1. Second residency in Latvia by purchasing real estate
This is the most straightforward program. It’s simple: buy real estate anywhere in Latvia and get a temporary residence permit good for five years.
It used to be that you could purchase 100,000 Latvian lats (about $200,000) worth of property in Riga or any of the other main cities here and get a second residency. If for whatever reason, you wanted to buy property in a village of 500 people, the investment was half of that. On top of that, you only paid government fees of about $150, plus any legal fees.
Starting this month, the government has increased the minimum investment in real estate to 250,000 euros (about $350,000); and they have increased the government fee to 25,000 euros. That means you’ll need close to US$400,000 to get a residence permit and live in Latvia. Also note, you must own the property in your own name, not in an offshore trust or LLC.
Many service providers are still providing outdated information on the real estate visa option. For example, the old requirements called for an investment based in Latvian lats (the former currency which was replaced by the Euro this year), while the new requirements are denominated in euros. Be careful who you deal with.
The most common places to buy real estate are the capital city of Riga and the charming Baltic seaside town of Jūrmala. In fact, Jūrmala has seen a number of developments built exclusively for wealthy foreign investors since no one locally had any interest in the higher price points the projects offered.
The Baltic seaside town of Jūrmala is where many foreign investors have purchased high-priced Latvian real estate to get a residency visa.
It is easy, however, to find liveable properties in Latvia for the minimum investment. A colleague of mine here in Riga is actively buying up real estate in the 100,000 euro range, and may even live in one of those properties himself. In fact, considering its recent adoption of the Euro, Riga seems quite cheap overall.
Keep in mind that while housing prices have been somewhat flat the last couple years, Latvian real estate fell as much as 50% during the global recession (which was why the program was created). I recently shared why real estate in Lithuania may appreciate when the country adopts the Euro next year based on other European countries like Estonia seeing solid property gains when they did the same.
So far, this year, properties in Latvia have seen decent increases, but those seem to have slowed a bit.
2. Second residency in Latvia by starting a business
You can start a business in Latvia and get the second residency based on your position as an owner and board member of the company. The minimum investment option is around $50,000 but requires you to pay taxes of approximately $40,000 per year and has limits on the number of employees and other lesser qualifications.
You can invest substantially more money — around $200,000 — in order to reduce the required tax and other qualifications, but this option seems to be less popular.
The good news about running a business in Latvia is that corporate taxes here are rather low, especially by European standards. In fact, the government went through with its plans to decrease taxes, even during a period of great austerity in the financial crisis.
3. Second residency in Latvia with a bank deposit
The least popular option for Latvian residency to date has been making a loan to the Bank of Latvia or another Latvian credit institution. The minimum amount is about $400,000 and must be held by the bank for five years — the length of your residency permit.
While I would feel comfortable with my money in a Latvian bank (presuming $400,000 wasn’t all I had to my name), the global crusaders of the state have complained that Latvian banks aren’t doing enough to prevent money laundering, particularly from Russians who took their money out of Cyprus (either before or after the Cyprus bank collapse) and moved it to Latvia.
The good news about the bank option — which is not technically a deposit but more of a corporate bond — is that you earn an agreed upon interest rate with your money denominated in either euros or dollars. This option could make sense if you have a high net worth based on liquid assets and you were planning on leaving that part of your portfolio in low-yield bank accounts or treasuries anyway.
Latvia is a dynamic place and, in my view, the “capital” of the Baltic region. Living in Latvia, particularly Riga, is more pleasant than neighbouring Lithuania, and prices are relatively cheap. The issue in some circles now is what Russia’s next move will be, following its annexation of the Crimea, but expats here don’t seem too concerned.
What is clear is that a second residency and possible second citizenship in a European Union country is quite a valuable thing to have, and obtaining that residency in Latvia is a very credible option.