Are golden visas a golden opportunity? Assessing the economic origins and outcomes of residence by investment programmes in the EU

Abstract

Residence by investment (RBI) programmes, or ‘golden visa’ schemes, are now found in half of European Union member states. Yet no empirical studies have tested the economic drivers or impacts of these programmes. Filling this lacuna, this article supplies the first comparative quantitative evaluation of the economic origins and outcomes of so-called golden visa programmes in the European Union. Utilising new data, we show that governments across the political spectrum are more likely to begin RBI programmes after a decline in economic growth, especially during an economic crisis, and that the programmes are generally targeted to address failing areas of the economy. Furthermore, we show that wealthy investor migrants are better conceptualised as mobile populations akin to tourists or investors, rather than as immigrants, and that countries price programmes in response to both demand-side and supply-side forces. We also find that the programmes represent a miniscule proportion of foreign investment in most countries, and that the vast majority of the investments go into real estate even when other options are available. However, the impact on real estate markets is trivial, with the sole exception of Greece. The results suggest that states turn to golden visa programmes to plug short-term economic gaps but with negligible national-level economic impact.