Spain, the new ¡®golden visa¡¯ haven of Europe

¡°When you have money, you can set up whatever you want in any part of the world,¡± says Jorge, a 28-year-old from Venezuela, matter-of-factly.

Jorge, who declined to provide his last name and did not wish to be recognized in photographs, has been in Spain for three months but he already has a residency card and a job.

Besides the fundamental ethical question of selling passports, there is also a sinister side to those programs

Daniel Amoedo, Transparency International

He is one of 5,778 foreigners to have obtained in the first 10 months of the year what is commonly known as a ¡°golden visa¡± in Spain. Known formally as the Law to Support Entrepreneurs and their Internationalization, this piece of legislation has allowed Jorge to get his legal papers after investing more than €500,000 in real estate.

From January to October, 546 individuals obtained residency by purchasing property, according to Foreign Ministry figures. Investing in business projects is another way to secure residency through this program.

Statistics suggest that Spain will end the year 2018 with a new residency-by-investment record. From January to October the figure already nearly matches the number for all of 2017 (5,876 visas, 563 of them for investing in property).

Ever since the program was launched in 2013 to attract investment during the economic crisis, the number of visas issued has continued to grow each year.

Spain is not the only country in the world to offer this kind of advantage to the wealthy. In the EU alone, 13 member states offer the possibility of obtaining residency ¨C and even citizenship in some cases ¨C through investment.

Transparency International has criticized this practice. In a report released last month, titled ¡°European Getaway: Inside the Murky World of Golden Visas,¡± the group finds that Spain has granted the highest number of golden visas in the EU in the last 10 years, to the tune of 24,095 according to official data. It is also one of the countries to have made the most money from the scheme.

¡°European residency and nationality have become luxury goods,¡± notes Daniel Amoedo, of Transparency International Spain.

¡°Besides the fundamental ethical question of selling passports, there is also a sinister side to those programs,¡± he adds, alluding to applicants who have been linked to corruption cases in Brazil, Russia or Ukraine.

Amoedo says that Cyprus, Malta and Portugal have the least stringent standards when it comes to granting these visas.

¡°In Portugal it¡¯s caused quite a scandal, but in Spain the authorities have delegated the policing work to private groups,¡± adds the lawyer Crist¨®bal Carretero. His law firm, CC Sociedad de Abogados, has processed around 100 golden visas in the last five years.

Anti-money laundering laws make everyone who participates in the process responsible, which provides an incentive to report suspicious activity. The investor must justify the origin of every last euro, and banks have gotten ¡°very strict,¡± says Carretero. ¡°While your papers are being processed, you can¡¯t even make cash deposits.¡±

Pura Strong, a partner at Strong Abogados, a firm specializing in foreign clients, agrees.

¡°It is practically impossible to launder money this way,¡± she says, noting that there are easier ways to do it than through a golden visa. Applicants are also required to have a clean criminal record. ¡°Some Americans have been left out because of drunk driving.¡±

But Amoedo, of TI, believes that current regulations ¡°are not enough because they dilute the responsibility of due diligence processes between the banks and intermediaries.¡± He says the Spanish state should conduct more stringent additional checks. Right now, notes Amoedo, it takes less than a month to receive a golden visa once the investment has been justified.

A change in applicants

Both lawyers consulted for this story said that the applicants¡¯ background has changed significantly in recent years. ¡°We are seeing a lot of families,¡± says Carretero.

Eduardo Salamanca, a consultant at the real estate agency Engel & V?lkers, has provided advice on three golden visa applications this year. ¡°Because they are financially well-off individuals, they seek out expensive, pleasant places to live,¡± he notes.

In Madrid, for instance, clients favor the upscale Salamanca district. Clients, notes this consultant, often praise the Spanish lifestyle but complain because ¡°it sounds easy, but in the end there are a lot of regulatory requirements.¡±

It is practically impossible to launder money this way

Pura Strong, lawyer

Colleen Sun, a 45-year-old US citizen, is a nurse by training who has spent the last few years investing ¡°in business and real estate.¡± After her divorce, she decided to leave China and move to Spain because of ¡°its culture and its beauty.¡±

Sun bought a house in Madrid in September, but she has yet to apply formally for a golden visa. One of the privileges of this program is that it is possible to apply directly from Spain, unlike other types of permits. Still, this takes nothing away from ¡°many legalization and translation procedures,¡± in her case from original documents in both English and Chinese.

For Jorge, the Venezuelan immigrant, the process felt a lot easier. ¡°It was very comfortable,¡± he says, looking at his lawyer, Carretero. The shared language was a determining factor, but so was the fact that his sister was already living in the Spanish capital, or that he happens to be Real Madrid's ¡°number-one fan.¡±

Jorge would rather not disclose how much he has paid for his apartment or for his ongoing investment in a chain of beauty treatment clinics. He does reveal, however, that he has spent €3,000 on legal fees. Despite his own smooth experience, Jorge¡¯s assessment is not completely optimistic: ¡°Don¡¯t think it¡¯s not hard: with cash or without it, emigrating is incredibly difficult.¡±

English version by Susana Urra.