RIGA - Saeima’s Defense, Internal Affairs and Corruption Prevention Committee on Aug. 4 decided not to forward the All for Latvia!-For Fatherland and Freedom/LNNK (VL-TB/LNNK) suggested amendments to the Immigration Law, which envisage that special temporary residence permits to foreign investors will not be granted anymore, reports news agency LETA.
The committee’s chairman, Ainars Latkovskis (Unity), said that the committee voted on the amendments twice, and both times five deputies voted ‘for,’ and five ‘against.’ Therefore, the amendments will not be forwarded.
The committee members from Harmony Center, Union of Greens and Farmers, and For a Good Latvia did not support the amendments.
Latkovskis voted for them, since he believes that the residence permits to foreign investors cripple the real estate market in Latvia.
Currently the Immigration Law envisages the issue of temporary residence permits to foreign investors outside the European Union, who purchase at least 50,000 lats’ (71,400 euros) worth of real estate or deposit 25,000 lats in a company’s share capital, or 200,000 lats in a credit institution’s subordinated capital.
Real estate company Newsec Latvia CEO Olga Kozina said in an interview last week that the amendments to the Immigration Law, which were promoted by MP Ainars Slesers (Latvia’s First Party/Latvia’s Way), and which have been in force for nearly a year, have not fostered investments in commercial property, because foreigners mostly use the opportunity to receive Latvia’s residence permit by purchasing apartments and private homes.
The amendments have mostly fostered sales of exclusive apartments. Some private homes were sold in the Riga region, but not in Jurmala, because the investment required to apply for the residence permit is not high enough to encourage sales of Jurmala’s luxurious private homes, said Kozina.
According to the Office of Citizenship and Migration Affairs, as of April, 25 million lats was invested in Latvia’s real estate with the purpose of receiving Latvia’s residence permit.
The amendments have caused “significant activity on the real estate market and in the construction business in Jurmala,” said Jurmala City Council Chairman Gatis Truksnis (Latvia’s First Party/Latvia’s Way) during a press conference on July 29. It was the right decision to adopt these amendments, as indicated by the data on the first half-year, emphasized Truksnis.
He said that the number of foreigners inquiring about buying land plots in the first half of 2011 has tripled, compared to the results for the entire last year. The number of construction permits issued in the first six months has increased 1.5 times.
Several projects that were previously put on hold are being implemented once again. Seventy-five requests for architectural planning were submitted in 2010. In the first half of 2011, their number has increased to 205. Direct investments in construction will breathe life into the city, pointed out Truksnis.
It is not bad that there is an influx of additional money into Latvia; however, these apartments and private homes are bought only for personal use, added Kozina.
The result differs from the initial expectations when the amendments were adopted. Those who invest in commercial property consider their investment as a business and rarely connect them with such things as a residence permit, explained Kozina.