Why Did Greece’s Golden Visa Performance Fall So Far Behind Portugal’s in 2020? Two Experts Answer

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Last week, IMI reported that European golden visa rivals, Greece and Portugal, had shown starkly different performances in pandemic-year 2020: While Portugal’s approval numbers ended the year just 5% below their 2019-level, those of Greece were down by almost 90%.

Prior to the pandemic, the Greek golden visa had been on a seemingly unsuppressible upward path that saw it approve nearly three times as many applications in 2019 as its Iberian peer.

To understand why the same program fell so distressingly short of Portugal’s in 2020, we asked two prominent Greek golden visa advisors – Alexander Varnavas of Varnavas Law Firm and Panos Rozakis of Prime Synergy Greek Residency – for their diagnosis of what went wrong, what’s been done to mitigate the problems, as well as when and whether such measures will prove effective.

What were the most important policy changes for the Greek program in 2020, and how are they expected to aid in the program’s recovery?

Varnavas: We have seen many improvements. First of all, we have started to work with the new financial options. We are pleased to be the first law firm that submitted an application based on a EUR 400,000 term-deposit bank account.

Moreover, the Government has enabled remote submission of the application, which means that the investor does not need to enter the country to submit his application. Still, he can do that with the support of a lawyer holding a Power of Attorney.

Simultaneously, a special department has been established at the Ministry of Immigration Policy to accept golden visa applications during the lockdown. Last, but not least, the Ministry of Immigration has started to accept minors as the main investors, which gives even more options to many families. The golden visa investments are usually child-focused, giving the parents peace of mind, knowing that their kids will always have a second residence.

Rozakis: Three major changes happened in 2020 to facilitate the investment immigration market:

1. Remote purchase of a property;
2. remote application through proxy;
3. and the introduction of three distinct offerings for tax residency:
   1. The fixed tax of EUR 100,000 for High-Net-worth Individuals who transfer their tax residency to Greece;
   2. 7% flat tax rate for pensioners who move to Greece;
   3. and 50% tax discount to professionals who become fiscal residents in Greece.

The new administration is very aggressive in utilizing reforms that will attract investors (missing from previous years). We are looking forward to the post-pandemic days to see how the changes will perform.

Why, even with these changes, were the 2020 figures so disappointing and why has Portugal been able to navigate the pandemic with less of a loss to its golden visa program than Greece?

Varnavas: The number of approvals has nothing to do with the program; only with the Covid-19 travel restrictions. Most of the applicants in Greece are from China, Turkey, and EMEA countries, and people from those countries could not travel to Greece to give their biometrics and conclude the process due to the long quarantine periods both in Greece and their home countries.

Moreover, the number of approvals during 2020 is connected to the concluded applications submitted before the pandemic, including biometrics collection. Before the global lockdown, back in March 2020, Greece had few pending concluded applications, which justifies the big difference in numbers. Of course, now, there are a lot of pending applications but with no collected biometric data. Once the applicants travel to Greece, the golden visas shall be printed.

Rozakis: During previous years, 2015-2019, a lot of foreign companies appeared in Greece, mainly real estate agents, trying to be active in the golden visa market. The main target was to lure potential investors from their home country. We saw more than 50 companies from China operating in Greece. The pandemic practically annihilated these companies, and this created a gap in the market.

One more reason for the poor results is the serious underperformance of the public services that support the golden visa. But the main reason for the poor performance is the inability of the investor to travel to Greece.

I believe the name of the game during COVID-19 is access (to the country). The demand for Golden visa was there. We measured on average 30% more requests in 2020 than in 2019 for the Greek golden visa.

Obviously, Portugal offered more options to foreigners, for potential investors to visit the country, view the offered real estate, and be able to submit their golden visa applications.

Greece, on the other hand, kept a very strict profile against travelers. Very few nationalities could enter Greece during the peak of the crisis (spring 2020). The same measures are still active, and the countries list is renewed very often, based on national pandemic statistics.

We have to admit that the measures paid off. Greece and Finland are currently the only non-red European countries. And comparing Greece to Portugal, the numbers in Greece are considerably lower: Greece has 14,000 cases per million, while Portugal has 55,000.

The Greek economy suffered in total; tourism, the number 1 industry in Greece, was down 88% for 2020.

Will this state of affairs improve soon, or will the Greek Golden Visa downturn continue until the pandemic is fully defeated? What is your prognosis for the program in 2021?

Varnavas: The Greek Government has made a strategic decision to stop the spread of COVID-19. However, this policy had good results, and from now on, we can see that it is possible to re-open the economy. For example, this week all shops have re-opened and work with no restrictions at all, and very soon the ski resorts will open their gates to tourists again.

The vaccination program will also support these efforts, so I am confident that from this spring, people will start to visit Greece and submit their biometrics, and so the Ministry will start again to issue golden visas.

As for a prognosis, I can’t make one for the first half of 2021. This first half could see us reach the end of the pandemic, but it is still an uncertain period in terms of economics. However, and based on the vaccination drive’s smooth progress, I believe that the second half will be as if nothing had ever happened.

Rozakis: As long as the borders are closed, the golden visa figures will remain low. It seems we will not see a material upturn before the summer of 2021. The rate of vaccination in the countries where the investors come from will be the deciding factor.