Analytics, Estonia, EU – Baltic States, Markets and Companies

A major investor is not required to have an actual place of residence in Estonia and he or she has no obligation to register his or her place of residence in the population register. The temporary residence permit granted to major investors was introduced with the purpose of encouraging investments in such business activities in Estonia that are in the public interest and shall significantly contribute to the development of the Estonian economy.

The investment must be permanent during the period of validity of the residence permit. Investment is permanent in case the investment does not decrease during the period of validity of the residence permit, except for the causes attributable to the fluctuation of the market price of the investment.

A company or an investment fund in which the initial investment was made as a condition of issue of the residence permit may be changed during the period of validity of the residence permit provided that the company would invest mostly into the Estonian economy or into an investment fund according to the investment policy of which the instruments of the fund are invested mainly in the companies entered into the commercial register of Estonia.

The European Commission on Wednesday admonished member states to put an end to the system of so-called golden visas, which may bring along corruption and money laundering. The Commission published a report that strongly advises member states to abandon the habit of issuing rich citizens of foreign countries -- often the Chinese, Russians or Americans -- residence permits or citizenship in exchange for investment.

The report mapped the existing practices and identified certain risks such schemes imply for the European Union, in particular, as regards security, money laundering, tax evasion and corruption. If member states do not make their rules stricter or become more transparent, the Commission is prepared to take steps, the document warned.

Non-governmental organizations have indicated countries, like Malta, Cyprus and Bulgaria, where rich foreigners are given citizenship that enables them to freely move around in most of the EU. In many countries, rich foreign investors easily receive residence permits in exchange for investment.

In the last 10 years, the golden visa scheme has been used in EU countries to grant citizenship to approximately 6,000 and residence permits to some 10,000 people. In exchange, the countries received foreign investments in the total amount of 25 bn euros.