Balkan countries offer passports to draw investment

04/02/2013

In an attempt to attract foreign investment, many countries in the region are turning to new tactics.

By Biljana Lajmanovska for Southeast European Times in Skopje -- 04/02/13

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Several countries in the region are offering citizenship to foreign investors. [EU]

Several countries in the region are offering citizenship to foreigners who outlay large sums, in an effort to draw investment to the region and recover some of the foreign direct investment lost in the past few years.

According to a recent report from The Vienna Institute for International Economic Studies, foreign direct investment grew in the region by about 26 percent in 2011. However, the increase, which is not expected to hold, followed years of sharp losses.

Romania is a pioneer in offering citizenship for investments, and has an initiative in place even before the economic crisis hit the region. The measure has proved succesful, especially in attracting investors from Turkey.

Romanian citizenship can be obtained, by request, if a person has lived in the country legally for at least eight years, or has been married to a Romanian citizen for at least 5 years. The terms are halved if the requester is a famous international person or is an investor.

In 2009, the senate adopted a proposal from Toni Grebla, the head of the country's juridical commission, to lower the amount necessary to invest in Romania to 1 million euros, as opposed to the 5 million-euro figure proposed by the government.

"I have a permanent visa for Romania, I was told that I would receive citizenship automatically when we enter the EU or Schengen. I have family here, I have a kid. It would be good to have citizenship as now I am a foreigner and I can not vote or own land; if nothing happens, I’ll inquire in 1-2 years. I am part of Romania even though I was born in Turkey," Sukri Karaaslan, a Kurd who owns restaurants in Bucharest and Giurgiu, told SETimes.

Macedonia, which according to the institute report took about a 30 percent loss in investments for 2012, has proposed amendments to the law on foreigners that would offer citizenship to anyone investing at least 400,000 euros and opening at least 10 jobs in the country.

In Albania, the government recently approved the law on citizenship for the naturalisation of foreigners in cases when "Albania has scientific, economic and cultural interest."

According to the law, any person that proves that they have has invested more than 147,000 euros in the country will get a passport.

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Investing 1 million euros in Romania will result in citizenship. [AFP]

A similar measure is expected to be adopted by Bulgaria's parliament. Under the proposed amendments to the Law on Foreigners, the candidates would have to invest at least 250,000 euros in a Bulgarian company involved in industry, infrastructure, transport or tourism.

The investors would also be required to have lived in the country for at least one year. The purchase of real estate worth 305,000 euros is another way to gain permanent residency status, according to the new proposals.

Current legislation provides permanent residency status to a foreigner who invests more than 509,000 euros in public companies or joint ventures.

George Angelov, a senior economist at the Open Society Institute in Sofia, said that legislation of this type should be adopted following an analysis of other countries' experience and an assessment of the effect it will produce.

"What we have now is a rather theoretical debate, without any true reasoning on either the thresholds, or the expected effects," he told SETimes. "I am not sure that the text we have now would help attract foreign investments to the Bulgarian economy because of the high threshold on the one hand, and the opportunities for circumventing it on the other.

Another factor of the propositions is to offer citizenship, or longer visas, to foreigners who buy property in the region.

Those who invest more than 40,000 in real estate in Macedonia will be allowed to reside there for a year. Currently, foreign nationals must leave Macedonia after three months.

"There is a practice in Western and Central Europe, and especially in Scandinavia, to buy property and invest in Southern European countries and spend a lot of time in these warmer countries," Aleksandar Gjorgjiev, a government spokesperson, told SETimes.

But according to economic analysts, citizenship might be more attractive for investors from Asia who have obstacles travelling to the EU. Most of the regional countries have a visa-free regime with European countries.

"They can really take advantage of these possibilities," Filip Blazevski, an economist at the Centre of Economic Analysis, told SETimes.

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But despite proponents of the new laws, some remain sceptical, fearing that the laws would create a loophole for terrorists and criminals.

"[That is] a small sum of money, speaking on relative terms, for a terrorist organisation, which can use the territory, its opportunities and spaces, which would enable its members to take Albanian citizenship," Ilir Gjoni, MP of the Socialist Party, told Albanian Screen Television.

The practice was ended in 2010 in Montenegro, after deposed Prime Minister Thaksin Shinawatra of Thailand received citizenship despite pending charges of corruption he faced in his home country.

SETimes coresspondents Svetla Dimitrova in Sofia, Erl Murati in Tirana, Katica Djurovic in Podgorica and Gabriel Petrescu in Bucharest contributed to this article.

This content was commissioned for SETimes.com.
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