PM proposes reviving investor residence permit program with stricter terms

Prime Minister Andris Kulbergs has submitted proposals to the Saeima Defense, Internal Affairs and Corruption Prevention Committee on the Immigration Law amendments that the President has returned for a second reading. The PM suggests retaining the opportunity for foreign investors to obtain temporary residence permits in exchange for investments, while substantially increasing their contributions to the state budget.

Under the proposal, a residence permit for up to five years could be granted to a foreigner who invests at least 100,000 euros for no less than seven years in a fund managed by a state-established alternative investment fund manager, or 150,000 euros in a fund managed by another manager. In the latter case, at least half of the fund's investments would need to go into the state fund or new residential construction projects in Latvia.

Instead of the current one-off payment, Kulbergs proposes an annual state budget payment of 10,000 euros. Over five years, one investor would thus contribute 50,000 euros. The same requirements would apply to renewed permits.

The PM notes the previous programme failed to meet its goals: it attracted up to 200 investors per year, but budget contributions were symbolic. He calls for a significant overhaul while keeping the scheme competitive among EU countries.

Kulbergs also cites plans to build around 15,500 new apartments in Riga and its surroundings over the next three to five years. Construction costs are estimated at 1.65 billion euros, developer revenues at about 2.4 billion euros, and at least 500 million euros would be paid in taxes. Roughly 30% of the apartments are planned with Latvian capital, 25% with Estonian capital and 45% with capital from other countries.

If 1,000 investors were attracted, the state budget would receive 50 million euros over five years, 82.5 million euros would be invested in projects with the state alternative investment fund manager, and 52.5 million euros according to private fund strategies. If the investors became Latvian taxpayers, additional revenue could reach up to 300 million euros over five years; in the most favourable scenario, 1,000 investors could bring Latvia up to 500 million euros.

The PM is also working on a separate draft law on a fixed tax payment for foreigners, which would let residence permit holders become tax residents by paying 60,000 euros annually. If 1,000 foreigners took part, the budget would gain 60 million euros per year, or 300 million over five years.

The committee has set a five-day deadline for proposals, and the Saeima could vote on the law again on 20 August. The President previously asked parliament to reassess several aspects of the new regulation, including the terms of the investment programme.