On Wednesday, 25 September, the Defence, Internal Affairs and Corruption Prevention Committee of the Saeima examined the government’s annual report on issuing temporary residence permits to foreign investors and decided that provisions for issuing temporary residence permits to foreigners investing in capital companies need to be changed.
Ainars Latkovskis, Chairman of the Committee, pointed out that foreigners investing in the equity capital of a company often fulfil their obligations only nominally, and thus the goal of the law is not reached. Therefore, the relevant ministries have to review the criteria established for investing in capital companies and draft necessary amendments to the Immigration Law.
Currently, the Law sets forth that a foreigner can request a five-year residence permit if he/she has invested LVL 100,000 in the equity capital of a an existing or new capital company. One can also invest a smaller amount, namely, LVL 25,000, in a capital company which does not have more than 50 employees, whose annual turnover does not exceed LVL 7 million and which pays at least LVL 20,000 in annual taxes into the state budget.
Maira Roze, Deputy Head of the Office of Citizenship and Migration Affairs, drew the attention of MPs to the fact that current legal loopholes have enabled investors to team up in groups and make the minimum investment of LVL 25,000 into the same company. Thus each of these investors nominally complies with the provision according to which the company has to pay LVL 20,000 in taxes, but actually the taxes come from only one company. Therefore, other rules are needed for cases when several foreigners want to invest into one and the same company. Roze reported that investments in companies amount to only 5% of the total investments, but most of them go to real estate. Maira Roze also noted that the demand for temporary residence permits has risen in recent months, and permits are mainly requested by citizens of Kazakhstan, Russia and Uzbekistan.
During today’s meeting of the Committee, MPs also wanted to find out whether the competent authorities have analysed the long-term impact of these legal provisions, how many foreigners receive temporary residence permits, how many of them settle in our country and which regions get the most investments.
Members of the Committee also asked if the competent authorities can identify bogus real-estate transactions, if the steep increase in demand for real estate distorts the market and if applicants for residence permits are also scrutinised by national security agencies.
Saeima Press Service