Grexit impact: Is Greece's cheap residence by investment viable?

The lowest minimum investment amount required to gain residency in a European country by investing in a local real estate sector lies in Greece.

Not surprising, as Greece can use all foreign investment it can possibly attract, while it has little incentive to offer.

However, a potential departure of Greece from the Eurozone - the anticipated Grexit - does not necessarily mean a departure from the Schengen zone.

New residents would still enjoy visa-free travel within this geographic area.

Is a Greek residency through investment, viable then?

We asked the expert, Henley & Partners, an immigration consultancy office.

Greece offers the cheapest real estate option within its residence-by-investment programme among countries in Europe.

This means that for a minimum investment amount totaling €250,000 in the local real estate market, the investor is granted residency in the country.

The amount can be the sum of several purchases on the market, the applicant does not have to be in Greece for the application and the visa is generally issued within 4-6 weeks.

However, it is a residency that is granted, and unlike other residence programmes where this residency can be turned into citizenship after several years, this is not the case in Greece.

The residency is valid for 5 years and can be renewed up to 5 years, but that is all. The benefit would have to be in residing in Greece for a period of time, perhaps capitulating on the investment made.

That is not recommended, says Dominik Zunkovic, Manager at  Henley and Partners.

"We have never recommended the Greek residence-by-investment programme to our clients."

In its Global Residence Program Index 2015, which ranks the 19 residence-by-investment and 7 citizenship-by-investment programs, the immigration expert ranked Greece's programme 18.

"We anticipated future insecurity in the country and did not want to risk our clients having a negative experience or a loss of their investment," said Dominik.

Indeed, a countries’ stability is one of the main factors investors are recommended to take into consideration when selecting their new destination.

As attractive as an investment programme may be, the long term benefits of residing or doing business in that country should be apparent.

As such, there are better options to consider when it comes to residency or citizenship in Europe.

"Clients with an interest in investing in Europe tend to go for programs of countries such as Cyprus, Malta and Portugal," said Dominik.

Cyprus has the highest minimum investment amount -EUR5 million- but citizenship can be granted within three months. Further, the investment amount can be shared if 5 people contribute EUR2.5 million each.

Malta offers residency and ultimately citizenship for a minimum investment amount of €150,000 in bonds or shares, and €350,000 in real estate, in addition to a lump-sum contribution of €650,000 to the Maltese government.

Portugal offers residency for an investment amount of €350,000, where's citizenship can be obtained, but against tough criteria.

Greece is currently struggling with an unmanageable public debt, and has rejected a latest bailout programme presented by Eurozone countries based on its terms.

An alternative option that has been discussed by Greece as well as Eurozone countries is the departure of Greece from the Eurozone and a return to its previous drachma, which would allow an increase in export and tourism and hence boost the local economy.
 

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