The new future of global mobility and residency programs in Europe
COVID 19’s impact on Schengen border control, residency by investment, and immigrant residency status, Portugal as an example. COVID 19’s impact on Schengen border control, residency by investment, and immigrant residency status, Portugal as an example. The storm will pass, but we can only assume that the impact of this global pandemic will remain for years to come. One of the foreseeable impacts will be on our global mobility; the last weeks have seen borders across the globe closing down, one by one. Europe and the world have not seen this level of border control for decades. Moreover, a large part of the world’s population is now confined in quarantine; our freedom of movement and mobility has been greatly limited. The recent developments pose questions like: what will the new normality bring when the storm is over? Will we return to the same level of global mobility that allowed us freedom of movement within the Schengen zone. As the holder of a European or Schengen Union passport, one could enjoy visa-free access to many destinations across the globe. Will our travel and lifestyle habits change? How will our needs and priorities be posted in the Coronavirus crisis? Will the residency and citizenship by investment programs in Europe still be as attractive to investors and will the European government now more than ever open their borders wider for foreign investments? The immediate impacts that we are already seeing in what many say is only the early stages of the Coronavirus spread, is the limitation on our freedom of movement, imposed by governments with the intention to mitigate the spread, slow the curve. These include extensive border control and travel restrictions, as of March 23, 174 counties imposed severe travel restrictions and many have closed their borders entirely, most major airlines have more than halved their flights and many airlines may never resurface after the dust has settled. Visa-free travel to the Schengen area in Europe has been the essence of the citizenship-by-investment program, in the current reality, this has drastically changed and maybe also in the long term. Will some countries' short-term emergency measures become the new norm? And so, freedom of movement, a right that used to be a cornerstone of our democratic society will become a luxury of the past, or only limited to certain countries and territories. The added value of a second residency in another part of the world will be reconsidered in light of the new status quo. Portugal has for example been of recent years one of the more desirable countries to acquire a passport in Europe, offering no. 3 in a global ranking with a 170 of 178 points in mobility score. The “Investment for citizenship” Program in Portugal was created in 2012 with the purpose to attract foreign investment to the country in the wake of the financial crisis and boost the national economy. As of December 2019, it has brought close to five billion euros in the transfer of capital whereof more than four and a half billion has gone to real estate acquisition. The program has been controversial as investments are unevenly attracted, mainly to the larger metropolitan areas of Lisbon and Porto, leading to speculation that the program has created an overheated real estate and rental market. The EU and fractions in the Portuguese government have also raised concerns about inherent risks in particular regarding security, money laundering, tax evasion, and corruption. These factors led to the government’s decision to prohibit the program in the metropolitan areas (Lisbon and Porto) hoping that the new investment requirements will benefit low-density areas in the country. The program amendments will be implemented in 2021. However, that might change, as the expected effects of the Coronavirus on the national economy will be profound. Portugal along with other European countries may reconsider implementing restrictive foreign investment legislation and will rather be looking to launch more investment incentives like the residency program to battle the economic downturn brought by the Coronavirus, opening the European borders even wider. On the other hand, investors will also be re-evaluating their priorities, some will view investment for citizenship a non-essential investment in a bear market, but others would say that it is now more than ever important to have a plan B. We will most definitely see a change in both the countries' immigration and foreign investment policies and also investor’s focus and priorities that will impact their choice of second residency country. Security will still be an important priority whereas universal and high-quality health care will become increasingly important. As a social inclusive measure, Portugal announced that as of March 29, all foreigners with pending residency applications will be treated as permanent residents during the Coronavirus crisis, to ensure good access to public services for all. Maybe counties with strong social welfare systems will be more sought after, as we become more vulnerable in new emerging “Black swan” crises.