What more and more governments are profiting from: the settlement permit

It is not necessarily right that those who purchased settlement permit or even citizenship, enjoy the same benefits of the fundamental rights within the EU, the free movement of capital and movement, as ‘aboriginals’. Joe Myers, writer at Formative Content, the company, which carries out a study in this area on behalf of World Economic Forum, says that IMF and other international organizations fear a global security threat with settlement programmes becoming a business across the world. He also reveals that Hungary’s actions are rather unique in this regard. However, demand from Russia, Ukraine, Africa, and the Arab world for settlement permits offered by smaller EU members is steadily increasing. This provides a stepping stone for wealthy people from the third world to countries, where otherwise they would not be admitted.

Péter Zentai: How good of a business is trading with settlement permits?
Joe Myers: In 2014, Asians, Africans, and citizens – typically wealthy investors – of countries which are close to the EU, but not member states, such as Russia, were already spending two billion dollars to legally settle abroad. Since then, the scope of countries offering such opportunities has broadened. This is a rapidly growing business becoming a global industry, with an annual turnover of billions…

If governments or their mediators can make profit from this, it raises ethical issues. This way, they close their gates for real refugees, and open them for the rich from the same country.
Not entirely. Countries involved in this growing competition do distinguish refugees from those who wish to buy settlement permit or citizenship, since the two are entirely different cases. Nevertheless, it is obvious that some of those buying settlement permits are ‘economic refugees’. However, recipient countries impose strict financial-economic and security conditions for applicants, so that they can be classified differently. The primary model is the USA and Canada. In these countries have been offering different types of settlement permits. If a foreign applicant wishes to obtain citizenship in Canada, he or she has to do due diligence and go through a series of interrogations by the authorities – just like in any other country in this competition. After that, a working capital investment worth 800 thousand CAD has to be made in the country. After five years of transition time, the applicant receives legal settlement permit, as long as he or she fulfilled every condition. After three years of consideration, the Canadian authorities decide whether they grant citizenship or not.

As far as I know, European countries are far more permissive.
It depends. For example, in France, someone applying for a permit from outside the EU has to make 10 million euros worth of investments. Meanwhile, in Greece, this premium ‘pass’, which comes with the freedom of mobility and settling down, costs only 250 thousand euros. In Bulgaria, it costs half a million, but since it is not a ‘Schengen’ country, it is not so sought after. However, in both mentioned countries there is an extremely thorough due diligence and the applicant has to guarantee that he or she will carry out economic activities in the country. The situation is the same in Lithuania; however, the ‘entrance fee’ is only 35 thousand euros. Though, the waiting time for citizenship is at least ten years.

However, in Hungary the whole procedure can be done from distance, and applicants do not have to invest 250 thousand euros, they only have to buy government bonds from it, which generates profit anyway. The transaction fee is nothing else, but a 50 thousand euros levy, that the registered local administrators can take – according to the official statement.
This in this particular form is rather unique, indeed. However, it is clear, that smaller EU countries joining the ‘game’ are becoming more and more popular, because after all, along with the settlement permit they offer the most opportunities in terms of free movement. Chinese, Russians, Uzbek, Iranians, Arabians and Ukrainians, who purchased settlement permits can move just as freely from Malta, Cyprus, Latvia and Hungary than ‘aboriginals’.

Do you think it is right?
IMF and other international institutions have begun to raise concerns about it. This expanding business of some countries, governments and their mediators is becoming less transparent, which increases global security challenges.

Original date of Hungarian publication: September 15, 2016