EXECUTIVE SUMMARY – INVESTORS’ RESIDENCE SCHEMES IN LATVIA

General background

The investors’ residence scheme in Latvia was introduced by amending the Immigration Law in
2010.1 This step was taken as a reaction to the financial crisis that hit Latvia in 2008. The idea behind
this scheme was to attract foreign investors to facilitate Latvia’s economic recovery and growth by
activating the real estate market and creating new jobs.

The amendments to the law allowed foreign investors to obtain a temporary residence permit after
purchasing real estate in Latvia, investing into the equity capital of a capital company (i.e. limited
liability or joint stock company), establishing a new capital company or investing in subordinate
obligations of a Latvian credit institution (i.e. lending money to a bank). Since then, it is also possible
to obtain a residence permit to invest in State securities and innovative projects.

For each case, the eligibility conditions are set out in the Immigration Law. The application
procedure is laid down in the Cabinet Regulation No 564 of 21 June 2010 on Residence Permits.2

The Office of Citizenship and Migration Affairs (OCMA) is the competent authority for granting
residence permits.3 The Consulates of the Republic of Latvia are competent to accept residence
permit applications. However, vetting and checks of the submitted documents is carried out by the
OCMA. OCMA does not check the legality of investment funds. It relies on the Security Police and
financial institutions in relation to any suspicions surrounding money transfers, as required by law. 4
Any irregularity will be reported to the Latvian Financial Intelligence Unit. The OCMA also relies
on information verified and stored (usually, in public registers) by other State authorities and non-
public bodies: the State Land Service in relation to investment in real estate; the State Enterprise
Register – in relation to investment in business, Latvian central securities depository – in relation to
investment in State securities; and the Latvian Investment and Development Agency – in relation to
investment in innovations. For evidence of investments in liabilities of credit institutions, the OCMA
relies on information provided by the credit institution in whose liabilities the investor has invested.

Conditions and procedure

Conditions
Third-country nationals who wish to apply for a temporary residence permit under the investors’
residence scheme in Latvia must make an investment. The table below shows the type of
investments that third-country nationals can carry out to apply for a temporary residence permit, the
minimum financial threshold of each type of investment and the period of validity of the issued
temporary residence permit depending on the type of investment. 5

1
Immigration Law (Imigrācijas likums), OP: "Latvijas Vēstnesis", 169 (2744), 20.11.2002, last amended on 4 July 2018,
available at: https://likumi.lv/ta/en/en/id/68522-immigration-law.
2
Regulation No 564 of 21 June 2010 on Residence Permits (Uzturēšanās atļauju noteikumi), OP: "Latvijas Vēstnesis", 101
(4293), 29.06.2010, available at: https://likumi.lv/ta/en/en/id/212441-regulations-regarding-residence-permits.
3
The website of the Office of Citizenship and Migration Affairs, available at: http://www.pmlp.gov.lv/.
4
The Law on the Prevention of Money Laundering and Terrorism Financing ( Noziedzīgi iegūtu līdzekļu legalizācijas un
terorisma finansēšanas novēršanas likums), OP: "Latvijas Vēstnesis", 116 (3900), 30.07.2008, available at
https://likumi.lv/doc.php?id=178987.
5
Article 23(1) Immigration Law, Points (28) to (33).

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 Type of investment Minimum financial threshold Temporary residence
permit

Real estate EUR 250 000 Up to 5 years

+ 5% payment to the State budget

Business EUR 50 000 or 100 000 investment into capital companies depending on Up to 5 years
the company’s size (i.e. turnover and the number of persons employed)
+ EUR 10 000 payment to the State budget

Subordinate liabilities of EUR 280 000 Up to 5 years

credit institutions + EUR 25 000 payment to the State budget

State securities EUR 250 000 Up to 5 years

+ EUR 38 000 payment to the State budget
Innovations EUR 30 000 within the first 6 months Up to 3 years
+ EUR 60 000 within 18 months

The fulfilment of investment requirements is checked both at the application stage and ex-post at the
annual registration of the permit (any residence permit allowing a stay of more than one year should
be annually registered; failure to comply is a reason to annul the permit) .6

However, there are differences. Investments in start-ups are only checked ex-post in line with the
requirement to invest within the first 6 and 18 months from receiving the permit. Investments in State
securities are only checked once – that is, when the investor collects his or her permit as there is no
possibility for early withdrawal.

In the application stage, the OCMA relies on information provided by the applicant and other State
authorities. In 2015, for instance, 20 per cent of all refusals were based on security considerations.
Refusals to grant residence permits are eligible for appeal.

Investors must submit the following evidence to the OCMA for fulfilment of the investment criterion:
 Investors in credit liabilities must submit a document issued by the Latvian financial
institution confirming the foreigner’s investment in the institution’s subordinated liabilities; 7
 Investors in real estate must submit a document attesting the non-cash payment for the real
estate; a document attesting the absence of property tax debt, the opinion of a certified
property appraiser about the market value of the property (if the property’s value is below its
cadastral value);8
 Investors in State securities must submit a signed request submitted to the depository to
acquire securities;9
 Investors in start-ups must submit an application describing the products to be created or
developed, and the information on the planned business activities in the next three years.
 No specific documents are required from business investors as the increase of equity capital
or the establishment of a new company is registered in a State Enterprise Register,
accessible by the OCMA.

When receiving the residence permit all investors must prove that they have paid the required
charges (one-time payments to the State budget ranging from EUR 10 000 to 38 000 depending on
the nature of the investment made).10

6
Article 22(2) of the Immigration Law.
7
Point 49 of Regulation No 564.
8
Point 56 of Regulation No 564.
9
Point 73.4 of Regulation No 564.
10
Article 23(1) Immigration Law, Points (28) to (33). See table at the beginning of the section “Conditions and procedure”
for specific amounts.

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Apart from the investment requirements, a foreigner must have a valid travel document, visa (if
required11), health insurance, sufficient means of subsistence and an address for his or her stay in
Latvia (however, the physical presence of the applicant is not required).12

Procedure
Cabinet Regulation No 56413 sets out detailed application procedure. There is no specific procedure
for foreign investors – all applicants (including thus investors and their family members) must follow
the same standard procedure. Only in relation to the required investment do the required specific
supporting documents vary depending on the type of investment (see above ‘Conditions’).

The procedure starts with filing the application for a residence permit (in the standardised form,
available online) in person to the OCMA (or the Latvian diplomatic mission abroad, who will
forward it to the OCMA), accompanied by the following documents:14 valid travel document (e.g.
passport); proof of subsistence/ sufficient funds (for example, a bank statement); document proving
that the applicant has a place to stay in Latvia (such as rent agreement); certificate on the absence of
criminal record (for applicants over 14 years of age; applies only to those third-country nationals who
need visa to enter Latvia); and document certifying the payment of the State fee (document review
within 30 days – EUR 150; 10 days – EUR 300; 5 days – EUR 450). Apart of these, the necessary
documents proving the investment, including the one-time payments to the State budget, must be
provided too (see above ‘Conditions’).

The OCMA has 30 days since the date of the submission of the application to issue a decision.15 If the
decision on issuing residence permit is positive, 16this will be issued for a duration of up to five years
(three years in the case of start-ups). The applicant can receive the permit in person at the OCMA
within three months after the positive decision. 17 This deadline, at the discretion of the OCMA, can
only be extended for investors in start-ups. At the time of collecting the permit, the applicant must
also present: a valid health insurance policy for a year 18 and a health certificate issued by a Latvian
health care institution stating that the foreign national does not suffer from tuberculosis in active
phase.19

The application can be turned down in view of general grounds of refusal (applicable to all third-
country nationals) or specific grounds of refusal (specific to investors). The former refer to the
unfulfillment of the legal conditions on the application (e.g. all required documents have not been
submitted, they are false or obtained unlawfully, the legal conditions – e.g. sufficient means, valid
travel document, health insurance – are not met) or general grounds in regard of public safety, health
and order (e.g. the foreigner represents a threat to these) or general grounds regarding legal migration
(e.g. the foreigner is unlawfully residing in the territory or is subject to a prohibition of entry). The
specific grounds of refusal refer to the unfulfillment of the investment requirements (see above
‘Conditions’).

11
Third-country nationals may be exempt from the requirement to hold visas based on visa waiver agreements between
Latvia and other States and Council Regulation (EC) No 539/2001 of 15 March 2001 listing the third countries whose
nationals must be in possession of visas when crossing the external borders and those whose nationals are exempt from that
requirement, OJ L 81, 21.3.2001, p. 1–7.
12
Point 28 of Regulation No 564.
13
Regulation No 564 of 21 June 2010 on Residence Permits (Uzturēšanās atļauju noteikumi), OP: "Latvijas Vēstnesis", 101
(4293), 29.06.2010, available at: https://likumi.lv/ta/en/en/id/212441-regulations-regarding-residence-permits.
14
Point 28 of Regulation No 564.
15
Article 33(1) Immigration Law.
16
Decisions on temporary permits are taken within 30 days from the day application was submitted based on Article 33(1) of
the Immigration Law.
17
Point 75 of Regulation r No 564.
18
There is no specification in Latvian laws and regulations of what ‘valid health insurance’ implies. Nonetheless, it can be
implied that valid health insurance must be obtained either in the country of origin, or in Latvia.
19
Point 73 of Regulation No 564.

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Pursuant to Article 40(1) and (2) of the Immigration Law, third-country nationals may appeal the
decision regarding the refusal to issue (or register annually) a residence permit to the Head of the
OCMA within 30 days after the day of entry into force of the decision. All decisions of the Head of
the Office can be further appealed before the Administrative Court.

The temporary residence permit issued to a foreign investor may be renewed for the same duration
as the initial permit. The law does not limit the number of renewals. The investment does not need to
be renewed, but the initial conditions for granting the permit should still be fulfilled. In relation to
some forms of investment the law imposes additional requirements for the renewal of residence
permits. For instance, investors in property, business and credit liabilities must pay a one-time charge
of EUR 5 000 to the State budget.

Security and ex-post checks

The background of the applicant is subject to security checks (i.e. clean criminal record). Although
no information was retrieved on whether international databases (Schengen Information System,
Europol and Interpol databases, etc.) are consulted in carrying out these checks, it can be assumed that
at least the Schengen Information System is consulted as one of the reasons for refusal of the permit is
that the person is banned from entering the Schengen Area after being issued a residence permit. The
application for a temporary residence permit can be, thus, refused on the basis of security and due
diligence checks.20 The latter in particular applies to security and criminality checks. All applications
from foreign investors are sent to the Security Police for background checks.

The OCMA does not check the legality of investment funds. It relies on the Security Police and
financial institutions ensuring money transfers that any suspicions in this regard, as required by law,
will be reported to the Latvian Financial Intelligence Unit.21 The checks are carried out during the
application for the temporary residence permit. Information provided in the application is checked
vis-à-vis the supporting documents submitted together with the application (see ‘Conditions’). Checks
on investments are made in accordance with anti-money laundering legislation.

Family members
Family members of foreign investors (their spouses, underage children and persons – including
adults – under their guardianship) also have the right to temporary residence. There is no special
procedure for family members to apply for a residence permit – the same general procedure applies. 22

Monitoring of the proceedings and authorities involved

There is no cap for the investors’ scheme.

As any State institution also the OCMA reports annually about its work to the Government. The
Office prepares a general overview of its work results as well as detailed overviews per subject
matter. The most recent report on the investors’ residence scheme for the period from 1 July 2016 to
30 June 2017 was presented to the Government in November 2017 23. This includes information on the
number of successful and refused applications per type of investment, trends compared to previous
reporting periods, economic impact and financial revenues related to residence of foreign investors
and other information.

Regarding scrutiny mechanisms, since the Government is accountable to the Parliament, it reports
annually also to the competent committees of the Parliament. In addition, Article 27 of the

20
Information from the website of the OCMA, available at: http://www.pmlp.gov.lv/en/home/services/residence-permits/in-
what-cases-may-the-rp-issued-to-you-be-annulled.html
21
Information obtained from the OCMA, 16 July 2018.
22
Point 4 of Article 23(1) Immigration Law.
23
The Office of Citizenship and Migration Affairs (OCMA) 2017 Report on progress and results of implementing Article
23(1), points 3, 28, 29, 30 un 31 of the Immigration Law, available at http://tap.mk.gov.lv/lv/mk/tap/?pid=40441522.

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Constitution authorises the parliament to exercise parliamentary scrutiny. The Parliament and its
committees have the right to submit requests to the Government. The Government must respond to
these requests by providing all the relevant information. In relation to migration matters and, thus, the
investors’ residence scheme, there are two main committees which conduct parliamentary scrutiny.
These are the Citizenship, Migration and Social Cohesion Committee 24 and the Defence, Internal
Affairs and Corruption Prevention Committee25.

The Defence, Internal Affairs and Corruption Prevention Committee has been actively scrutinising the
investors’ residence scheme and, in particular, the number of successful applications. It has proposed
various amendments to the Immigration Law to prevent abuse of the scheme and to limit the number
of successful applications (such as introducing a scheme cap26, however, this proposal was not
supported).

Rights
A temporary residence permit gives the foreigner the right to reside in Latvia for the duration of the
permit (up to three or five years depending on the type of investment). The immigrant investor also
acquires the right of travelling within the Schengen Treaty Member States. The immigrant investor
who has purchased real estate, invested in business, State securities or subordinate obligations of a
credit institutions is entitled to perform commercial activity (also as self-employed) or to be
employed without restrictions.27 This is specified on their residence permit. Meanwhile, investors in
start-ups are limited in their rights to commercial activity or to be employed: they can only be
employed or participate in the company developing the innovative product. The law explicitly forbids
them to be employed by any other employer or participate in an official capacity in any other capital
company.28 This limitation in terms of market access is also specified on the investor’s residence
permit.

The Single Permit Directive29 has been transposed to Latvian legislation by the Immigration Law and
Regulation No 564. The rights on equal treatment (Article 12 of the Directive) are fully applicable to
investors and their family members.30 Such rights include the right to equal treatment with Latvian
nationals with regard to working conditions; education and vocational training; recognition of
diplomas, certificates and other professional qualifications; branches of social security, including
healthcare; access to goods and services, including procedures for obtaining housing; freedom of
association and affiliation and advice services afforded by employment offices. Furthermore, family
members of all investors are granted full access to labour market and given full rights to participate in
business activities (including as self-employed) 31.

No additional rights or benefits, such as tax benefits are granted to foreign investors. 32
24
Website of the Citizenship, Migration and Social Cohesion Committee, available at: http://saliedetiba.saeima.lv/en/.
25
Information about the Defence, Internal Affairs and Corruption Prevention Committee, available at:
http://www.saeima.lv/faktulapas/2501_Aizsardzibas_komisija_faktu_lapaENG_SCREEN.
26
Proposal to amend the Immigration Law submitted by the Defence, Internal Affairs and Corruption Prevention Committee,
available: http://titania.saeima.lv/LIVS11/SaeimaLIVS11.nsf/0/7FF90A1790265A8DC2257C05003EE74E?OpenDocument.
27
Article 9(5), points 13-15 and 24, of the Immigration Law.
28
Article 23(13) of the Immigration Law.
29
Directive 2011/98/EU of the European Parliament and of the Council of 13 December 2011 on a single application
procedure for a single permit for third-country nationals to reside and work in the territory of a Member State and on a
common set of rights for third-country workers legally residing in a Member State, OJ L 343, 23 December 2011, available
at https://eur-lex.europa.eu/legal-content/EN/ALL/?uri=CELEX:32011L0098.
30
EMN and European Commission, ‘Ad-hoc query regarding transposition of the Directive 2011/98/EC on a single
application procedure for a single permit’, compilation produced on 22 July 2013, available at https://ec.europa.eu/home-
affairs/sites/homeaffairs/files/what-we-do/networks/european_migration_network/reports/docs/ad-hoc-queries/eu-
acquis/482__emn_ahq_on_transposition_of_directive_2011_98_ec_requested_9_june_2013_wider_dissemination.pdf; and
Tsargand, M., 2013, ‘Human rights of migrants in Latvia, are they fully implemented?’, available at
http://www.integration.lv/en/mira-tsargand-human-rights-of-migrants-in-latvia-are-they-fully-implemented-27122013.
31
Article 9(5), points 13-15, 24 and 26, of the Immigration Law.
32
Information obtained from the OCMA; 16 July 2018.

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Other matters

Link to citizenship
There is no interaction between the Latvian investors’ residence scheme and citizenship.
Citizenship can be obtained through the general naturalisation procedure under which foreign
investors must first obtain a permanent residence permit (after five uninterrupted years of residence)
and then hold the permanent residence permit for another five years (i.e. a total of ten years of
uninterrupted, legal residence in Latvia). In addition, foreigners must also: be fluent in the Latvian
language; know of the basic principles of the Constitution (Satversme); know the text of the National
Anthem, and the basics of Latvia’s history and culture; prove that they have a legal source of income;
sign a pledge of loyalty to the laws and nation of Latvia; and provide proof that they renounced their
former citizenship; this does not apply to citizens of NATO Member States, Australia, Brazil, New
Zealand and other countries with which Latvia has agreements regarding recognition of dual
citizenship.33

Statistics and economic impact

From 1 July 2010 to 30 June 2017 Latvia issued 17 342 temporary resident permits to investors and
their family members. In 2014, when the number of applications reached its peak, 53 per cent of all
the residence permits issued by Latvia were granted under the investors’ residence scheme. 34

Year Total no. of all No. of requests for No. of successful No. of turned down
issued residence by investors applications applications
residence (family members) investors and family investors and family
permits members members
2012 6365 1 226 (2918) 2890 18
2013 8170 1 922 (4508) 4438 29
2014 10504 2 532 (5944) 5822 54
2015 7210 398 (1209) 1101 30
2016 6581 262 (763) 692 13
2017 7191 64 (225) 161 0

After 2014 there was a sharp decrease in requests for residence permits from foreign investors. This is
because the Immigration Law was amended that year by making the rules of the residence scheme
stricter (that is, by increasing the minimum investment levels and introducing other charges). The
programme as well as the Immigration Law were reviewed following the annexation of Crimea by
Russia in March 2014. Higher ceilings for investments were set for obtaining a long-term residence
permit. The threshold for the real estate property was increased from EUR 70 000.00 to EUR 250
000.00. Changes in the programme and the law proved to be successful for decreasing the number of
applicants.

The OCMA reports on the economic impact and financial revenues related to the residence scheme
for investors. From 1 July 2010 to 30 June 2017 non-resident investments from persons granted
temporary residence permits have provided EUR 1.434 billion contribution to Latvia’s economy.
Based on the statistics provided by OCMA,35 this number reflects direct contribution. No explanation
as to how the assessment and calculation was made, is available. The companies in whose equity
capital investment was made or in which an investor occupied an official position paid EUR 176.8
million in taxes in 2016 (the total corporate income tax revenue in 2016 was EUR 424.2 million). 36

33
Article 12 of the Law on Citizenship (Pilsonības likums), OP: "Latvijas Vēstnesis", 93 (224), 11.08.1994, available at:
https://likumi.lv/doc.php?id=57512.
34
Data on the total number of issued temporary residence permits is available on the website of the OCMA:
http://www.pmlp.gov.lv/lv/assets/documents/vizuāļi/VISI__ES__01.01.17.pdf.
35
The OCMA 2017 Report on progress and results of implementing Article 23(1), points 3, 28, 29, 30 un 31 of the
Immigration Law, available at: http://tap.mk.gov.lv/lv/mk/tap/?pid=40441522.
36
OECD Statistics on Latvia, available at: https://stats.oecd.org/Index.aspx?DataSetCode=REVLVA.

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Due to 2014 amendments in the Immigration Law, and the stabilisation of the economic environment,
there has been a sharp decrease in investment attracted through the scheme. The average investors
in 2008 and 2009 were middle-class Russian men whose profession did not require presence in an
office, such as IT. Given the relatively low threshold of investment, this scheme was affordable for
such investors. Considering the fact that that the investment thresholds were raised and as a
consequence – the applications for the scheme decreased, it can be assumed that the scheme will cease
to exist if no further changes are made. Investments in Latvia grow without investors taking part in
the Latvian investors’ residence scheme. 37

The Latvian investors’ residence scheme contributed to the growth and recovery of the Latvian
economy in the aftermath of the 2008 financial crisis. Yet, it mainly activated the real estate market
and attracted less investment in equity capital of capital companies, 38 which would have contributed
more to the competitiveness of Latvian companies and the creation of jobs. Thus, the Latvian
investors’ scheme has been a partial success.

37
OCMA website, available at https://www.lsm.lv/raksts/zinas/latvija/migracijas-dienests-pieprasijums-pec-investoru-
uzturesanas-atlaujam-praktiski-beidzies.a254822/.
38
OCCPR: https://www.occrp.org/en/goldforvisas/latvias-once-golden-visas-lose-their-shine-but-why

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