Sanita Jemberga and Inga Spriņģe's
article at
EurasiaNet examining how Latvia's program offering well-heeled immigrants residency status is attracitng many people from across the Soviet Union, and how this is causing some concern.
The Latvian capital is an hour and a half’s flight from Moscow. The majority of the people speak Russian. But the main attraction for Latvia’s “residency for property” program was, until recently, its relative cheapness compared with similar “golden visa” programs in Europe. For an investment as small as 70,000 euros, foreigners could obtain a five-year Latvian residence permit, enabling free travel throughout most of the European Union.
During the five years of the program’s existence, 13,518 foreigners have obtained residence permits. Unlike similar programs in other European countries, 90 percent of Latvia’s applications have come from citizens of the former Soviet Union, mainly Russia. Over 10,000 Russians have obtained Latvian residency under the program.
For almost a year Re:Baltica, in collaboration with EurasiaNet.org and the Organized Crime and Corruption Reporting Project, collected and cross-matched information from Land, Property and Business Registries in Latvia and analyzed the 315 most expensive real estate deals in Riga and Jūrmala involving foreign investment. The purpose was to obtain a full picture of the people who, during turbulent times in Ukraine and the growing standoff between the West and Russia, have opted for Latvia’s ultra-cheap “golden visa” program. The investigation also strived to determine the origin of the money used to buy properties.
The investigation revealed that over the past year, a majority of buyers of real estate came from Russia’s middle class. The number of applications grew rapidly after the start of the pro-European protests in Ukraine and Russia’s subsequent annexation of Crimea. Twice as many people from Ukraine applied in 2014 as had in the previous year. The wave from Russia picked up after Putin was re-elected president in 2012, and continued at almost the same level last year.
[. . .]
Officials in Riga have a hard time determining the extent to which dark money is used to purchase property in Latvia, a country with a banking sector that has a reputation for being a gateway to the EU for oligarchs from the former Soviet Union. Money laundering has been an issue in the past. In 2013, Latvian regulators fined an undisclosed bank for laundering money in a case connected to Russian whistleblower Sergei Magnitsky, who died in official custody in 2009.