As of 1 July 2010, new amendments to the Immigration Law came into effect providing the right to request a temporary residence permit in consideration for different kinds of investment.
Regularly law office INLAT PLUS gets letters from foreigners regarding new possibilities, as well as queries asking for legal help in carrying out the investment and in obtaining a temporary residence permit (hereinafter referred to as TRP). In order to reduce the amount of false transactions not allowing obtainment of TRP, Law office INLAT PLUS has made a review of the regulatory enactments and would like to share its experience.
1. If a foreigner has invested at least 25000 LVL into the equity capital of a capital company and within the economic year the company has paid taxes to the state and local government budget in the amount of at least 20000 LVL.
a) investment shall be made after July 1, 2010;
b) TRP is available for foreigner’s spouse and children under 18;
c) TRP may be requested as soon as foreigner’s contribution to the equity capital is registered in the Commercial Register;
d) the payment shall be made by the foreigner, i.e. the transfer shall be made from the foreigner’s bank account to the account of the company;
e) upon obtaining TRP a foreigner will be issued a decision indicating the term for providing evidence in respect of the tax payment made in the amount of 20000 LVL (decisions received in August indicate January 15, 2011 as the term for providing relevant evidence);
f) TRP is issued for a term of 5 years – within a 5-year period foreigner may not reduce his contribution in the equity capital of the company. TRP shall be registered annually, which means that a foreigner (and his family) shall be in Latvia on the moment of registration;
g) Documents for obtaining TRP shall be submitted by the foreigner outside the Schengen Area.
– In addition to the standard documents that are submitted (application form, photo, police clearance certificate, document confirming the envisaged place of residence in the Republic of Latvia, health insurance policy), it is also necessary to receive a certificate of health from the medical institution of Latvia proving that a foreigner has no such health disorder or disease specified in the relevant regulatory enactments, or an agreement regarding entry of the foreigner for medical treatment in an inpatient medical treatment institution;
– Office of Citizenship and Migration Affairs shall take a decision within 30 days in case there’s no necessity to carry out additional examination (additional examination is necessary for such countries as Afghanistan, Iraq, Iran, etc., as well as for persons born and living in Chechnya, Dagestan and Ingushetia). In this case the decision shall be taken within 90 days;
h) A foreigner shall prove that he/she has the necessary funds for residing in Latvia. If a foreigner is only a shareholder of a limited liability company (SIA), the amount of the necessary subsistence shall be equal to 3 minimum monthly wages (i.e. LVL 540,- per month), and one minimum monthly wage for the spouse’s subsistence (i.e. LVL 180,- per month). For each child a necessary subsistence shall be provided in amount of 60% of a minimum monthly wage (i.e. LVL 108,- per month).
2. If a foreigner has carried out financial investments to a credit institution of Latvia in amount of at least LVL 200000,- in the form of subordinated capital of a credit institution (subordinated debt or subordinated debentures).
TRP may be requested as soon as a credit institution issues confirmation that a foreigner has concluded the necessary agreements and made the relevant investment. Such investor has to provide evidence of necessary subsistence as well. In this case necessary subsistence shall be in the amount of one minimum monthly wage (LVL 180,- monthly).
3. If a foreigner has obtained one or more immovable properties in Riga, Riga planning region or other cities the value of which shall be at least LVL 100000,-, or one or more immovable properties outside Riga, Riga planning region or other cities the value of which shall be at least LVL 50000,-.
a) Immovable property shall be registered in the Land Register after the 1st of July, 2010;
b) The purchase price shall be paid after the 1st of July, 2010;
c) TRP is available for foreigner’s spouse and children under 18;
d) TRP may be requested as soon as purchase price has been paid and the ownership rights in respect of the property registered in the Land Register;
e) The payment shall be made directly by the foreigner, and namely, from foreigner’s bank account to the seller or with the help of the escrow account;
f) At the moment there are no restrictions in the Immigration Law in respect of getting a mortgage in order to buy real estate. However, Office of Citizenship and Migration Affairs, as well as the drafters of the amendments suggest avoid buying real estate in consideration for loan funds. Office of Citizenship and Migration Affairs also expressed its opinion on the necessity of the law amendments prohibiting foreigners from getting loans in the banks of Latvia. Though it’s a disputable issue, it’s up to foreigner to decide whether to get a loan for buying real estate or not. Nevertheless, at this moment no one has risked to find out the official opinion of the Office of Citizenship and Migration Affairs regarding this issue.
g) In consideration for LVL 100000,- a foreigner may buy one or more immovable property objects in Riga, Daugavpils, Jelgava, Jekabpils, Jurmala, Liepaja, Rezekne, Valmiera and Ventspils.
h) In consideration for LVL 100000,- a foreigner may buy one or more immovable property objects in Riga planning region (former Riga regions, as well as the territory along gulf of Riga). Map can be found at the following address: http://www.rpr.gov.lv/pub/index.php?id=6
i) On the rest of the territory of the Republic of Latvia a foreigner may buy one or more properties in consideration for LVL 50000;
Though no one is guaranteed to obtain TRP despite carrying out the abovementioned investments, still all of the clients of Law office INLAT PLUS have successfully received residence permits.
Most of the times foreigners are worried about transaction process. For example, a client has acquired real estate shortly before celebration of Midsummer losing the right to request for a TRP. However, the Law office INLAT PLUS discovered material violations of the seller’s obligations arising out of the agreement, which in turn provided a possibility to execute termination of the agreement unilaterally. Nevertheless, the aforementioned could not guarantee that the seller would have the financial capacity in order to fully return the purchase price to the buyer. In this regard, the client decided to register his property in the name of spouse and therefore obtained eligibility to request for TRP.