Latvia is a small European state located next to the Baltic Sea that’s positively swimming with diverse cultures and a wide range of landscapes. It has a very strong national identity and takes much of its pride from its beautiful capital city, Riga, which boasts many cultural artefacts including museums, churches, wooden and art nouveau architecture and even a medieval Old Town.
For HNWIs, it is also an attractive and viable option for obtaining citizenship by investment. Within the Baltic States, Latvia has been most open to citizenship by investment, offering the most cost-effective options for investors to become a Latvian resident. As a result, the country has enjoyed a very impressive GDP growth, with 5.6% growth in 2012 and 4.5% growth this year.
So why obtain citizenship in Latvia? Well, for starters, being a Latvian citizen will give the investor visa free access to countries in the EU (excluding the UK & Ireland). If you have residency in Latvia for 10 years, you will also be provided with an EU passport, which is extremely useful for the various travel privileges that it provides.
If these benefits are attractive to you, there are three ways you can go about securing Latvian citizenship:
Firstly, through purchasing real estate in Latvia. This will afford you a temporary residence permit for at least five years, provided you invest USD 350,000 and pay the government fee of USD 28,000. The property must be in your own name and strictly not in an offshore trust or LLC. Popular locations to invest include the capital, Riga, and Jūrmala which has seen many recent developments targeted directly at wealthy foreign investors. When looking for advice on purchasing real estate, be sure to be quoted in euros, not the old currency of Latvian Lats, which are no longer the official currency.
Secondly, you can gain citizenship through starting a business in Latvia. The minimum investment required is only USD 50,000 with approximately USD 40,000 per year in the form of tax to the government. The more money you invest in your business, the less tax you will be charged in proportion and so perhaps this is the most viable option for those who are looking to trade from Latvia. Also, the corporation tax charged is considerably low.
The third option available is to deposit with a Latvian bank. If you make a loan with a Latvian bank or credit institution for a minimum of five years, you will gain citizenship in the country for the same period of time. The minimum investment required is USD 400,000, but the advantage is that you agree a fixed rate of interest with the bank. If you have USD 400,000 or more sat in a bank account not being spent, then investing it in Latvia could return money on your investment and permit you citizenship all at once.
If one of these options are attractive to HNWI considering gaining Latvian citizenship then we would advise them to act quickly as these options are only going to become less obtainable and more expensive in the future. For example, the minimum investment required for property in Latvia to gain citizenship used to be USD 200,000 but is now 350,000 USD. The difficulty of obtaining citizenship and the cost involved in doing so is only going to increase year-on-year so act now to secure the most advantageous scenario possible for your finances and your family’s wealth.