Hong Kong, June 21st 2015

The immigration business is booming...

Many countries have introduced so called residency by investment.

Sounds great, right!?

On a seconds thought, not really..

Most of the programs are based on real estate investments, targeting mainly the Chinese investors, because it’s a well-known fact that Asian investors love property.

Well an old quote says: fire catches, so don’t play with matches...

It’s too late, the fire is burning and the future implications are starting to materialize.

Asian money has priced out many local buyers from their home market, sending property values to new highs every year.

On top, greedy immigration agents and local property developers in countries like Greece, Portugal and Spain, have started to offer immigration clients, 800sqft apartments for as much as 250k Euro going all the way up to 500k Euro.

Of course the client who buys those gets a 1 year stay visa for that country and thanks to Schengen, he can even travel around Europe without limitation ( except to the UK, because it’s not part of Schengen ). Yes, it’s a visa and not even a permanent residence card.

Let’s face it, in those countries, the secondary market for properties is non-existent and the market value for those sold apartments is more or less 70k Euro.

So what is the point to invest up to 500k Euro plus agent commission for a Schengen Visa.. It sounds like a well planned heist by greedy governments, with no plan for the future of their country.

Anyone needing a 1 year Schengen business Visa, can set up a company in the EU, hire himself and will be issued a business visa, equivalent to the Portugal "Golden Visa" . The cost for this set up is not more than a few thousand Euro.

Meanwhile smarter governments have created the so called investment in government debt, offering permanent residency and the chance to become a citizen within a predictable time frame.

One of those countries is Bulgaria. Its offers a fast track option to Citizenship based on two investments in Government Bonds. The bonds can be sold at any point of time with a small spread on the local bond market, thus making them a transparent and liquid investment.

The clients can obtain an EU Passport within 2 years and enjoy the full benefits of being an EU citizen.

I have spent the last 18 months visiting immigration agents in China, to pitch this program. Here are my findings:

  1. The agents don’t like this program because it’s too transparent and they can’t make more than a few thousand Euro per client. They are used to get paid 60k Euro plus, because of the highly inflated prices of properties with other programs.
  2. The agents always argue that Bulgaria is not part of Schengen. Yes this is true. The Bulgarian program offers Citizenship and not a Visa, so Schengen has nothing to do with that.. period.
  3. The agents do not understand that the Bulgarian passport is in fact an European Union Passport. They argue that Bulgaria is not known to their clients. Let’s be honest, how well know is Hungry, Malta or Cyprus to anybody in China..
  4. The Agents worry that Bulgaria can default the and Bonds will be worthless.. I let this argument slip, because it’s a rightful fear, although Bulgaria has one of the best fiscal disciplines in the EU, putting it next to Sweden, Luxembourg and Norway. Before Bulgaria goes bankrupt, most EU countries will default..

My conclusion is that, the immigration industry needs several regulatory bodies, because in my opinion most agents are advising clients on investments and this is usually a highly regulated environment. Seems that governments have not caught up with this one…

It cannot be, that an agent anywhere in world, sells the client and immigration product, based on the highest commission..


Written by Tenio Latev

Chaiman, Hong Kong Bulgarian Association of Commerce