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Monday 20.11.2017 | Name days: Anda, Andīna
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Opinion: residence permit restrictions in Latvia will create countless «ghost houses»

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUThe restriction on the issue of residence permits to Russian citizens will create far more problems for Latvia’s economy, construction sector and will only serve to increase emigration from the country, believes CEO of AB Build Andris Bojārs.

«70% of residence permits in exchange for purchases of real estate properties are issued to Russian citizens. His is why amendments to the Immigration Law would mean the end for this programme. Many companies will go bankrupt, unemployment in the country will go up and the country will be consumed by a tidal wave of insolvency processes. If amendments come into force, I will be forced to fire 200 to 300 employees,» – said the company’s CEO.

«For example, there are 80 new projects under construction in Jurmala. If amendments are implemented, the majority of potential buyers for these properties will be lost, new projects will not be finished and Jurmala will have countless ghost houses. Moreover – the majority of these projects are financed using bank loans. If the project is not finished and sold, there will be problems with paying back debts to the bank, there will be countless bankruptcies, insolvency processes and increases in the industry’s unemployment rates,» – says Bojārs.

He adds that Latvia’s employed programme for the attraction of foreign investments has been a powerful support instrument for all industries with ties to real estate properties and the country’s economy as a whole. «By denying Russian citizens the right to buy properties in Latvia, the state economy will suffer a serious crisis. Since the beginning of September, when the previous amendments to the Immigration Law came into force, authorities issued a total of 29 residence permits have been issued in exchange for real estate purchases. Their owners have bought properties in Latvia worth at least EUR 250,000 and have transferred at least EUR 363,000 to the State Treasury. It is also worth mentioning the volume of taxes real estate property developers pay to Latvia,» – adds the businessman.

Bojārs adds that he does not see any justifications behind the government’s reasoning that this programme should be stopped. «What makes me laugh is that the main argument in favour of closing this investment attraction programme is that the government is concerned about the country’s safety. I understand that such concerns seem justified in the context of the Russian-Ukrainian conflict. However, it is also worth keeping in mind that the majority of Russian citizens who buy real estate properties in Latvia and wish to acquire residence permits in Latvia run away from the ruling regime in Russia and oppose it. I do not support Russia’s political position, but I believe the draft regarding amendments to the Immigration Law was rushed and will likely cause more harm than good to Latvia,» – said the businessman.

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