The European Commission has published a report about investor schemes for obtaining citizenship and residence permits in a number of EU member states

Obtaining citizenships («Golden Passports»)

Investors can obtain Bulgaria, Cyprus and Malta citizenship through a simplified way: potential applicants are not required to physically reside in the chosen country and there are no requirements to show any other genuine connections with the country before obtaining citizenship. If the citizenship is granted, the applicant has the right to free movement in the EU area will have access to the EU market where he can carry out economic activities and also has the right to vote and be elected in European and local elections. In other words, by obtaining citizenship from one of the abovenamed countries, investor gets all the rights and privileges of the European Union.

The Commission’s report identified the following problematic areas:

· Security: the identity of the applicant is not reliable enough, as the EU’s own centralized information systems, such as the Schengen Information System (SIS), are not used as systematically as they should;

· Money Laundering;

· Tax evasion;

· Transparency of information: the report lacks clear information on how citizenship schemes work. There is no statistical data about the number of received, rejected or approved applications. In addition, member states do not exchange information about investor applicants and connected matters. 

Obtaining a residence permit ("golden visas")

Investor residence schemes are opened in the following countries: Bulgaria, Czech Republic, Estonia, Ireland, Greece, Spain, France, Croatia, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia and the United Kingdom. Residence schemes give a citizen of a third country the right to reside in the Union State, as well as to move freely in the Schengen zone. Although, EU legislation regulates the entry conditions for certain categories of citizens, the schemes by themselves are not regulated at the EU level and remain in the competence of a single country.

The Commission’s report identified the following problematic areas:

· Security check: In accordance with EU legislation, there are certain security procedures that must be carried out before issuing a visa or residence permit to foreign investors. However, the report lacks information about the practical use of these procedures in each country;

· Requirement of physical residence: in some countries in order to obtain a residence permit or visa, investors need to have a limited physical presence or no presence at all. This factor can contribute to a fast-track national citizenship, and as a result - access to the rest of the EU countries.

· Lack of transparency of information: the report lacks the data on statistics of received, approved and refused visas.

The Commission will further monitor how the EU laws are observed while obtaining citizenship or a residence permit via investors’ schemes, and if necessary will take further actions. The Commission recommended for Member States to conduct systematic border and security checks; duly comply with the requirements of the Long-Term Residence Permit Directive and the Family Reunification Directive; check invested funds in accordance with the EU anti money laundering rules and procedures, as well as ensure administrative cooperation between countries, for example, exchanging information to reduce the risks of tax evasion.

The commission plans to organize a group of experts from representatives of allied states, whose tasks will be to create an information exchange system, which will monitor the number of received, approved and rejected applications for citizenship or residence permits, as well as check the origin of applicants.