a 500 euro fee. 

In May, the government announced an expansion of its program, offering residency permits to those who invest at least 250,000 euros in bonds and investment fund shares. The new opportunity sprung from Greece’s participation in the “Silk Road” summit of 30 worldwide heads of state. 

This change is expected to boost demand, agreed Christos Th.Vardikos, attorney with Vardikos & Vardikos in Athens.  

Greece also grants residence permits to foreigners whose investments are characterized as strategic investments – “investments that will have a positive impact on national development and economy.” It allows up to 10 people, including the investors, to enter and reside in the country to launch and run the investment, if deemed necessary. Those permits, which include family members, are for 10 years and are renewable. 

Sectors the government considers most attractive for investment are: tourism and real estate, food and agriculture, renewable energy sources, technology, environmental management, export-oriented manufacturing and life sciences, according to Enterprise Greece. 

The residence permit allows the holder to travel freely within the Schengen area, an area comprising 26 European states that have officially abolished passport and all other types of border control at their mutual borders. 

The permit does not carry the right to work in Greece, except as a chief executive officer or shareholder. Permit holders have access to public education. 

The permit also does not convey citizenship. It does allow the foreign national a path to long-term residence status, however, which is one of the prerequisites for applying for naturalization.   

Because Greece started its Golden Visa program in 2013, no investors have spent the seven years in the country required to apply for citizenship. 

“If a pure citizenship program is launched, the flow will boost,” said Vardikos. 

It doesn’t take much online surfing to find promises of Greek citizenship to those investing in the country. Such offers are “destined either to deceive investors or provide them with ‘travel documents’ based on an ‘invented’ Greek ancestry,” Vardikos said. Both options are against Greek law, he points out.  

Greece has experienced well-publicized financial struggles in recent years, coming close to expulsion from the European Union over its high debt levels. The residency-by-investment program has helped bring in much-needed revenue to the country – $1 billion euros from 1,684 visas, according to a June estimate by the government. 

It has also lowered the cost of real estate to “very affordable levels for a first entry investor in Greece,” Vardikos said.  

For 250,000 euros, a buyer can acquire a new residence of about 80 to 110 square meters with two to three bedrooms – or a larger pre-owned residence, according to Johannesburg-based Monarch & Co., which offers clients immigrant investor programs for residence and citizenship. 

The country’s financial instability still concerns some advisers to high-wealth individuals, however. Henley & Partners’ Global Residence Program Index 2015, which rated 19 residency-by-investment and seven citizenship-by-investment programs, ranked Greece’s program No. 18. The firm, which advises wealthy clients on residence and citizenship planning, anticipated continued insecurity in the country. 

The Greek program has some advantages over those of its European neighbors, said Varnavas. It allows the holder to travel in the Schengen zone without any visa requirements, unlike Cyprus’ residency program. It offers a five-year permit with no minimum-stay requirements, unlike Portugal, which offers a renewable one-year permit with required stays of seven days during the first year and 14 thereafter. Greece’s minimum investment of 250,000 euros is also less than that of Cyprus and half that of Portugal and Malta, which requires proof of stable minimum income or capital. 

According to data collected by the government of Greece through April 30, a total of 3,809 residence permits were granted to Golden Visa investors and family members after 1,684 real estate transactions. The biggest sources of third-country investors were: 701 from China; 357, Russia; 84, Egypt; 81, Turkey; 79, Ukraine; 78, Lebanon; 53, Iraq; 45, Syria; 37, Jordan; and 16, Saudi Arabia. 

High-wealth and ultra-high-wealth individuals seek exclusive properties that can be rented out on a seasonal basis, mainly in the islands, said Vardikos. Other investors purchase a portfolio of properties, ranging from 50,000 to 100,000 euros. 

The applicant needs to buy the property in Greece before applying for the residency visa, which takes about 40 days to process. Greece taps buyers with a 24 percent value-added tax on property, and government, notary and lawyer fees for the real estate acquisition and visa application total about 15,000 euros.