Budget, Investments, Latvia, Legislation, Real Estate

Saeima was originally scheduled to review the bill today, but the matter had to be postponed because Saeima Economic, Agricultural, Environmental and Regional Policy Committee has not completed reviewing proposals for the bill and is yet to decide whether a new bill should be drafted.

All For Latvia-For Fatherland And Freedom/LNNK has proposed to amend the Immigration Law so as to keep the annual residence permits quota unchanged, but at the same time remove from the law the provision that third country citizens may apply for Latvia's residence permits by paying EUR 50,000 into the state budget. The latter proposal is also supported by Unity.

Unity also proposed to increase the minimum amount of real estate purchase from EUR 150,000 to EUR 250,000 so the buyer would be eligible to receive a temporary residence permit in Latvia.

As reported, Saeima passed the amendments in the final reading on October 31 last year, confirming the coalition's compromise on the system of temporary residence permits.

The amended law provides that a third-country citizen may apply for Latvia's temporary residence permit, valid for a period of up to five years, if he or she makes a payment of EUR 50,000 into the state budget.

Also, third-country citizens who buy real estate worth over EUR 150,000 (LVL 105,000) in Latvia will be able to apply for temporary residence permits. The regulations on residence permits will apply to no more than 700 such deals annually, as well as to 100 purchases of properties worth more than EUR 0.5 million (LVL 351,000). If there are more than a hundred purchases of real estate worth more than EUR 0.5 million, the number of property purchases worth more than EUR 150,000 to which the regulations on residence permits apply will be reduced accordingly.

President Andris Berzins, however, tossed back the amendments to the parliament for another review on November 9.

In his letter to Saeima Speaker Solvita Aboltina (Unity), the president pointed to several sections of the amended law which are contradictory, and, as a result, the whole purpose of the alterations loses its meaning.

Berzins points out that the quota system will not reduce property prices if an unlimited number of third-country citizens is allowed to apply for residence permits by paying EUR 50,000 into the state budget, who could subsequently purchase real estate in Latvia.

Berzins also refers to several studies which have established that the temporary residence permits system has fostered investments in Latvia, and third-country citizens' investments in exchange for residence permits amounted to at least LVL 145 million (EUR 206 million) in 2010-2013.