While the new Greek government tries to kick off a slow recovery from a nearly decade-long economic and austerity crisis, it invests in cash by selling Golden Visas to rich foreigners.
Fit for dealing–it only takes EUR 250,000 ($272,062) to apply for investment, the queues of the rich and super-rich eager to receive documentation enabling their free travel through the block come from all over, including Turkey and Russia.
But especially from China, whose government made inroads into the EU via the Piraeus port, controlled by the Chinese maritime operator COSCO, and with the Bank of China opening a branch and other Chinese companies looking to put money into Greece.
It was the selling of the so-called Golden Visas that helped propel the rebound, amid critics the scheme is vulnerable to money laundering and criminal conduct, as well as developers scooping up assets to qualify and then converting them into short-term leases.
Through sites like Airbnb, which nearly emptied entire Greek neighborhoods of residents forced to leave so that their apartments could be used for transient renters, changing the character of areas that brought them there first, and also driving up rents.
In downtown Athens, a former bank branch near Parliament in Syntagma Square was turned into V2 Development offices, a real estate development company showing off properties for sale to get the golden ticket.
That helped the sector recover from a crushing crisis that saw people unable to give away properties that had become almost worthless, but at the same time taxed by governments desperate for cash.
The selling of so-called Golden Visas granting rich foreigners residency permits awas a big business for Greece with 2,008 more sold in 2019 through Dec. 1, Enterprise Greece data showed.
Golden Visas in Greece are granted to the rich who invest at least € 250,000 ($277,714) in property while those with Greek ancestry in the Diaspora who don’t have that kind of money must wait two years or more for residency permits or dual citizenship.
Greece has sold 4,059 Golden Visas since the program began in 2013, with numbers recently rising, especially to rich Chinese and Russians.
Golden Visas were issued to 4,129 Chinese investors as the country’s links have become closer, warning U.S. Ambassador Geoffrey Pyatt that China is trying to buy undue influence in Greece and use it as an entry into the EU.
Between early September to early December, Greece issued 742 new five-year residence permits to non-EU investors and their relatives, 90% (665 permits) to Chinese buyers.
Statistics from the Bank of Greece showed a 94% annual increase in the inflows of money to purchase property in January-June 2019 to € 736 million ($817.59 million), as the New Government is also wooing more of the wealthy by offering a flat € 100,000 ($111,085.50) if they make Greece their residence at least six months a year and place to report their annual taxes.
Some 13,075 Chinese nationals and family members were resident in 2019 compared to 1,342 Turks and 1,000 Russians, the paper said. “If it wasn’t for the Chinese, I wouldn’t speak to you right now,” said Vaggelis Kteniadis, 47, V2’s director. “The Chinese are sick of being excluded, not having choices.” Now there is fear that the coronavirus that started in China and spread–Greece went so far as to temporarily close its visa office in China, stopping the flow of visitors from there that were a big boon and limiting their ability to buy visas.
“It’s normal that revenue will be affected until the virus is contained, but it’ll be much more busy than before,” Kteniadis said. “In the future, they will want to avoid living through similar incidents.” Cyprus requires a minimum of € 2.18 million ($2.18 million) investment, but the Golden Visas bargain basement has proved a big lure for people with so much money that € 250,000 is pocket change.
This brought a boom to the residential property sector that the paper said dropped by 40% in value during the recession, the EU’s biggest decline. And while there are no specific figures, the 6,304 primary permits–70 percent for Chinese–would bring in € 1.5 billion ($1.63 billion). “These people are millionaires, but they must sign forms and show they’re not elephants every time they fly,” Kteniadis said. “It’s embarrassing,” if not as difficult for Diaspora Greeks to get residency or citizenship.
“Whoever wants to invest in Greece is welcome,” said Kteniadis, whose company has offices in three Chinese cities. “We lost 30% of our GDP during the crisis. I didn’t see too many interested in fixing that.