Monday,19 November, 2018
Current issue | Issue 1403, (26 July - 1 August 2018)
Monday,19 November, 2018
Issue 1403, (26 July - 1 August 2018)

Ahram Weekly

Residency with a price tag

Egypt hopes a new law granting residency to foreigners will bolster investments and hard currency inflows, reports Ahmed Morsy

 

Residency with a price tag
Residency with a price tag

In recent years a flourishing global industry has developed as countries offer foreigners the chance to acquire residency, and in some cases citizenship, in return for real estate and business investments. Now Egypt has decided to follow suit.

Last week parliament passed four new articles to laws no 89/1960 and no 26/1975 that regulate the acquisition of residency and citizenship for foreigners. As a result of the changes foreigners can apply for Egyptian nationality after residing in Egypt for five consecutive years and depositing a minimum of LE7 million (around $390,000) in a state-owned bank.

The replacement for Article 17 of Law 17/1960 states that “in terms of residence foreigners are divided into four categories: foreigners with special residence, foreigners with regular residence, foreigners with temporary residence and foreigners with depository residence.” This last category is a new addition.

Changes to regulations governing the entry and residence of foreigners mean the new law reads thus: “Foreigners with depository residence are those who have a cash deposit. The minister of interior shall issue a decision, after the approval of the cabinet, to determine those who are selected for residency, its duration, the amount of the deposit and its currency, regulating the deposit and refund processes and the banks in which it will be deposited... provided that it be not less than LE7 million or its equivalent in foreign currency.”

A third change, to the Egyptian Nationality Law 26/1975, states that “a decision by the interior minister may grant Egyptian nationality to every foreigner who has resided in Egypt with a deposit for a period of at least five consecutive years prior to applying for naturalisation... If the application for naturalisation is accepted, the amount of the deposit goes to the State Treasury.”

The amendments were met with competing claims. Some claimed they will endanger national security while others argued they will help revitalise the economy and boost investments.

“Countries all over the world are beginning to give nationality to their foreign residents,” said House of Representatives Speaker Ali Abdel-Aal. “But there must be conditions to ensure the seriousness of the requests. Among these conditions the most important is that national security and pubic order is not compromised.”

Responding to criticisms of the law, Finance Minister Mohamed Maait said in a televised interview nationality would only be granted to encourage investment in Egypt.

Parliament’s Defence and National Security Committee issued a report last week in which it said that “the amendments aim to promote Arab and foreign investments in the country and boost confidence.”

Though the amendments were approved by a majority of the MPs many voiced reservations when the legislation was being discussed.

MP Haitham Al-Hariri said the justifications presented in support of the changes were null and void given that foreign investors wanted the facilitation of their visa and residency applications rather than to acquire Egyptian nationality.

On his Twitter account MP and journalist Mustafa Bakri insisted Egyptian nationality should not be commodified. “Egypt is a targeted country and always exposed to extreme risks as the conspirators are many. Egypt is for Egyptians... I have objected to the nationality law and will still reject it. Egyptian nationality cannot be bought or sold,” Bakri wrote.

A growing number of countries offer residency and even citizenship in exchange for investment in real estate.

Spending $300,000 or more on a property in Greece secures residency for non-EU citizens and the right to live and work in any EU country. After residing for seven years in Greece individuals may then qualify for full citizenship.

In Hungary non-EU citizens must spend $356,000 or more on property to be eligible for residency and live eight years in the country to qualify for citizenship. Non-EU citizens in Belgium may spend $416,000 on real estate investment in return for residency and reside for more than five years for full citizenship.

Spending $595,000 or more on a property in Portugal will entitle you to residency and, after six years, full citizenship. In the Caribbean island republic of Dominica spending $200,000 on property will make you eligible to apply for a Dominican passport. In Turkey buying a property of any value will get you residency but you’d need to stump up $1 million or more to qualify for instant citizenship, and will have to commit to living in the country for three years too.

Cyprus offers the world’s priciest investment for citizenship programme. A property investment of $2.4 million or more is the minimum requirement for citizenship.

According to the International Monetary Fund (IMF), there is a growing demand for economic programmes that allow foreigners to purchase citizenship or residency permits in return for a substantial investment and in the current geopolitical climate people are looking for “political and economic safe havens”. Although, according to the IMF, many of these programmes have been in place for some time, there has been a surge in applicants and capital inflow.

The IMF reports that countries which apply such citizenship programmes have witnessed a boost in economic growth, employment and real estate demand. Portugal’s golden visa ARI scheme reported 2.4 billion euros (90 per cent invested in real estate) inflows in just four years. Malta reported over a billion euros in inflows since the inception of its own scheme. Cyprus’ recovery from its 2013 banking crisis was boosted when the island introduced a citizenship for sale scheme. Dominica recovered from the damage caused by tropical storm Erika that destroyed 90 per cent of the country with the help of funds from its citizenship for sale programme.

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