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Economy

Wealthy Chinese Cash in On Greek Golden Passports

February 13, 2020

ATHENS – While the New Democracy government is going about the business of trying to kick start a slow recovery from a near decade-long economic and austerity crisis, it’s raking in cash by selling residency permits and European Union passports to rich foreigners.

Lining up for the bargain – it takes only 250,000 euros ($272,062) in investments to qualify, queues of the wealthy and super-rich eager to get their hands on documents allowing free travel in the bloc are coming from all over, including Turkey and Russia.

But especially from China, whose government has been making inroads into the EU through the port of Piraeus, operated 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’s been the sale of the so-called Golden Passports that have helped propel the rebound, despite criticism the program is open to money laundering and a criminal activity conduit, as well as investors scooping up properties to qualify and then turning them into short-term rentals.

Through sites such as Airbnb, that has nearly emptied whole Greek neighborhoods of residents forced to leave so their apartments can be used for the transient renters, changing the character of areas that brought them there in the first place, and also driving up rents.

In a feature in The Los Angeles Times, reporter Maria Petrakis illustrated how the visas were being used by rich Chinese, especially through the real estate sector that is an easy way to hit the level needed to get one.

In downtown Athens, a former bank branch near Parliament, in Syntagma Square, has been turned into the offices of V2 Development, a real estate development company showing off properties for sale to get the golden ticket.

That has helped the sector recover as well from a crushing crisis that saw people unable to give away properties that had become almost valueless but taxed at high levels at the same time by governments desperate for cash.

The sale of so-called Golden Visas that give rich foreigners residency permits and European Union passports has been big business for Greece with 2,008 more sold in 2019 through Dec. 1, data from Enterprise Greece showed.

The visas are given to the wealthy who invest at least 250,000 euros ($277,714) in properties while those in the Diaspora with Greek heritage who don’t have that kind of money have to wait two years or more for residency permits or dual citizenship.

Greece has sold off 4,059 Golden Visas since the program began in 2013 with the numbers soaring recently, especially to rich Chinese and Russians.

Golden Visas were given to 4,129 Chinese investors as links between the country have gotten closer, drawing a warning from US Ambassador Geoffrey Pyatt that China is trying to buy undue influence in Greece and using the country as an entry to the European Union.

From early September to early December, Greece issued 742 new five-year residence permits to non-EU investors and their families, with 90 percent (665 permits) going to Chinese buyers.

Bank of Greece data showed a 94 percent annual rise in inflows of money for buying property in January-June 2019 to 736 million euros ($817.59 million) as the New Democracy government is also wooing more of the rich by offering a flat 100,000-euro ($111,085.50) if they make Greece their residence at least six months a year and place to declare their annual taxes.

Some 13,075 Chinese nationals and family members received residency in 2019, compared with 1,342 Turks and 1,000 Russians, the paper said. “If it weren’t for the Chinese I wouldn’t be talking to you right now,” said Vaggelis Kteniadis, 47, the owner of V2. “The Chinese are tired of being forbidden, not having options.”

Now there’s worry that the coronavirus that began in China and spreading – Greece went so far as to temporarily close its visa office in China, stopping the flow of tourists from there which have been a big boon and limiting their ability to buy the visas.

“It’s logical that sales will be affected until the virus is contained, but afterward it will be much busier than before,” Kteniadis said. “They will want to avoid living through similar incidents in the future.”

Greece sells itself cheap. Cyprus requires a minimum 2-million euro ($2.18 million) investment, but the bargain basement Golden Visas have proved a big lure for people with so much money that 250,000 euros is pocket change.
It’s brought a boom for the residential property market that the paper said fell 40 percent in value during the crisis, the biggest drop in the EU. And while there aren’t specific figures, the 6,304 primary permits – 70 percent to Chinese – will bring in 1.5 billion euros ($1.63 billion.)

Kteniadis said the vetting process is strong enough. “These people are millionaires but have to sign forms and prove they’re not elephants each time they travel,” Kteniadis said. “It’s humiliating,” if not as difficult a process for Greeks of the Diaspora to get residency or citizenship.

“Whoever wants to invest in Greece this way, they are 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 people interested in fixing that.”

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