The program granting residence permits in Latvia in exchange for investments has been actively discussed by politicians and economists Latvia. This is due not only to the adoption of the budget for 2014, but, in my opinion, the beginning of the election campaign for the European Parliament and the Sejm elections which will be held in the spring and autumn of the next year.
The first question was raised by the nationalists. Their claims are based on the fact that the influx of foreigners is threatening the Latvian language and culture. First, the nationalists were demanding to cancel this program at all, but realizing that they went too far, they then reduced their demands to the hard limit of the number of transactions for the purchase of properties to the residents of third-countries to 400-500 transactions per year and an increase in the amount of the investment. This question was included by the Nationalist party in a common set of requirements "to improve the demographic situation in the country," along with such issues as increased benefits for childcare, terms of payment, etc.
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In my view, the issue of a residence permit in Latvia is the most "off-budget" issue in this package. To accept it, they need to change the immigration law, and this is not easy and not very fast. This is a purely political issue and absolutely impassable. But the nationalists earned their advantage over nationalistic voters.
Unless the adoption of the "demographic ultimatum" nationalists threatened to vote against the adoption of the budget, which they did, by the way, on October 1 at a cabinet meeting. Nationalists were supported by the "Reform Party" - the second member of the government coalition.
Various sites began to publish articles of various economists and political scientists, the meaning of which boiled down to this: do we need a permit program in general, not so much, and it is not so beneficial to the country, we can live without it, why it is so cheap compared to other countries, in the UK it costs million.
At the word "cheap" we immediately connect to the Ministry of Economy, which has the following argument: the money received for the residence permit, pass by the state budget, because it ivovles mainly the real estate deals. And the state receives a tiny fraction of the amount of transaction in taxes, the rest goes to the seller and sellers normally do not want them to invest money in local production, thereby creating jobs.
And even if an investor will build a house, enriching some builders, he's gonna live in it usually only in the summer, and in the winter the house is empty and does not use no gas, no water, no electricity. According to economists, it is necessary to create a special state investment fund, where a foreign investor who wants to get a residence permit, must pay a certain amount of money in addition to those he paid for the property. And, most importantly, to the fund controlled by the state with all the ensuing consequences.
Latvian Prime Minister Valdis Dombrovskis, seeing such a tense situation, made a counter offer. Set a quota for the real estate transactions in the amount of 900, thus leaving it to the level of 2012.
I always operate with the word "transaction" and not with a "residence permit". Let me explain the difference. On one transaction you can have multiple permits (a family of several people). Another nuance. Buying a property does not automatically mean the obtaining of a residence permit.
It may be a situation when, having bought the property and applied for a residence permit, the buyer can not pass the test by the authorities and is rejected.
After a multi-week debate policy nothing certain has been agreed. Now in the air are the following figures: 1,000 real estate transactions and each costing not less than 140,000 lats (€199,200). As Prime Minister said, the negotiations will continue.
The Cabinet of Ministers adopted a budget on October 1 and sent the document to the Sejm. The deputies have voted for a reconsideration of the budget by the committees. Perhaps this is due to recent events in the United States. Like, look what happened there, when the budget was not adopted! Finally, the budget must be approved by the Sejm on November 6, 2013.
The battle for the strongpoint “Residence permit-2014” is continued.
Text: Vladimir Dmitriev, Riga, especially for ee24.com