The Organization for Economic Cooperation and Development (OECD) has published a list of countries where citizenship or residence permit schemes are associated with elevated risk. The risk that citizenship or a residence permit in such countries could be viewed as an attempt at tax optimization.
The OECD raised concerns about citizenship programs, residency and naturalization programs for investors in Cyprus; citizenship for investors in the Dominican Republic and Grenada; individual programs for investors, residency and visa programs in Malta; citizenship and residency for investors in Saint Kitts and Nevis, residency for investors in the UAE and a number of other less popular programs.
Latvia IS NOT INCLUDED in this list. Therefore, having a Latvian residence permit will allow you to move freely in Schengen countries, and will also not raise questions when opening and maintaining accounts in foreign banks.
How many people obtained a residence permit in Latvia in 2017?
In 2017, 88 people first applied for a residence permit in Latvia based on real estate purchases.
If you combine the initial residence permit application (based on real estate), the renewal application (after five years have passed), as well as family members (children and spouses), then in 2017, 1,891 people applied for a residence permit.
Of the 1,891 people, 26 people were denied when applying for a residence permit.
The main reasons for denials are the risk of intelligence activities, economic risks (illegal source of funds), and threats to Latvia's national security.
What are the trends in residence permit applications?
In November 2017, we wrote about difficulties in obtaining a residence permit (details here)
Fortunately, from April 2018 onwards, the situation improved. If documents are properly prepared, if there is documentary evidence of the source of funds and work activity, then a residence permit can be obtained in as little as 1-2 months.
What are the trends in the Latvian real estate market?
An economist from the largest Baltic bank, Peteris Strautins, recently expressed the opinion that in the next 3-5 years there will be no crisis in Latvia's real estate market.
Prices for purchasing and renting housing correspond to the population's income level. There is an annual increase in economic indicators and rising wage levels.
For example, in June an annual net wage increase of 9.3% was recorded, while real estate price growth was 8.7%.
The share of "bad loans" in the banking sector is only 2.6% (loans where payments are overdue by more than 90 days). The number of new loans is barely increasing. Therefore, many transactions are made from personal savings rather than borrowed funds.
We believe that now is a good time to purchase real estate and obtain a residence permit in Latvia.
First, it is an opportunity to preserve capital (investments in euros in a European country).
Second, having a residence permit allows your entire family to move freely in Schengen countries.
For more detailed information about obtaining a residence permit in Latvia, see here in different sections.
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Email: info@kominvest.com
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