Do Europe’s Golden Visas Make Sense?

Recently, a reader wrote to me to ask whether she should buy property in Greece to qualify for residency under its golden visa program.

She was considering the golden visa because she wanted more time in the Schengen Area than her U.S. passport allows (90 days in any 180-day period), but she had questions because she’d read that, even with a Greek golden visa, she’d still only be able to spend 90 days in any 180-day period in another Schengen country.

Her question, understandably, was, “What’s the point of the golden visa then?”

Her question raises a couple of important issues:

1. There’s a lot of misconception surrounding golden visa programs. This reader isn’t alone in her misunderstanding of the benefits that a golden visa can bring.

2. Golden visa programs don’t make sense for everyone. They only make sense for a handful of people with specific overseas objectives.

3. Golden visa programs aren’t the only options for gaining residency in Europe. There are plenty of alternatives that are more straightforward and perhaps more suitable, depending on your circumstances and objectives.

4. You don’t need to use a golden visa program to invest in property. If you’re looking to buy a home in Europe for investment or lifestyle, you don’t need a golden visa program to achieve this.

I’ve been advising people on how to live, retire, and do business overseas for over 35 years. Much depends on your objectives, but for the average person who wants to live or invest in Europe, I’d likely suggest one of the following options instead of a golden visa.

First, to clarify, a Greek golden visa would technically enable her to spend more time in the Schengen Area because she could base herself in Greece (which is in the Schengen Area) full-time. She could depart from Greece for each 90-day stint in another Schengen country and return to it to reset the clock on the 180 days.

Her point, however, was that the offer on the table with Greece’s golden program wasn’t as good as she thought. She, like many others, was under the impression that, for 250,000 euros, she’d be granted unlimited access to the entire Schengen Area.

Europe’s Non-Golden Visa Residency Options

If your objective is to retire in Europe, I recommend seeking out a “self-sufficiency” residency visa. Many of the European countries that are most popular for retirement (Greece, Spain, Portugal, etc.) offer these.

The name of each country’s version of this kind of visa varies, as do the requirements to qualify, but the basic premise is the same: you apply for residency on the basis that you can support yourself financially long-term.

In other words, if you can prove to the relevant immigration authority that you have enough money to live on without needing to seek local employment or rely on public funds in that country, you can usually get temporary residency.

In the case of the reader who inquired about Greece, I’d suggest the Financially Independent Persons Visa instead, which grants a two-year residence permit. To qualify, that reader would need to prove a steady income of 2,000 euros per month.

Portugal offers the Passive Income (D7) Visa. This grants a one-year residence permit if you can prove a steady income of at least 1,500 euros per month. (This is not the official amount, which isn’t publicly available; it’s the amount that my Portugal attorney recommends.)

Spain offers the Non-Lucrative Residence Visa (NLV), which grants a one-year residence permit if you can prove an income of 2,400 euros per month.

Of course, there’s more to these self-sufficiency residency visas than just proving that you’re financially stable.

You’ll need to provide proof of accommodation (a long-term lease or the deed to property you’ve purchased) in the country where you’re applying for residency, as well as purchase private health insurance that covers you for the duration of your residence permit.

Despite these requirements, the financial thresholds you need to meet to qualify for a self-sufficiency visa are substantially lower than they are for a golden visa in every case.

What if you want to live in Europe but you’re not retired and still earn an income?

You can seek an employment contract with a local company, which could sponsor your residence permit, but these are difficult to obtain.

Local jobs are usually reserved for nationals, and in most cases, you’ll need to have exceptional skills and speak the local language fluently to be considered for one.

Digital nomad visas provide an easy alternative, however. Many European countries offer them, from Greece, Portugal, and Spain to Croatia, Estonia, Italy, Malta, and more.

The basic premise behind this type of visa is the same as a self-sufficiency visa: you have enough income (coming from a company registered outside your country of interest) to support yourself, which allows you to qualify for temporary residency.

There are other alternatives available as well, if neither the self-sufficiency nor the digital nomad visa suit your objectives. There are entrepreneur or startup visas, self-employment visas, student visas, and so on.

When Do Golden Visas Make Sense?

There are a handful of cases in which investing in a European golden visa makes sense.

First, if you’re from a country that does not enjoy visa-free travel to the Schengen Area, a golden visa is really attractive. It allows you to circumvent the extra fees and administrative hassle of applying for a visa every time you’d like to visit.

If you’re from the United States or Canada, you already enjoy this right, so this perk isn’t as significant to you.

Second, golden visas can allow you to avoid becoming a tax resident in Europe. The downside of self-sufficiency, digital nomad, and most other types of residency visas is that they stipulate physical presence requirements.

Usually, you need to spend at least 183 days per year in your new country to maintain your residency status. This also happens to be the amount of time that triggers tax residency in most countries. In other words, most residency visas also make you a tax resident.

Physical presence requirements can also be problematic if you’re trying to obtain or maintain several residence permits from several countries at the same time, since you can’t be physically present in more than one place.

Golden visa programs usually have zero or no physical presence requirements. Greece and Spain, for instance, don’t require you to spend any time in the country to maintain your golden visa residence permit. Portugal only requires seven days per year.

This is ideal for someone who wants to avoid tax residency or who is collecting as many backup residence permits as possible to give themselves as many options as possible.

For the average person who just wants to live in Europe, however, this strategy is unnecessarily complicated.

The best approach is to choose the country where you genuinely enjoy spending time (rather than the one with the most favorable tax policies), apply for residency using the option that suits your objectives best, and address your local tax burden with the help of an advisor.

Until next time,

Kathleen Peddicord

Founding Publisher, Live And Invest Overseas

Editor’s note: A version of this article appears in Forbes.