Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: I'm Stephen Carroll and this is Here's Why, where we
Speaker 2: take one news story and explain it in just a
Speaker 2: few minutes with our experts here at Bloomberg.
Speaker 3: This is the gold card, as you know, the Secretary
Speaker 3: of Commerce and myself and some others have been working
Speaker 3: on for quite a while. Essentially, it's the green card
Speaker 3: on steroids.
Speaker 4: The UK is considering a new invite only investor visa
Speaker 4: that would cost five million pounds as the nation seeks
Speaker 4: to revive its reputation as a wealth hub. Hundreds of
Speaker 4: people have applied for those visas within the first few months.
Speaker 2: Pledging over a billion dollars in New Zealand fans. For decades,
Speaker 2: golden visas have offered wealthy investors an easier path to
Speaker 2: move in country. The formula is simple, invest money to
Speaker 2: gain residency and perhaps one day even citizenship. But that
Speaker 2: bargain is changing. Some governments have decided the old model
Speaker 2: went too far. Oh, Theys still want wealthy immigrants, but
Speaker 2: on different terms. And while gold and visas aren't disappearing,
Speaker 2: they are being redesigned. So here's why golden visas are
Speaker 2: being polished. Our reporter, Charlie Wells, joins us now for more. Charlie,
Speaker 2: First of all, what exactly is a golden visa?
Speaker 1: Well, these are effectively residents by investment programs, and they've
Speaker 1: been popular in some European countries. They've been popular in
Speaker 1: some Caribbean countries and also Australia and New Zealand. And
Speaker 1: basically what they do is they give wealthy investors, people
Speaker 1: who can pony up tens of thousands, if not millions
Speaker 1: of dollars, the right to reside in countries. And these
Speaker 1: have grown in popularity at a moment where geopolitical tensions
Speaker 1: have been making some people feel maybe less comfortable in
Speaker 1: their home country than they were before, at a time
Speaker 1: when a lot of people maybe want to come to
Speaker 1: say Western Europe, or come to the United States where
Speaker 1: they have maybe a little bit more freedom of mobility,
Speaker 1: of movement of capital. And so these programs have been
Speaker 1: really attractive for some of these people who are sort
Speaker 1: of looking for a plan B. They've also been attractive
Speaker 1: for countries who are looking for the investment that comes
Speaker 1: with this, for some of the fees that come with this,
Speaker 1: and then also the tax revenue that come if these
Speaker 1: wealthy people start to reside in their countries. How hard
Speaker 1: is a golden vasa to get? They're expensive, I think
Speaker 1: that's the most important thing across the board. They tend
Speaker 1: to reach into the hundreds, if not millions of dollars
Speaker 1: as far as these sorts of investments that residents or
Speaker 1: aspiring residents need to make. And one of the more
Speaker 1: popular programs was in Portugal, where at one point it
Speaker 1: was popular for people who wanted to get a golden
Speaker 1: visa in Portugal to invest as little as three hundredundred
Speaker 1: and fifty thousand euros in property that is basically the
Speaker 1: price of a flat in Lisbon in some parts of Lisbon.
Speaker 1: And so this really made that program popular, but it
Speaker 1: also created something of a backlash, of a backlash in Portugal.
Speaker 1: And then also you saw a lot of similar programs
Speaker 1: kind of question the utility of this, and so they've
Speaker 1: become more difficult recently.
Speaker 2: So how have those debates been playing out in places
Speaker 2: like Portugal, which you're choosing to tighten some of the
Speaker 2: rules around their golden visas other countries have been winding
Speaker 2: them down altogether? What's behind that?
Speaker 1: A lot of this has to do with concerns about
Speaker 1: both immigration and the housing market. So at once, we've
Speaker 1: seen in the United States and in Western Europe heated
Speaker 1: rhetoric about immigration, politicians looking to clamp down on borders.
Speaker 1: At the same time, you've also seen housing prices increase,
Speaker 1: and so there's a tendency in a number of protests
Speaker 1: movements to actually key in to kind of focus in
Speaker 1: on some of these Golden visa programs. Now, these programs
Speaker 1: have brought in in some cases, billions of dollars to
Speaker 1: countries who have them. The effect on the housing market
Speaker 1: is a little bit more contested, right, how many people
Speaker 1: actually take up these properties and kind of drive up prices.
Speaker 1: But they're a popular punching bag because you can effectively say, look,
Speaker 1: the actual citizens of this country are struggling with housing prices,
Speaker 1: while you are allowing wealthy individuals to come buy property
Speaker 1: that we can't afford, drive up the prices, and maybe
Speaker 1: not even live here full time. So that's a narrative
Speaker 1: it's almost impossible to ignore.
Speaker 2: Yeah, certainly, and it becomes very tied up with that
Speaker 2: key issue of housing, which is called shortages, and so
Speaker 2: many cities around the world. It's su different picture though
Speaker 2: if we think about what was happening in New Zealand,
Speaker 2: because they've revamped their Golden visa offer recently to make
Speaker 2: it more attractive to investors. Is there a lot of
Speaker 2: competition then between countries to try and bring in these
Speaker 2: wealthy people.
Speaker 1: Everybody wants tax revenue, right, And what we know is
Speaker 1: that wealthy people are very mobile. They can afford to
Speaker 1: make property investments in numerous countries, they can afford to travel,
Speaker 1: they can afford to make these sorts of investments. And
Speaker 1: so it was interesting because, yes, at a time when
Speaker 1: a lot of European countries have been tightening their restrictions,
Speaker 1: increasing the amount of money that wealthy individuals need to make,
Speaker 1: or even just shutting down their programs, New Zealand is
Speaker 1: actually making it easier, right, so allowing wealthy migrants to
Speaker 1: count philanthropic donations toward the investment requirements. So we know
Speaker 1: that New Zealand's housing market has been in a difficult place.
Speaker 1: We know that their economy has been in a difficult place.
Speaker 1: So what you tend to see is this sort of
Speaker 1: back and forth where when a housing market heats up,
Speaker 1: there is resistance because people on the ground are concerned
Speaker 1: when a housing market cools down we've been seeing in
Speaker 1: New Zealand, you can see a little bit more of
Speaker 1: an opening for these programs, more demand from the government.
Speaker 2: The United States then started offering a new Trump gold
Speaker 2: card late last year. What's different about that prograp and
Speaker 2: what do we know about the takeup of it?
Speaker 1: This was a striking policy announcement from Donald Trump. And
Speaker 1: what differentiates this American program from a lot of the
Speaker 1: other popular golden visa programs is the fact that instead
Speaker 1: of making an investment in property, instead of making an
Speaker 1: investment in say some sort of fund within a country,
Speaker 1: you're just paying a million dollars. It's a fee, right,
Speaker 1: So it's a fee, not an investment. And the idea
Speaker 1: from Trump was to try to attract wealthy entrepreneurs, wealthy
Speaker 1: individuals to the United States. The reality has been a
Speaker 1: lot different because, as Bloomberg reported earlier in April, only
Speaker 1: one person, according to the Administry, had been approved for
Speaker 1: the program. So it's a flashy policy. It's one that
Speaker 1: Trump has certainly tried to make the case for, but
Speaker 1: the demand is just not there right now.
Speaker 2: So overall, then, charitie, is it becoming easier or more
Speaker 2: difficult for wealthy investors to secure these kinds of visas
Speaker 2: and to move country on the basis of them. It's
Speaker 2: a shifting landscape, and there's a tension where a lot
Speaker 2: of policy, a lot of regulation has become more parochial.
Speaker 2: But a lot of wealthy individuals, a lot of capital,
Speaker 2: a lot of people have become more mobile.
Speaker 1: And I think that there will continue to be attention
Speaker 1: here where you have this demand from countries for a
Speaker 1: strong tax base for talent, and you also have pushback
Speaker 1: from people on the ground when economic conditions change. So
Speaker 1: I think the reality is that we see changes in
Speaker 1: these policies. You see countries that loosen the restrictions and
Speaker 1: then tighten them. You see countries talking about them and
Speaker 1: come sort of new and different ways that might change
Speaker 1: the phrasing so they become a little bit more politically palatable.
Speaker 1: So it seems like these programs aren't going away, and
Speaker 1: there is certainly demand from all across the globe for them.
Speaker 1: So it seems like they have a book continue.
Speaker 2: Okay, Charlie Wells, thank you very much for more explanations
Speaker 2: like this from our team of three thousand journalists and
Speaker 2: analysts around the world. Go to Bloomberg dot com, slash explainers.
Speaker 2: I'm Stephen Carroll. This is here's why. I'll be back
Speaker 2: next week with more. Thanks for listening.