Russia’s New Golden Visa May Find Market Among “Geopolitical Hedgers”
Nearly three years after first floating the plans, Russia formally opened its golden visa program on January 15th. Observers say the program appears thoughtfully devised but indicate geopolitical factors will limit its appeal.
Russia’s new residence by investment program in a nutshell
Russia will allow those who meet the below terms to acquire permanent residence following a simplified procedure that has a 3-month processing period. Residence permits are also granted to up to five generations of the investor’s family members (spouse, children, parents, grandparents, grandchildren, as well as the spouse’s parents).
Investment terms:
- RUB 15 million (approximately US$200,000) in “socially significant projects” in
- RUB 30 million (US$400,000) in a Russian legal entity carrying out entrepreneurial activity (LLC, joint-stock company, farm, or business partnership)
- RUB 20-50 million (US$270-680,000) in real estate:
- RUB 50m in Moscow
- RUB 20m in the Far Eastern Federal District
- RUB 25m elsewhere in Russia
- Business establishment as sole founder (LLC, joint-stock company, farm, or business partnership) that contributes taxes and fees, as well as contributions to “extra-budgetary funds” amounting to at least RUB 4 million annually.
- Business investment in an existing company (LLC, joint-stock company, farm, or business partnership) that contributes taxes and fees, as well as contributions to “extra-budgetary funds” amounting to at least RUB 6 million annually.
Requirements
- Prior to applying for the residence permit, the applicant must have made the investment within
- 3 years for the socially significant project category
- 2 years for the business establishment category
- 3 years for the business investment category
- 2 years for the real estate investment category
- Mortgaged properties do not qualify under the real estate option.
According to Russian citizenship law, foreigners who have resided in Russia on a residence permit for five years and who can demonstrate proficiency in Russian language and a legal source of income may acquire citizenship.
The program applies no physical presence requirements.
Interesting proposition for some nationalities
Market commentators indicate the program has been thoughtfully conceived, though they question whether it will have broad appeal.
“Russia imagines that countries like India and China, as well as others in Africa and the Middle East, will ignore the sanctions imposed on it by the United States, NATO, and others,” wrote immigration policy commentator Andy J. Semotiuk in Forbes. “To the degree Russia serves as a kind of financial brothel to launder money from individuals who have illegally usurped it from countries that have not joined the Western boycott, it may succeed. But otherwise, for the reasons mentioned, few normal investors would seriously consider putting their money at risk in such a society.”
Less harshly, Philippe May, CEO of EC Holdings, remarked that he found the program, at least on the face of it, “professionally designed and fairly priced.”
He also observed, however, that a Russian passport seemed “not very attractive for the time being. But who knows where it will be in five or ten years.”
Moreover, he pointed out, the five-year path to citizenship is unlikely to prove a strong selling point.
“Not many who look for a second citizenship will want to wait five years, only to get a Russian one.”
But he also believes the program may be of interest to investors who fear their home countries may, like Russia, become targets of Western sanctions in the future.
“With a residence permit and assets in Russia, many Chinese, for example, may feel safer than they would in a Western European or North American country because their assets are unlikely to be confiscated once their country becomes a target of NATO/USA,” added May.”Geopolitical hedgers may find a PR in giant Russia attractive in addition to a second passport from a small island nation.”