Poland

Poland Map

PROPERTIES & RESIDENCE

Pros of obtaining a property in Poland
Purchasing a Polish property is definitely a solid investment. Their economy has been doing exceptionally well. It has grown by over 3% each year in the last 8 years. Unemployment is at a very low level of 3.5%. National debt is relatively low compared to other EU countries. GDP per capita is about USD 16,000 per year and it's on a dynamic rise. It is still one of the fastest growing economies in Europe. A lot of corporations have moved their back offices into Poland.
Poland prides itself on a highly educated society. Most Polish people are very literate and speak foreign languages.

There are hundreds of flights in and out of Polish cities, including low cost airlines which fly to all cities in Poland several times a day.
Major cities are not the only good opportunities- investing in real estate on lakesides, in the mountains or on the coast also makes a lot of sense.
Prices of properties are quite low but the market has been robust and is going up steadily. Prices range from EUR 2,000-5,000 in major cities.
Rental yield is very good- 5-6% annually. Please note that Lee & Bronski will suggest investment apartments with much higher yield.

Low transaction costs: commission to real estate agents, 2% Civil Transaction Tax; notary fees around 1.5-2% (the more expensive the property the lower the fee); 23% VAT for new properties- like buying from a developer.

Residence permits based on real estate ownership
Residence cards are issued to people starting up businesses. The entrepreneur has to demonstrate that they can make an annual income of at least EUR 15,000 to be eligible for the residence permit. Business can be related to property investment, management etc. Thousands of foreign companies have already entered this line of business.

Residence permits based on new company formation
Residence cards are issued to people starting up businesses. The entrepreneur has to demonstrate that they can make an annual income of at least EUR 15,000 to be eligible for the residence permit. Business can be related to property investment, management etc. Thousands of foreign companies have already entered this line of business.

Taxes & Rental income tax
Property income tax – starting at 8.5%.
Capital Gains Tax - 19% and if you keep the property for 5 years you are exempt from paying it.
VAT - 23%, Corporate Tax - 20%, Income Tax - 19 or 32%. Social security tax varies and is around 35% though there are exemptions.

Other residence types in Poland
There are various residence types- An education OR a spouse visa are only some examples and Lee & Bronski will find a solution tailored to your needs. There is a variety of reasons to reside in Poland and Lee & Bronski may assist you in each case.

Which residence permits offer a path to permanent residency and citizenship?
A passport can be APPLIED for after 5 years of permanent residence; renting or owning an apartment as well as earning an income are required. A language test in Polish will have to be passed.
A Polish passport allows visa-free travels to the entire EU, the USA and Canada.

Restrictions
Foreigners are charged a worldwide income tax if they stay in Poland for more than 183 days a year. Becoming a fiscal resident may not be the best way to take, unless you come from another EU State.
Every entrepreneur is obliged to pay for their own and their employees’ social insurance. The insurance guarantees free health services for the insured person, their spouse and children.

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The country's strong position on the map of business-friendly places is reflected in actual business transactions and investments. In 2019, Poland was also ranked highest in the CEE region and third in Europe in terms of greenfield investment value - USD 21.8 billion. It is no coincidence that at the end of 2020 Poland is the third preferred location in Europe for foreign investments, and despite the pandemic, we have nearly 200 foreign investments in this year's portfolio with a total record value of EUR 10 billion!

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GROWTH & BUSINESS ADVANTAGES

In 2020, Poland’s GDP contracted by “only” 3.5%, significantly less than the OECD average of 5.5%. In the UK, this figure stood at a staggering 9.9%. While unemployment rates have soared across Europe, the official Polish figures have hardly budged, and are the lowest in the EU according to the latest Eurostat figures.

We should keep in mind that the Polish economy was also performing very well before the pandemic. It had been forecast to grow by 3.1% in 2020, according to the IMF’s World Economic Outlook from October 2019. However, the Polish economy’s drop to 6.6 percentage points below the expected growth figure is still a milder slowdown than in many other countries. For instance, in the case of the Czech Republic it was 8.1 p.p. (from +2.6% to -5.5%), Hungary 8.3 p.p. (from +3.3% to -5%), the UK 11.4 p.p. (from +1.4% to -10%), and Spain almost 13 p.p. (from +1.8% to -11%). As much as 83% CEOs in the world and 98% of CEOs from Poland positively assess the prospects for the development of their activities in the next 12 months. At the same time, 65% CEOs of global companies perceive technological breakthroughs as an opportunity for development, not a threat to their business, while for Poland this percentage is as high as 96% - results from the latest research conducted by the consulting company KPMG among nearly 1,300 CEOs worldwide, and a similar study conducted among CEOs in Poland.

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REAL ESTATE TRENDS

Real estate prices have been rising for months. Secondary market prices are rising literally everywhere and for any type of property. However, the largest increases are in the area of plots and detached houses. Prices of apartments increased the most in Gdynia (8.3%), Gorzów (7.6%) and Sopot (6.1%). In Poznań, the prices of flats increased by 4.1% on average, while in Warsaw - by 3.8%. "Own house at any cost" is the right way to explain instant swipe of detached compounds off the market.

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STATS & MORE

Area
315000
Capital
Warsaw
Immigration

.

Czechia

Czechia Map

PROPERTIES & RESIDENCE

Pros for obtaining a property in the Czech Republic

Acquiring residence permits in relatively easy in the Czech Republic and it can lead to citizenship in 5 years. There has been a solid GDB growth. GDP per capita is 22,843 EUR. Low interestest rate, low inflation, high growth rates; uneployment rates at very low levels.

Properties in Prague are considered to be heavily overvalued but still constitue an interesting investment direction. Czechia is a property market in a developed economy. Yields are not that high - 3% maybe 4% yield is possible.

Czechia is considered to be a country with good work ethics and many opportunities and Prague is within a strategic location in Europe. Berlin, Vienna and Wroclaw are still within 350 km. Population is growing and the increase is expected, as opposed to other countries.

There are low buy-sell costs when it comes to property purchase. The 4% real estate transfer tax has been abolished.

The real estate prices away from the city center can be found for 3,500 - 4,500 EUR. Every apartment in the city center or the business center is already way above these prices.

Residence permits on the grounds of owning real estate

There are no restrictions on foreign buyers in the real estate markets. You can set up a company dealing with real estate or any other line of business. Once you are there you can simply increase your assets by purchasing a real estate.

Residence permits on the grounds of company formation

Setting up a business is the quickest option. You have to prove that you have around 15,000 EUR on the bank account and you can support yourself and you have to participate in the national healthcare scheme. Proof of a place to stay is necessary; then you get get a residence permit for yourself and your dependants. It is a quick process - takes 3-6 months.

Taxes & Rental income tax

Rental Income Tax is low; it is 15% to 23% and there is a stardard deduction of 30% for expenses, including CGT. Capital Gains Tax is added to gross income in the year. If you keep the property for 10 years after purchase you do not pay CGT. 15% is the general income tax; there is no wealth tax.

Other residence types in Czechia

There is a multitude of other residence types in Czechia; however as an investor you may be interested primarily in the company formation model which is mostly straight-forward and fastest.

Which residence permits offer a path to permanent residency and citizenship?

There is a variety of residence permit types leading to acquiring the passport. It guarantees access to the Schengen Zone, US and Canada.

Restrictions & Challenges

High prices - are a disadvantage. It is a mature market and tourism is not expencted to grow in the future. There has been a development shortage and there aren't that many construction sites.

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The Czech Republic is certainly one of the most developed countries in Central and Eastern Europe. Its success is also seen in what foreign investment is concerned. Numerous businesses operating in the Czech Republic are incorporated with foreign capital. Some of the sectors in which investment is flourishing are real estate, strategic services, manufacturing, tourism etc. The country provides a set of advantages which are attractive for foreign investments.

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GROWTH & BUSINESS ADVANTAGES

Like all world economies, the Czech economy suffered as a result of the COVID-19 pandemic. Growth that had been sustained through to 2020, suffered a loss of fundamentals in domestic demand, tax revenues, and exports.

“A decline in all three meant that the Czech economy contracted by a projected 5.6% in 2020 (6.6% according to the Czech government), but this was a slower decline than the EU average (7.4% according to EU forecasts).”

A positive GDP is expected in 2021, and 2022, but growth is not expected to be back to pre-COVID levels until 2023.

One of the most affected sectors of the economy was automotive industry exports, which is the largest sector of exports in the country. The high level of integration of the global supply chain in the Czech economy meant that the automotive sector was especially sensitive to disruption. Additionally, the automotive industry was already experiencing stress, as domestic production of cars had been in decline before COVID. Producers, principally Skoda had been looking for lower labor costs in other parts of the “new” European states throughout the last decade. Nevertheless, industry accounts for 32% of GDP and 37% of the labor force, with the automobile industry the largest part of that sector. Skoda, of course, is still king of the hill with its main plant in Mladá Boleslav, accounting for around 10% of all exports, and is a source of national pride. In recent years even Toyota and PSA (Peugeot Citroën) have started to produce cars in the Czech Republic. Czech cars (trucks, buses, tractors, motorcycles etc.) are the backbone of exports, and together the sector accounts for 80% of all exports.

Services contribute to 56.2% of the GDP and employ nearly 60% of the active population. The tourism sector maintains its pace of sustained growth, with the number of guests accommodated in collective accommodation establishments reaching almost 22.0 million in 2019 (+3.5% year-on-year)

Tourism is the number one employer in the Czech Republic. Prague, obviously a beautiful city, with a great historical center, is one of the premier tourist attractions in Europe. There have been significant efforts to spread the tourist wealth out past Prague and into the countryside, as there is an internal argument that all tourist development is targeted to Prague. However, for all practical purposes, this effort has been met with limited success. The tourist money is still essentially in Prague.

Investors who place their investments in the Czech Republic can obtain aid in the form of investment incentives. Czech and foreign legal entities and natural persons engaged in business can apply for investment incentives. Only a legal entity with its registered office in the Czech Republic can be a recipient of investment incentives.
Supported Areas
-- Manufacturing industry
introduction or expansion of production in sectors of the manufacturing industry
-- Technology centres
construction or expansion of R&D centres
-- Business support services centres
start or expansion of the activities of
- shared-services centres
- software-development centres
- high-tech repair centres
- data centres
- customer-support centres (call centres)

You or your company can extend your reach into a higher level. Here are the some opportunities :
• Greenfield, Brownfield and Real Estate Investments
• Joint Ventures, Long-Term Coperations and Suppliers
• Mergers & Acquisitions
• Investment Opportunities in Specific Sectors
- Aerospace;
- Nanotechnology & Materials;
- Automotive;
- Cleantech and Energy;
- EE/Electronics;
- Business Support Services;
- Engineering Technology & Machinery;
- Software & ICT
- Life Sciences

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REAL ESTATE TRENDS

The Czech Republic has for many years been the most expensive residential market in Central Europe.
According to Deloitte data, in 2018 an average new apartment on the local market cost EUR 2,525 per 1 sq m, and in Prague the primary market prices have reached as much as EUR 3,200 per sq m. For comparison, in Poland and Hungary it was: EUR 1,370 / sq m. and EUR 1,323 / sq m. In 2018 and 2019, the transaction prices of flats increased by an average of 9.8% and 8.9%. Consequently aApartments in East Germany became attractive to Czechs.
Over the past 5 years, Czech apartments have already increased in price by more than 40 percent. In terms of the prices of new space, the Czech Republic has caught up with neighboring Austria.
It is hardly surprising that Czechs living in the northwest of the country are looking with interest at the German housing market. For example, in Chemnitz (approx. 250,000 inhabitants), the average price of a second-hand apartment fluctuates around EUR 1,000 / sq m.

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STATS & MORE

Area
79000
Capital
Prague
Immigration

via Company formation

Greece

Greece Map

PROPERTIES & RESIDENCE

Pros of purchasing estate in Greece
Greece offers a 5 years residence permit in return for a minimum of 250,000 EUR investment in real estate, though with all taxes and fees 300,000 EUR is needed to complete the transaction (6% government costs and legal documentation, lawyer is 3-4%). It takes only 6 weeks to process the residence permit for yourself and your dependents up to 21 years of age. You do not have to live in Greece to renew your 5 year residence permit.

The property can be exchanged into another real estate within the 5 year period.

No limitation on the number of properties. You need to live there if you want to become a resident - poor track record of naturalizing people.

Restrictions & Challenges

Property taxes are relatively high. Medical isturance of 300 EUR must be paid during the time of the residence permit.

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Ms. Shuping Li, General Manager of Bank of China (Luxembourg) S.A. Athens Branch, highlights the bank’s role as a bridge that facilitates mutually beneficial cross-border business and investments between Greece and China. She reflects on key investment opportunities in Greece in sectors like energy, infrastructure, tourism, and agriculture.

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GROWTH & BUSINESS ADVANTAGES

Greece's economy is projected to grow by 4.5% next year after a strong rebound this year on stronger tourism, pent-up demand and a boost from state support measures, the government's draft 2022 budget projected on Monday.

The government recently revised upwards this year's projected economic growth rate to 6.1% from 5.9%.

"The economy has already recovered more than two-thirds of the lost gross domestic product in one year, even though economic activity still faced restrictive measures in the first half," Finance Minister Christos Staikouras said.

On Friday Fitch Ratings said Greece's stronger-than-expected economic performance in the first half led it to upwardly revise its full-year 2021 GDP growth forecast to 6.0%.

Greece's economy roared back in the second quarter after a pandemic-induced 8.2% slump last year, growing at a better-than-expected annual rate of 16.2% as consumer spending and investments picked up.

"It seems that regaining the pre-pandemic GDP will take place sooner than expected, in the first half of 2022," said National Bank's chief economist Nikos Magginas.

EY’s survey for Greece, based on a sample of 253 companies worldwide, confirms the improvement of the country's perceived attractiveness. It is worth noting that the improvement comes, for the first time, to a large extent, from companies that have not yet invested in the country and, to a lesser extent, from those already established in Greece.

62% of the sample’s executives, compared to 38% last year, stated that their perception of Greece as a location where their business might establish or develop activities, has improved over the past year, while not a single company surveyed reports that its perception has deteriorated significantly. At the same time, optimism for the coming years is intensifying, with three out of four respondents (75%), compared to 69% last year, expecting the country's attractiveness to further improve over the next three years.

The share of those who believe that Greece is currently implementing an attractiveness policy that attracts global investors has increased, for the second consecutive year, to 71%, from 62% in 2020 and 50% in 2019, indicating that investors attribute the improvement of the country’s attractiveness to the pursuit of specific policies and not simply to the end of a protracted period of economic and political uncertainty, as was likely the case in 2019.

On the fiscal front, next year's draft budget projects the primary budget balance, which excludes debt servicing outlays, will see a deficit of 0.9% of economic output, down from an expected 7.7% of GDP gap this year.

Greece's public debt is projected to drop to 190.4% of GDP in 2022 from an expected 197.9% this year.

Unemployment is seen falling to 14.3% next year from 16.0% this year, the draft budget projected.

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REAL ESTATE TRENDS

"Buying real estate in Greece makes sense only for your own residential purposes" - summed up the experts, stating that in modern conditions investing in Greek real estate is not a good idea. "The most important obstacles to the recovery of the Greek real estate market are the steady increase in the tax burden on real estate, high transaction costs, and continued tax instability," said Ekaterina Tein, Greek real estate specialist. The expert is confident that real estate prices in Greece will continue to fall by at least 3-5% annually. According to her, housing in holiday regions has become so affordable that it is in great demand among the Russian client. “It would seem that the real estate market is worse than ever for the Greeks and the Greek economy. The regrettable results of recent years clearly show that, from an investment perspective, the real estate market in Greece is absolutely unattractive and will remain so for at least another 2-3 years, ”said Igor Indriksons, another real estate specialist in Greece.

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STATS & MORE

Area
132000
Capital
Athens
Immigration

Estate purchase worth €250,000

Hungary

Hungary Map

PROPERTIES & RESIDENCE

Pros for obtaining a property in Hungary
Hungary has strategic location in the heart of Europe and it's climate can be called south-central (great weather from March to mid-October). Wizzair - the Hungarian airline - offers connections to hundreds of destinations across Europe every day; including over 30 flights to London daily. Real estate prices are fairly moderate 1.5-3k EUR/m2 and the growth yield is around a reasonable 6%. Tourism over the 25 years - increased from 3 to 9 million visitors per year. The economy is stable; national debt is dropping while the growth is around 5% annually. Unemployment rate is very low - 4.5%. Budapest is a great expat center - EU citizens, Russia, China, and other countries. Hungarian passport offers visa free travel to all Schengen countries, US, New Zealand, UK and Australia and Canada. Healthcare and educations systems are quite good.

Residence permits on the grounds of owning real estate
Personal investment in property: at least 250,000 EUR investment is required. Incorporating a company can keep the costs lower, but it is not a solution for a single property ownership.

Residence permits on the grounds of company formation
Setting up a company to own the property and generating revenues on leased properties is possible; the minimum investment threshold is 180,000 EUR. The company can be involved in other areas of business as well apart from property management. Rental income tax: you can choose 10% of the gross income or 15% of the net income; you can deduct the costs for the tax office.

Other residence types in Hungary
Foreign investment program for overseas entrepreneurs - though business formation: 50,000 EUR is required but you cannot become an EU national before applying on this type of visa. The business owners become the controllers and as hired employees pay taxes. There is no way for obtaining residency based ion the investment scheme of government bonds residency program - suspended in 2017.

Which residence permits offer a path to permanent residency and citizenship?
All the previously mentioned programs open the path to permanent citizenship after 8 years of temporary residency.

Restrictions & Challenges
Buy-sell cost is around 10%. Taxes at purchasing the property are: stamp duty - 4%, VAT 20%, legal costs - 1%. Non-EU citizens need to pay additional 200 EUR is the cost of a permission fee. Capital Gains Tax - 15% which can be decreased; the longer you keep the property the lower the tax; there is no CGT after 5 years of owning the property. After 8 years of holding temporary residence the applicants can go for Citizenship, together with their dependents such as the Spouse and children aged 18 and less. Passing a language test in required.

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Smart. Ambitious. Competitive. Three words are to describe why you can consider Hungary as an ideal location for your growing business. Hungary is a bustling business hub situated right at the very heart of Europe; physically and in historical, geographical, cultural and economic terms, all destinations are within easy reach. As a full European Union member, companies coming to do business here join the EU market of more than 500 million people. Now, it’s your turn to explore the opportunities that Hungary can offer your business.

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GROWTH & BUSINESS ADVANTAGES

Hungary is a modest performer among emerging economies and its high dependence on exports, in particular on automotive shipments, causes above-average cyclical fluctuations in growth. Real GDP expanded by an average of just +2.2% over the past 20 years though the performance was better over the last five years prior to the Covid-19 pandemic (+4.1% on average, on par with the average of the Central and Eastern European EU member states and above the whole Emerging Europe average). As a consequence of the dependence on exports (accounting for around 90% of GDP), Hungary's economy was hit harder than others by the global Covid-19 crisis (-5.0% in 2020), despite strong economic policy support. Going forward, we expect a strong, broad-based recovery with annual growth of more than +7% in 2021 and around +4.5% in 2022. Consumer spending, fixed investment and net exports will be key drivers of the rebound.

Why invest in the Hungarian property market?

In general the property sector’s prime submarkets saw growth in rent levels thus decreasing vacancy ratios leading to increased investor appetite and transaction volumes. By investing in property, the highest returns can still be achieved in the CEE region. There is an increasing volume of investors eyeing the market and amongst the hotels the upscale/luxury sector is very much favoured. Improving the image and increasing the popularity of Budapest as a city-break destination. There are a number of seasoned destinations in provincial Hungary that could support the advent of new hotels and resorts. Tourism volume and hotel performance have shown a continuously increasing tendency since 2009 both in respect to Budapest and the countryside converging into solidly performing hotels year in year out. High investment appetite experienced for quality income generating products meets limited supply. Hungary is regarded as the fifth strongest health and medical destination in the world due to its excellent geographical location, outstanding quality of thermal waters and abundant geothermal resources. The country is a politically and economically safe destination. real INDUSTRIAL OVERVIEW

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REAL ESTATE TRENDS

Real estate prices in Hungary have doubled in the last decade. In the European Union, only two other countries recorded greater price increases - Estonia and Luxembourg - according to Eurostat data. - Apartments in Budapest are getting more expensive - admits Gabor Borbely, director at CBRE. In his opinion, the reason for this is the fact that in Hungary flats and lots are still cheaper than in other European Union countries. If you compare them with what you have to pay for a similar flat or house in Warsaw or even in Prague, i.e. in cities where people have comparably the same amount of money and the geographic location is also comparable, Budapest is still 40-50 percent cheaper. Market prices start from 2.5k USD per square meter to 3.5k in the case of completely new apartments. There are also much more expensive offers for houses and apartments in the hills surrounding Budapest, near the castle, or in the very center with a view of the Danube, where sq. m prices start from 6.5k USD.

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STATS & MORE

Area
93000
Capital
Budapest
Immigration

Real estate purchase worth 

Slovakia

Slovakia Map

PROPERTIES & RESIDENCE

Pros for obtaining a property in Slovakia
There is steady population growth in Slovakia which is a very good indicator for the possible real estate pricing trends. GDP growth has been healthy in recent years, even throughout the pandemics and per capita it is now over 19,000 USD a year. Unemployment rate has gone from 14% in 2013 to 5% in 2019. Inflation is low and the national debt is under full control. Member of the EU, NATO located in central Europe and only 79 km from Vienna. Tourist numbers more than doubled between 2009 and 2019 - tourism has a big growth potential.

Residence permits on the grounds of owning real estate
The only restrictions on foreigners buying properties are agricultural land and forests. Other than that there are no restrictions whether you come from the EU or from outside of the EU. The buy-sell costs are very low. There is a 20% VAT on properties which are up to 5 years old - meaning new developments. For older properties the buy-sell costs are very low. It would be a 2% legal registration fee and the real estate agent - really low compared to other countries. There are no restrictions on foreign buyers in the real estate markets. Prices, even though still reasonable, have been going up by about 15%. Long term rental yield are not very high but very stable; 4-4.5% growth.

Residence permits on the grounds of company formation
An investment of 150,000 EUR into your own or existing company will grant you the residency in Slovakia.

Taxes & Rental income tax
Slovakia does not have any welfare tax; there is no inheritance tax, no local taxes, no property tax. Rental income tax is calculated based on income: from 0-35,000 EUR you pay 19% income tax and above that you would pay 25% income tax. There are various possibilities of deductions such as repairs, charges, utilities, etc. Corporate tax is at the level of 21%, personal income tax is 25% (or 19%), social security tax is at almost 50% (companies pay 35.20% and the employee pays 13.40%). Dual nationality is allowed in most cases of Lee & Bronski's clients who have been born overseas. Yet if the Slovakian citizenship holds another citizenship, then it's the Slovakian citizenship which is the dominant. CGT is 19% - 25%. If you do not use your property for business purposes you will not pat the CGT.

Other residence types in Slovakia
Adoption, naturalization and others, such as student, employment, etc.

Which residence permits offer a path to permanent residency and citizenship?There is a variety of residence permit types leading to acquiring the passport. It guarantees access to the Schengen Zone and Canada; there is a visa free access to 189 countries. Obtaining a passport requires 8 years of permanent residence in Slovakia prior to application (no criminal record or outstanding European arrest warrants or is no subject to deportation). The person applying has to demonstrate knowledge of the Slovakian language and the country. There are grants of citizenship (before the 5 or 8 year requirements) which may be given to individuals, such as getting married to Slovak people. Alternatively, individuals who have "significantly benefited to Slovakia based on economical, technological, scientific, cultural, social or sport matters may be granted citizenship omitting the regular procedures. The government will determine the talent residence on their sole discretion.

Restrictions & Challenges
Yields are not spectacular and home-ownership is covered; it may take a while to find tenants to your apartments. The social security tax is almost 50%. Not knowing the language can knock you off from getting the passport. It takes 5 years of residency and 8 years of permanent residency that you can actually apply for the passport.

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LOCATION: Key location in the heart of Europe with great export potential
STABILITY: One of the safest and politically most stable countries in Europe
EUROZONE: A member of the Eurozone since 2009 as one of a few in CEE
QUALIFIED WORKFORCE: Cost–effective, skilled and loyal labour force with excellent multilingual skills
WORLD-CLASS PRODUCTIVITY: The highest labour productivity rate in the region (Eurostat)
INVESTOR-FRIENDLINESS: Continuously improving the competitiveness of the Slovak business environment (World Economic Forum)
INNOVATIVE ECOSYSTEM: The highest share of higher added-value jobs in CEE, ready for new investments into R&D and innovation (OECD)

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GROWTH & BUSINESS ADVANTAGES

Slovakia is a strong performer as compared to both Eurozone and emerging economies. However, a high dependence on exports, in particular on automotive shipments, causes above average cyclical fluctuations in growth. Real GDP expanded by an average +3.5% over the past 20 years (above the average of the Central and Eastern European EU member states and equal to the whole Emerging Europe average). As a consequence of the dependence on exports (amounting to almost 100% of GDP), Slovakia's economy was hit harder by the global Covid-19 crisis than others (-5.2% in 2020), despite sizeable economic policy support. Going forward, we expect a broad-based recovery, with annual growth in the range of +4% to +5% in 2021-2022, driven by a rebound in both domestic and external demand. However, sustained or renewed supply-chain disruptions pose downside risks to these forecasts. What are the strongest pillars of Slovakia's industry? Which ones provide the best opportunities for potential investors? Slovakia promotes itself as the largest car producer per capita in the world (202 in 2018) with three carmakers located in western Slovakia (Bratislava, Trnava, and close to Žilina). While the fourth carmaker, the British Jaguar Land Rover, opened its plant near Nitra in 2018, it sees an even bigger space for the development of the network of carmakers’ subcontractors, especially in the east of the country. The second strongest pillar of Slovakia’s industry is the electrotechnical industry with companies in Galanta, Nitra, and Nové Mesto nad Váhom, to mention a few. Other sectors with a tradition in Slovakia are the chemical industry and forestry. IT is a promising sector in Slovakia, where apart from Bratislava, Košice and Žilina also house strong IT clusters. Slovakia has become home to several business service centres too, most of which are currently located in Bratislava with opportunities to spread into other parts of Slovakia. The trend of transitioning the economy towards services is visible by the mushrooming of startups and R&D centres, many of which can utilise EU funds or the state’s investment incentives.

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REAL ESTATE TRENDS

The average price of dwellings in the first quarter of 2021 increased by 54 EUR/m2 to the price of 2179 EUR/m2. On a quarter-on-quarter comparison, it is about growth of 2.5%. The annual growth rate fell to the point of 8.6%. According to the National Bank of Slovakia, during last quarter the price of 4-room and 1-room apartments grew faster then 2- and 3-room apartments. The average price of houses and villas increased by 102 EUR/m2 to the level of 1471 EUR/m2. Its quarter growth rate grew by 7.4% and annual growth rate reached 16.4%. The overall annual growth rate in residential real estate prices was contributed by a greater extent of apartments prices growth rate, than growth in prices of house. In the first quarter of 2021, the difference in prices between apartments and houses per m2 was 32.5%, which is less than the average difference in prices for whole year of 2020, which was 35.9%. The average price per m2 for apartments and houses together in Slovakia in the last quarter was around 1825 EUR/m2.

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STATS & MORE

Area
49000
Capital
Bratislava
Immigration
  • Real estate purchase worth 250,000 EUR
  • Foreign Direct Investment with 15,000 EUR threshold requirement

Croatia

Croatia Map

PROPERTIES & RESIDENCE

Pros for obtaining a property in Croatia
Croatia is mature property market with a confirmed growth rate and a steady influx of tourists for around 5 months per year. It will become a part of the Eurozone in 2023 and has recently abolished their work permit quotas. The coastline of Croatia is 1,777.3 km long while its 1,246 islands and islets encompass a further 4,058 kilometres. The Adriatic sea is home to dolphins and just a perfect place for diving. As long as the Europeaners want to hang out during the vacation time - a lot of them mainly from Germany, Austria or Poland will always choose Croatia.

Residence permits on the grounds of owning real estate If you own a property in Croatia and get about the residence paperwork done, you can stay in Croatia for a total of 9 months a year. This kind of residence permit does not lead to and will never get you permanent residence or citizenship.

Residence permits on the grounds of company formation
The must-haves to incorporate a company as a non-EU national are: hiring 3 EU citizens or croatians AND yourself full time, and investing 200,000 KUNA (around 30,000 USD) into business as startup capital. The shareholder must actually move to Croatia in the incorporation stage and proof the local address - otherwise the company may not be formed by the court. Additionally paying the state health insurance is necessary, and the relevant taxes must be paid. Company whose main business is renting out the apartment is bound to a state tax of 10% and the locally determined Company Income Tax which varies from place to place (tax paid in Dubrovnik will be different than tax paid in Split). Capital Gains Tax is 25% if you sell your property within 3 years after acquiring it, after the 3 year threshold period it is 0%. Officially there are no residence permits for retirees, but then with a good lawyer this type of residence can also be arranged. Obtaining a permanent residency (after 5 years of holding the qualifying temporary residence types) requires a language test which foreigners do not consider as a particularly hard one.

Other residence types in Croatia
General options: "work", "volunteering", "student programs", "property", "scientific research", "other purposes". Another "new" option is to attain the "digital nomad visa". This may give you a certain amount of tax exemption as long as you prove you work remotely for an overseas company. All these options may require you to present the 12 month property lease contracts, proof of wealth on your bank accounts, criminal records and a general proof of your purpose of stay. All documents will have to be translated and apostilled before submitting to the local police station.

Which residence permits offer a path to permanent residency and citizenship?
There are only two ways that will lead you to citizenship if you are not an EU national; you can be hired by a Croatian company with a proper labor contract or better - you can become the entrepreneur and form a local company. (You can also marry a local prince/princess).

Restrictions & Challenges
The hardship is the citizens from certain countries are restricted to buy properties individually. Setting up a company is necessary to rent the apartment out. Renting out the apartment is bound to state tax of 10% and the locally determined Company Income Tax which varies from place to place (The tax in Dubrovnik will be different than the one in Pula). Capital Gains Tax is 25% if you sell your property within 3 years after acquiring it, after the 3 year threshold period it is 0%. Officially there are no residence permits for retirees, but then with a good lawyer this type of residence can also be arranged. Obtaining a permanent residency (after 5 years of holding the qualifying temporary residence types) requires a language test which foreigners do not consider as a particularly hard one.

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Business-oriented environment, an efficient, innovative, highly qualified and multilingual workforce, cost competitiveness, an exceptionally favourable geostrategic position, attractive incentives as well as professional and free services provided to investors are just some of the reasons to invest in Croatia.

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GROWTH & BUSINESS ADVANTAGES

Tourism accounted for 25.1% of Croatia’s economy in 2019. The vital industry has been shaken over the past two years, and Croatia now looks to 2021 as a possible recovery – but the recovery is mixed and complex. While tourism for the full year is still drastically lower than in 2019, the peak months of the summer season saw tourism almost fully recover. When compared to the timeline of COVID restrictions and ease of travel, it seems that Croatian tourism will not take permanent damage from the pandemic and that 2022 will see similar numbers to 2019. However, the pandemic reduced overall tourism in 2020 by more than 50%, and in places like Dubrovnik, by over 80%. While the summer season showed that tourists were eager to return, Dubrovnik is a prime example of a city looking to change how it embraces tourists. The city has, following the pandemic, placed new emphasis on addressing over-tourism, local habitability, and sustainable tourism measures. The Unexpected Years of Croatian Tourism 2019 was an amazing year for Croatian tourism. As the year ended, the country recorded a record high of tourist visits and tourist spending. According to Statista, the number of realized tourist arrivals to the country in 2019 was 19.6 million, and the total number of tourist nights stayed was an incredible 91.24 million. Yet the COVID-19 pandemic countered this all-time high with the lowest tourist turnout in 20 years. In 2020, there were only 7.0 million realized tourist arrivals and 40.8 million tourist nights (though the bureau of statistics gives the total number at 54.4 million.) This “was 64.2% less arrivals and 55.3% less nights than in 2019.” Since then, 2021 saw the slow reduction of COVID waves, and a rapid vaccine rollout. While travel has become easier, there remain international travel restrictions, COVID passports and safe capacity limits. As of September 2021, only 9.0 million tourist arrivals have occurred. Data from the Croatian eVisitor system suggests that 55.3 million tourist nights had been realized as of August. Just these 8 months of 2021 have already exceeded the tourist nights from 2020 by several million. However, this is still drastically lower than the numbers from 2019. Total tourist arrivals are still under half their former total, while tourist nights are just over half theirs. Croatia is a modern economy, able to quickly adapt to all current challenges, with a focus on the future. Croatia is not only popular due to its natural beauty, world-famous inventors and some of the best athletes of today, it is also popular on account of its ease of doing business, excellent investment incentives, well-prepared institutional infrastructure, competitive workforce and excellent quality of life. Numerous foreign companies have recognized Croatia’s advantages. Some of these companies are globally recognized multinational corporations such as IBM, Microsoft, Oracle, Coca-Cola, Teva, Siemens and Ericsson. In addition to a booming traditional industry, services and trade, new business activities in the fields of digitalization, automation and artificial intelligence have also become very active. Young fast-growing companies in the field of Industry 4.0 have found their home in Croatia where they feel more than welcome. Strong institutional support for sustainable development and new technologies, membership in the European Union, low taxes, secure property rights and progressive regulatory policies make Croatia one of the most desirable destinations for any foreign investor. The Ministry of Economy and Sustainable Development is at your disposal for all questions regarding investing in Croatia. Pursuant to the Companies Act, domestic and foreign companies operate under equal conditions. A foreign investor may establish or participate in establishing a company and may acquire rights and/or obligations under the same conditions as any domestic investor. Foreign investors, with their registered head office or residence in a country that is not a member of the WTO, should satisfy condition of reciprocity. The Constitution of the Republic of Croatia stipulates several guarantees for foreign investors. In particular, it stipulates that all rights acquired by investing capital will not be limited by law or other legal act, and that foreign investors are guaranteed free transfer and repatriation of profits and invested capital. A foreign person who wishes to acquire ownership of real estate in Croatia has the right to do so only if there is a mutual possibility for Croatian persons to do the same in the foreign person’s country. This restriction does not relate to citizens and legal entities from EU Member States. Such persons acquire right of ownership of real estate under preconditions valid for exercising property rights by citizens of the Republic of Croatia and legal entities with their seat in the Republic of Croatia, except on exempted properties, i.e., on agricultural land determined by special law and protected areas according to special law. A foreign investor may establish a company in Croatia which, as a domestic legal entity, may acquire property without restrictions.

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REAL ESTATE TRENDS

It's better not to wait to buy real estate in Croatia. - Croatia is getting ready to adopt the EUR. It joined the ERM2 mode for at least two years. During this time, the Croatian government will not be able to devaluate the Croatian kuna. We expect a significant appreciation against minor currecies Polish zloty and the euro, which in turn will make not only holidays in this popular destination relatively more expensive, but also real estate - says David Katrenčík, marketing manager and real estate broker at Rellox. - For example, Slovakia during the transition to the euro strengthened in 2005-2009 against the euro by more than 20 percent. Therefore, investors should not hesitate to buy relatively cheap real estate in Croatia now - he advises. How much do you need to buy a property on the Adriatic Sea now? - The prices of the real estate offered vary, of course, depending on the location, type, area or services offered. Overall, however, it can be said that the vast majority of properties in our offer are in the range from 2,000 to 5,000 euro/m2, says David Katrenčík.

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STATS & MORE

Area
57000
Capital
Zagreb
Immigration

Company formation - €150,000*

Estonia

Estonia Map

PROPERTIES & RESIDENCE

Pros for obtaining a property in Estonia
Estonians have a visa-free arrival guarantee to 179 countries and territories ranking the passport 11th in the world. It includes visa-free travel to the US, Canada, Australia and New Zealand. It has been a long-time member to the Euro zone. Estonia has a very good business atmosphere and develops rapidly. Its business is strongly bonded and influenced by the Nordic countries.

Residence permits on the grounds of owning real estate
Real estate can become the assets belonging to the company you set up. There are no special residency options relying solely on property acquisition.

Residence permits on the grounds of company formation
The Estonian residency by investment is one of the best programs ever created and very reasonable. Residency is granted to entrepreneurs who invest into existing companies, set up their companies or operate as sole proprietors. The minimum investment amount to be granted residence permit by investment is 65,000 EUR, but if you are self-employed only 16,000 EUR is sufficient. Fixed assets and company's capital can be considered as the actual investment. Your entrepreneurial application will be evaluated based on a carefully prepared business plan.

"A digital nomad visa" - preconditions are working remotely for your own company and proving that you have a steady income from providing services to other companies. The minimum income required is around 3,500 EUR per month (in the 6-month period prior to the application) to be accepted to this scheme. This type of visa can be applied through the embassies. Check out our separate article for the Estonian E-Residency programs.

Taxes & Rental income tax
Estonia taxes worldwide income. Income tax is calculated on a monthly basis and on the basis of distributed profit. CIT is generally a flat 20%. Dividends are taxed 14%.

Which residence permits offer a path to permanent residency and citizenship?
Working, studying, marriage. In general 8 years of residency (including 5 years of permanent residency) on whichever residence permit may open the doors to beginning the naturalization process. There are exceptions to this rule that go around talent residence permits. The passport can be applied for after 8 years of residency.

Restrictions & Challenges
Estonia does not allow dual citizenship and the other nationality has to be terminated upon receiving the Estonian one. Language test must be taken to be approved for citizenship.

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Estonia consistently ranks as a world leader in human capital, digital capability, and ease of doing business. This creates a competitive environment which allows solutions and services to be researched, developed and delivered globally. From multinational companies to high growth startups, Estonia has a two-decade track record of successful investments and innovations.

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GROWTH & BUSINESS ADVANTAGES

Estonia is a Northern European hub for Industrial, Supply Chain and GBS activity and a world leader in IT. As IT becomes the value driver across all industries, Estonia is uniquely positioned as the scalable location of choice for knowledge and digital business.

IT / R&D / software
Estonia is the world’s most digitally enabled nation, offering a unique combination of talent, environment, and innovation. Our IT R&D ecosystem enjoys global proof of concept, being trusted by global organisations such as Kuehne+Nagel and NATO and producing unicorn startups like Wise and Bolt.

Fintech
Estonia is a cashless society with over 99% of financial transactions occurring digitally. Electronic ID and Blockchain are widely used in FinTech applications. 80+ FinTechs ranging from innovative startups such as Wise to Blockchain leader Guardtime make Estonia a global centre of excellence for FinTech.

Cyber security
The most advanced cyber security country in Europe, Estonia has unique expertise in the research, development and management of cyber security solutions and systems. Home to NATO CCDCOE, Guardtime and Malwarebytes, Estonia is trusted to keep the digital economy safe.

Blockchain economy
Estonia developed X-Road, its proprietary decentralised, distributed system in 2001 and has utilised Blockchain since 2008. World-class technical skills supported by practical experience implementing public and permissioned Blockchain’s place Estonia at the forefront of the emerging Blockchain economy.

Swedbank has raised its forecast for Estonia's economic growth this year by 5 percentage points to 8 percent, up from 3 percent in the spring.

An economic growth of 8 percent would represent the highest growth for the past 15 years.

Swedbank said it raised its forecast for this year, as GDP growth in the first quarter of the year was stronger than previously expected.

"This sharp jump in growth provided additional momentum also for the rest of the year. This year's economic growth is going to be broad-based, driven by strong private consumption, investment and exports," Tonu Mertsina, chief economist at Swedbank Estonia, said at the presentation of the economic forecast.

Next year, however, gross domestic product (GDP) growth is expected to slow to 5 percent, according to Swedbank's latest Economic Outlook. In April, the bank expected growth of 4.3 percent in 2022.

The GDP growth forecast for 2023 by Swedbank is 3.2 percent.

The Swedbank Estonia chief economist said that the Estonian economy has quickly emerged from last year's recession. In particular, Estonia's GDP growth in the first quarter was one of the fastest among the countries of the European Union (EU), and the strong recovery of the economy continued in the second quarter.

Overall confidence in the economic sectors meanwhile has risen to its highest level in 14 years. The production volume of the manufacturing industry in June was close to its peak registered two years ago, and the growth in the sales volume of retail companies rose to double digits in the second quarter. Mertsina said that expectations for industrial growth and demand in the services sector are high for the near term.

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REAL ESTATE TRENDS

As the first lockdown ended, many self-proclaimed real estate experts predicted a decline in prices. A year after those events, you can see that prices have not dropped, but have indeed increased. Worse still, in many EU countries housing prices rose faster than salaries. And that is cause for concern. Over the last decade, the price of real estate in Hungary has increased by 90.6 percent, and in Austria by 81.4 percent. However, the European record holders are Luxembourg and Estonia. In these two countries, real estate prices increased by respectively 99.8% and 112.8%! The real estate market has been very active despite the crisis because the interest in buying has been supported by wage rises in most sectors of the economy and by rapid growth in household deposits. Eesti Pank does not currently see any major problems in the real estate market, but looking forward the risks will increase of real estate prices starting to rise fast. Prices may rise rapidly because of a combination of factors, as Covid-19 is being brought under control and the restrictions removed, people feel increasingly confident, borrowing is cheap because of the monetary policy of the central banks, the banks want to lend on good terms, and more than a billion euros will be taken out of the second pension pillar in the autumn.

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STATS & MORE

Area
45000
Capital
Tallin
Immigration

By investment 65,000 EUR
By setting up sole proprietorship - 16,000 EUR

Latvia

Latvia Map

PROPERTIES & RESIDENCE

Pros for obtaining a property in Latvia

  • Visa free travel into 179 countries, including US and Canada.
  • Long standing partner of NATO, the EU, the EUR Zone Schengen since accession.
  • GDP per capita of Latvia is 18,000 USD per year.

Property prices are still below 1,000 EUR, but the new ones in the capital city will cost 2,000-7,000 EUR/m2.

The yields are not great (around 4%), but investing in Riga's Old Town may bring you the yield of 6-7% annual yield.

GDP has sustained stable and Latvian economy is really good' in the years of pandemic it only dropped by 3.5%, which is much better than most of the West-European countries.

Salary increase has been 600 to 860 EUR in the last few years.

National debt is around 50% of GDP.

Tourist numbers are growing steadily.

The process of buying real estate is simple and regulated; and it is very fast.

Residence permits on the grounds of owning real estate
250,000 EUR investment into Latvian properties is necessary to obtain this kind of residence permit. You would not be permitted to buy agricultural land, woods or forests though. Each property you buy would have to be valued at least 80,000 EUR to join the scheme, to which a 5% state tax is added and a 2% state duty. The residence is then granted to the dependants such as spouse, minor children and parents.

The residence permit is granted for 5 years with the annual renewable requirement.

Residence permits on the grounds of company formation
This is not exceptionally necessary and not even advised for taxation reasons once you apply for the residence permit on the grounds of purchasing a property.

Taxes & Rental income tax
Dual citizenship is permitted but the profit derived globally does get taxed. Personal income tax rate is 31%, CIT is 20%, VAT is 20%, social security tax is 35.09% and they charge taxes on the worldwide income.

Purchasing estates is cheap - the buy-sell costs are very affordable. 21% VAT on the new builds; older buildings are 2% stamp duty and 0.5% of the notary; sales party pays 3%.

No inheritance tax, no city tax, no wealth tax. CGT is 20% (up to 20,004 EUR) - 31% (above 64,000 EUR) and fairly good deductions are allowed. Alternatively a 10% flat fee tax is allowed with no deductions.

Property taxes are higher than in Lithuania or Estonia, but lower than in the Western Europe.

Which residence permits offer a path to permanent residency and citizenship?

Various, such as spouse residence permit, employment, etc. You can apply for a passport after 5 years of permanent residence, which makes it at least 10 years of living in Latvia.

Restrictions & Challenges
20% sales rate is applied to the new builds.
The population of Riga and Latvia is actually going down, which is not a good indicator to invest in the real estate market, and is different to the other Baltic states capital - Vilnius or Tallin.

There are a lot of foreign buyers - up to 70% in Riga. There is risk of depression when they liquidate their investments.

Unemployment is quite high.

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Latvian ecosystem is small, yet vibrant, it consists of highly motivated multilingual (often with at least 3 languages or more) talented people of various age and backgrounds. The startup environment is dynamic and rapidly growing. To nurture this growth, all important stakeholders have joined hands together.

Latvian startup infrastructure consists of 400+ registered startups, a pool of institutional investors and business angels, a diverse range of modern co-working spaces, dozens of business incubators fuelled by the government, academia and private individuals, as well as full of exciting gatherings, productive conferences, hackathons and meetups. The capital city Riga hosts numerous annual Tech & Innovation conferences: the iNovuss, Deep Tech Atelier, Riga Tech Girls, TechChill and others. Moreover, a unique Startup Law has been passed and Startup Visa, officially - temporary residence permit, has been created in order to make Latvian startup ecosystem even more vibrant and productive.

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GROWTH & BUSINESS ADVANTAGES

As European Union is starting to get back on track after the pandemic and economic forecast by European Commission is also becoming more optimistic. Latvian indicators in this forecast are not the exception. In this briefing, figures provided by the EC Spring 2021 Economic Forecast are analysed. Also, the financial sector is playing a big role in the recovery of the country after the pandemic, so understanding the trajectory of its development is essential. Considering that the financial sector in Latvia is one of the most developed areas in the country, the issue of faster and more efficient improvement remains even more acute.

The Latvian economy will grow by 3.5% this year (GDP growth) and consumption are going to return to the pre-Covid level, additional stimulus to the economy will be provided by an increase in investment, including due to a significant inflow of European Union (EU) funding.[ii] In 2021 Latvia’s state support for entrepreneurs and households has significantly increased compared to 2020, while the state budget deficit is growing accordingly. The budget deficit reached 4.5% of the GDP in 2020, but this year it is already forecasted at 7.3%. In turn, the EC forecasts that next year the Latvian GDP will grow by 6% and the budget deficit will be reduced to 2%.

Consumer price inflation was lowered in 2020, displaying decreasing energy prices and low service prices, because of the low demand. More expensive energy and service prices over the projection period are set to raise headline inflation to 1,7% in the current year and 2% in 2022.

Latvian government has particular interest and determination in boosting the development of startup environment, therefore, the support is provided at various stages: ideation & conceptualization, initiation, development and expansion. No matter what stage you have reached – there is a support mechanism just for you! And it is implemented and delivered through Magnetic Latvia Startup.

Startup Law
The Law creates a favorable tax regime for startups. The law foresees two benefit scenarios: 1) a special flat tax regime, currently 340,90 euros/month per employee, regardless of salary paid, combined with the 0% individual income tax rate, or 2) 45% co-financing for the highly qualified specialists.

Startup Visa
Startup visa, officially - a temporary residence permit, is offered to all non-EU startup founders who are willing to come and develop their startup ideas in Latvia. One startup can have up to 5 founders with a startup visa. The application process takes one month. The visa is given for the period of maximum 3 years and it is also issued to the spouse and children.

Innovation Vouchers
Innovation voucher program is aimed for any-size businesses that develop new products or technologies. The R&D actions supported by the program are the development of a new product or technology, the strengthening of industrial property rights and the certification and testing of new product or technology. Innovation vouchers are up to 85% co-financed in the amount of 25 000 EUR.

Science Commercialization
The Investment and Development Agency of Latvia provides support to public research organizations for commercialization of research results. Among supported activities are: carrying out a feasibility study, preparation of a commercialization strategy, industrial research, experimental development, participation in international exhibitions, contact exchanges, conferences (seminars) abroad, individual visits and participation in national booths and trade missions, preparation of commercialization offers, attraction of experts and other activities.

Business Incubators
There are 13 LIAA incubators throughout the whole Latvia that support the necessary environment for the set up and development of business by offering training, mentor support and grants, and organizing events on general business issues.

Acceleration Funds
In 2017, the government made a special EUR 15 million acceleration fund (allocated by the European Regional Development Fund during the planning period of EU structural funds 2014-2020) available through ALTUM to support Latvia-based early-stage startups. The fund was then equally divided after a public procurement between three professional funds: Buildit focusing on hardware and the internet of things startups, Commercialization Reactor focusing on deep-tech startups, Overkill Ventures focusing on B2B software startups. There is one more acceleration fund in Latvia - Startup Wise Guys, focusing on B2B Fintech startups.

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REAL ESTATE TRENDS

Properties from the top shelf of the Latvian market have already dropped by 20-30 percent and that is because the Russian clients conclude fewer and fewer transactions. Until recently, Latvia was popular with Russians looking for real estate. A quarter of Latvia's 2 million people are ethnic Russians, and 37 percent of Latvia's population is Russian is the primary language of Latvians. In the eastern border region of Latgale, Russians built cheap holiday homes, but the greatest demand for real estate is in the country's capital, Riga and its coastal satellite, Jurmala, the Financial Times reads. Until last summer, the Russians could obtain the right to purchase real estate in exchange for investments in the amount of 150,000 euro, which was the lowest rate to obtain residency in the entire EU. Latvia was considered a "convenient haven" bearing in mind the complexity of the situation in Russia. The city of Jurmala attracted Russian oligarchs, politicians, entrepreneurs and mafiosi, and their big money was invested in luxury real estate. Now the problem has arisen as to whether Russian demand for luxury real estate will slow down or whether bargain purchases will not appear on the market. - Properties from the top shelf of the Latvian market have already dropped by 20-30 percent. - says for "The Financial Times an agent from a Moscow agency, according to which the demand for real estate has dropped by 90 percent. - There are fewer clients from Russia. Although they view real estate, transactions are very rare."

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STATS & MORE

Area
64000
Capital
Riga
Immigration

By acquiring a property of >250,000 worth

Lithuania

Lithuania Map

PROPERTIES & RESIDENCE

Pros for obtaining a property in Lithuania
There is a number of reasons you should consider putting your money into the Vilnius real estate market. Prices in Vilnius are reasonable at the average rate of 1,700 EUR per square meter. Although new apartments around the Old Town and the city center go for a lot more; 3,000 - 5,000 EUR per sq/m. Outside of the city center prices are much more affordable; 1,700 - 2,200 EUR per m2.

Yield: around 6%. Exceptionally low buy-sell costs, except for new builds, where the hefty 21% VAT is added. The notary and registration fees come down to less than 5%; the seller fees are around 3%.

Excellent GDP growth of Lithuania proven by the fact that even during the pandemics the economy dropped by 0.8%! (In the UK GDP dropped by 9.9% in 2020).

Employment conditions: when it was 17.8% in 2010, it dropped to 6% in 2020.
Salary growth (similar to Latvia): from 5% to 15% annual growth in the last 5 years; rising to 916 EUR per month from 500 EUR per month in the last 6 years. The government debt grew during the pandemic, just as it grew in every single country in the world. But while in the UK it grew by 100% plus during the pandemic, in LT it grew up to 48%.

Fintech industry has benefited a lot from the foreign investments. Also it is a country of Revolut and a lot of other super-successful business startups.

Highly educated population: 125,000(!) students in a country of such a low population.
Additionally tourism in Lithuania is on the rise as well as the population is steady.

Residence permits on the grounds of company formation
Contact Lee & Bronski Support to learn about the latest options, as they do change frequently. You may apply for a residence permit after 6 months of setting up a company. You would need to establish a company with 29,000 EUR share capital and employ 3 Lithuanian citizens or workers with residency permits. To obtain a permanent residency you must live in Lithuania for a period of 5 years of "temporaries".

Taxes & Rental income tax
Capital Gains Tax is 15% and the Rental Income Tax is 15% with deductions of 30% allowed. If you get more than 163,000 EUR in a year for rental income you will pay additional 20%. No gift tax, no inheritance tax and property tax up to 150,000 EUR is 0%. Owning a 150-300k EUR you will pay 0.5% property tax, and then for real estate worth 300k-500k you will pay 1%. You should be charged 2% over a property valued 0.5M EUR.

Other residence types in Lithuania
There is a variety of other residence types you may choose from and they go about the standard - education, marriage, naturalization, etc.

Which residence permits offer a path to permanent residency and citizenship?
The Lithuanian passport will allow you access to 180 countries and territories making it the world's 9th best passport to get. After 10 years of living in Lithuania you may apply for citizenship. You would have to pass a Lithuanian language test. Under certain circumstances Lee & Bronski may help you with obtaining the Lithuanian citizenship on the go, without the previously stated requirements.

Restrictions & Challenges
Rental yields are not amazing, but on the rise.

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Tourism aside, the US companies are increasingly keen to explore other mature but less saturated locations for the GBS & ICT sector. Similarily, the Financial Services and Research sectors currently comprise the largest employee base of the Lithuanian GBS ecosystem. The Information Technology and Services sector continues to be a leader with 41% of all Business Services Centres in Lithuania.

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GROWTH & BUSINESS ADVANTAGES

Lithuania’s economy recovers and accelerates during the pandemic. The economic performance results, released in July, has shown unprecedented growth of the economy in Lithuania. The GDP growth for the second quarter this year has risen by 8,6 per cent, compared with the same period last year. The economists have announced that Lithuania’s economy has not only bounced back but, effectively, returned to the period before the global financial crisis in 2008. Moreover, contrary to the precipitous growth more than a decade ago, the current economic expansion is balanced, driven by moderate public debt, increased production and exports, raising salaries and domestic consumption. The economy has demonstrated resilience to the restrictions for global commerce and trade under the pandemic. The analysts conclude that the economy is on a sustainable track, with the annual GDP growth to continue at 4-5 per cent. The consensus is that there exist no fundamental barriers in the economy that could stop this upward trend. Lithuanian government has a strong emphasis of creating new jobs and therefore they are happy to support businesses who are planning to grow using Lithuanian specialists, using Lithuania to enter the rest of EU market and the businesses planning to export. Lithuanian government has launched a start-up visa for entrepreneurs from other countries who want to do business in Lithuania. It is designed for innovative entrepreneurs wishing to establish a start-up in Lithuania. They no longer need to fulfill certain capital or employment requirements to obtain a residence permit. If the business idea is approved by the panel of experts, it is a basis to apply for a temporary residence permit. In conclusion, Lithuania is a convenient and inexpensive jurisdiction to register a company in and to do business with good development prospects. Lithuanian companies are often used for trade, development of manufacturing, international transportation, IT, medicine, financial services and for many other activities. They are popular due to the low costs of accounting and administration, low taxes and good geographical position. But that’s not all. We would like to point out several reasons what makes Lithuania so attractive in the eyes of foreigner entrepreneurs. Lithuania is a part of the Eurozone and is a stable, west and business-oriented government, where you are likely to be understood in Lithuanian, Russian, English, often also in Polish. Lithuania has concluded agreements with many countries on avoiding of double taxation, therefore, there is a possibility of payment of dividends without tax. It is a country with relatively inexpensive labour, low price level and no exchange controls. Lithuania is one of the leaders in the ranking of the worlds freest economies on the ease of starting a business, as well as one of the leaders in Europe according to the index of investment attractiveness.

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REAL ESTATE TRENDS

The country's major cities – Vilnius, Kaunas and Klaipėda remain the main markets for new construction apartments, however if we had to name the absolute winner of the housing market in 2020, it would undoubtedly be the seaside region. After restrictions were imposed on travelling abroad and social contacts, and after a person's freedom of movement within the country was "tied down" to his owned real estate, a significant number of people decided to invest in seaside housing. In the segments of individual residential houses and land plots, the country's three major cities and their district municipalities were the most active. For these markets, 2020 was not as successful as for the seaside region, but they weathered the pandemic better than the urban apartment market, and even managed to grow.

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STATS & MORE

Area
65000
Capital
Vilnius
Immigration

Company formation with €29,000 capital*

Slovenia

Slovenia Map

PROPERTIES & RESIDENCE

Pros for obtaining a property in Slovenia
Slovenia's GDP per capita is 26,000 EUR, which makes it one of the richest country in the region. Visa-free access to over 180 countries for the holders of the Slovenian passport.

Residence permits on the grounds of owning real estate
Business investment and setting up the company (7,500 EUR has to be injected); then you invest 50,000 EUR into the company to purchase the property. After the company invests into the property you can apply for the residence permit. In total 60,000 EUR is needed.

Residence permits on the grounds of company formation
Business investment and setting up the company (7,500 EUR has to be injected). Lee & Bronski have a way to begin the residence permit application only after the first investment of 7,500 EUR; the precondition is that you must get yourself hired by your own company.

Taxes & Rental Income Tax
Taxes is Slovenia are quite heavy: CIT - 19%, PIT - 15%, sales tax - 20%, social security - 38%.
Rental income tax: you can choose 10% of the gross income or 15% of the net income; you can deduct the costs for the tax office.

Other residence types in Slovenia
Employment, studies, family relationships, ownership of real estate, and others.

Which residence permits offer a path to permanent residency and citizenship?
Any business formation model offers a path to permanent residency; similarly as family relationships and others.

Restrictions & Challenges You may need 10 years to apply for the passport, which is a great document; but the taxation system is not very welcoming. Residency permit takes around 6-9 months to be fully approved. Certain properties are not approved for sale to the foreigners. You need to spend 6 months in Slovenia (though you can get away with this being in the Schengen zone). The permit is available for the families as well. All documents require apostille. A very small number of Slovenian people speak in English. World wide income is bound to taxation, while double citizenship is now allowed.

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Most foreign investors are attracted by Slovenia’s strategic position at the heart of Europe, its excellent transport and ITC infrastructure, its value chains, industry clusters and centres of excellence. Investors keen on locating their operations at the heart of the market with 500 million consumers will find Slovenia’s international commercial contacts and the land-sea-air transport system ideal.

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GROWTH & BUSINESS ADVANTAGES

Slovenia has been an open market since its successful economic transition of the 2000s. As a member of the European Union since May 2004 and of the Eurozone since 2007, Slovenia is an advanced, independent and stable country. The weak performance of Slovenia’s main trading partners (the country maintains a long tradition of trading with neighbouring countries, making it vulnerable to its neighbours’ economic health) had already slowed down growth in 2019 (3.2%), with the situation worsening due to the COVID-19 pandemic, which caused a contraction in all demand components except government consumption. Overall, the IMF estimated the country’s GDP to have fallen to -5.5% in 2020; as the global situation is expected to gradually improve, growth is forecasted at 3.7% this year and 4.5% in 2022, thanks to a rebound in private consumption as well as increased investments both from the public and private sector. Similarly, the government budget was burdened by the measures taken to cushion the effects of the pandemic, which had a total budgetary impact of around 5.2% of GDP (including wage compensations, exemptions from pension and disability insurance contributions, tourism vouchers, a monthly basic income for self-employed workers and farmers, etc.). Therefore, the overall deficit was estimated at -5.9% by the IMF (8.75% as per the EU Commission), with a forecast of -5.1 for 2021 and -3.8 in 2022. The drop in GDP and the large deficit caused a sharp increase in the debt-to-GDP ratio, which went from 65.6% in 2019 to approximately 81.5% in 2020. It is then projected to gradually fall to 80.5% and 78.2% in 2021 and 2022, respectively, on the back of the economic recovery. Weak internal demand and low energy prices caused a slowdown of inflation, which stood at -0.1% in 2020. It is expected to get back to its pre-crisis level during the course of 2022 (1.5%). Doing business in Slovenia and travel to other EU countries: With business migration to Slovenia and registration of a company, you also can obtain a residence permit in Slovenia, which allows you doing business in Slovenia and other EU countries freely and also travel on business or on private. No tax on property: Private individuals and companies in Slovenia do not pay taxes on their own property, and it is paid only for the use of land on which your property stands, which is much more profitable than property tax. The advantage of business immigration to Slovenia is also that if you as a natural person do not have the right to buy the real estate in Slovenia, you can buy it as legal entity and it will make no difference. Low income tax in Slovenia: You will also calculate how much tax you will have to pay for the company in Slovenia. If your company at the end of the financial year will work with a profit, the taxing is going to be at the rate of 19%. The income tax in Slovenia is not considered separately for each transaction, but specifically on the annual level. Two different rates of VAT: The second tax that you will calculate in the process of business migration to Slovenia is VAT. In Slovenia, we have two different VAT rates. If you work with companies inside the EU, you will have to be in the Slovenian VAT system. In most examples, VAT in Slovenia is 22% – so-called high rate, and 9.5% low rate of VAT – for food, beverages, residential real estate, real estate reconstruction, hairdressing and cleaning services. Free education and kindergarten: If, with business migration to Slovenia, you also think about reuniting your family, the good news is that you do not have to pay for the education of your children. Slovenia for all children provides a free compulsory education, from basic education to the university. High quality schools and graduates of Slovenian universities work throughout the EU and are highly recommended. The high quality of healthcare system: In the process of business migration to Slovenia you will definitely consider the conditions for living in Slovenia. A quality healthcare system is another great advantage of business migration to Slovenia.

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REAL ESTATE TRENDS

When the pandemic paralyzed the world, the Slovenian real property market was flourishing, with new investment and construction cycles. The country was experiencing the rapid and stable growth of sales and prices, since supply could no longer meet the increased demand. Hand in hand with general economic growth, online booking activity (Airbnb, booking.com) has spread through the country and to major cities (Ljubljana, Maribor), severely impacting the rental housing market, especially long-term rental relationships. The Slovenian capital of Ljubljana, with a population of around 300,000 is one of the smallest capitals in Europe and arguably on Europe’s most sustainable destinations, experiencing tremendous growth in terms of visitor numbers and press recognition within the last 10 years. The city is located in Central Slovenia and it is the strongest area in terms of economic development, and is the administrative, economic, cultural, and scientific centre of the country. On the other hand, Slovenia is also among EU countries with the highest housing deprivation rates.

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STATS & MORE

Area
20000
Capital
Ljubljana
Immigration

Company formation with 7,500 EUR

Spain

Spain Map

PROPERTIES & RESIDENCE

Pros of obtaining a property in Spain

Open and dynamic. In the last five years, the Spanish economy has steadily outperformed its European counterparts in a pre-pandemic scenario. Spain is one of the countries in the world with the least restrictive regulations on international investment.

A strategic hub. Spain has the largest road and motorway network in the EU, two of Europe's busiest airports, the third largest high-speed rail network in the world and is home to three of Europe's most important container terminals moving ports.

Well-trained human capital. A large proportion of the Spanish population has a higher education qualification. Compared to neighbouring countries, it is easier for companies to find specialised talent to fill their ICT vacancies in Spain, and at a cost that is more competitive than in other major European economies.

Support for innovation. Spain's tax burden is similar to the EU average. Spain offers subsidies and grants and has a comprehensive system of tax incentives and exemptions to promote RDI activity, knowledge transfer and job creation.

A longer and better life. Spanish people have a longer life expectancy than most countries in the world, thanks to its gastronomy and the enjoyment of leisure activities. Spain's universal healthcare is among the world leaders in the healthcare system.

Residence permits based on real estate ownership

The Spanish Residence Visa Permit, also known as the Spanish Golden Visa, is issued to non-EU residents buying property in Spain. The minimum investment in Spanish real estate per investor is €500,000.

In order to get a Spanish residence golden visa, you can buy:

  • one or more properties
  • residential, commercial or industrial property; or rural or development land
  • property located anywhere in Spain

This residency will give you the possibility to live and work legally in the country as it implies a work permit.

You can easily include your relatives in your application and move to Spain with your family (they will also get their residency, just because you, the main applicant, meet all the requirements).

The residency for property buyers is 2 years. Once the period ends, you can renew it as long as you keep your investment in the country.

The number of years on this visa counts towards permanent residency (after 5 years in the country) and Spanish citizenship (after 10 years).

Residence permits based on new company formation

Non-EU nationals who wish to open a company and live in Spain need to obtain a so-called self-employment and residence permit. It allows you to work as a freelancer/company manager and register for social insurance in Spain.

Lee & Bronski find this procedure both long and complicated. If a number of criteria* are not found satisfactory by the immigration officers, your application will be declined despite your heavy investment of efforts, time and money.

*proof of availability of material means of production or service; proof of disposing of a venue, by property title or, if applicable, the lease of the premises; copy of the documentation accrediting the training and, if applicable, the professional qualification legally required; a detailed business plan containing market analysis, required licences, projected earnings and employment for the coming years, etc.; proof of disposing of the necessary financial investment to which reference is made in the business plan; and others.

Taxes & Rental income tax

Individuals performing activities in Spain are subject to tax based on residence and source of income. Residents are taxed on worldwide income. Non-residents are taxed on Spanish-source income and on capital gains realised in Spain only. Several tax exemptions may apply to expatriates.

Capital gains are calculated as the difference between the transfer price of an asset and its acquisition price.
Capital gains are taxed at a rate of 19% on the first €5,999.99, at a rate of 21% on the amount from €6,000 to €49,999.99 and at a rate of 23% on the amount from €50,000 onwards.

Under Spanish domestic law, an individual must join the Spanish social insurance system if work and residence permits are received. The rate of social insurance contributions is 6.35% of salary for employees, and the rate for employer contributions is generally 29.9% of salary. For 2020, the maximum base for employee contributions is €48,841.20. For 2020, the maximum annual contribution is €3,101.42 for employees and €14,603.52 per employee for employers.

Spain has entered into double tax treaties with 89 countries.

Other residence types in Spain
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Which residence permits offer a path to permanent residency and citizenship?
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Restrictions
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Open and dynamic. The Spanish economy has steadily surpassed that of its European counterparts over the last five years, in pre-pandemic circumstances. Spain is one of the countries in the world with the least restrictive regulations for international investment.

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GROWTH & BUSINESS ADVANTAGES

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REAL ESTATE TRENDS

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STATS & MORE

Area
506000
Capital
Madrid
Immigration

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