El Salvador Golden Visa will cost 100,000 USD instead of 3 bitcoins
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El Salvador's President Nayib Bukele has announced plans to build a Bitcoin City. The city will be located next to Conchagua volcano and will be virtually untaxed. The construction is expected to be financed by the sale of sovereign bonds denominated in bitcoins. Recall that El Salvador became the first state in the world to approve bitcoin as legal tender.
The president said that the city will have a round shape and resemble a coin. All residential areas, restaurants, railroad, airport and other objects will be dedicated to bitcoin. It is planned to use geothermal energy from a volcano to mine the cryptocurrency. Income tax will not be charged in the city, only VAT. Tentative dates and timelines for construction have not been named. The head of state estimates that most of the infrastructure will cost 300,000 bitcoins.
Due to the excitement in the background of this news, the president's intention to give foreigners a Golden Visa for five years in exchange for an investment of 100,000 USD went unnoticed. In the summer of 2021, Bukele announced that he planned to launch an investment program, requiring an investment of at least 3 bitcoins. At the time, that amount was around the equivalent of 100,000 USD, while today it is already 173,966 USD. During a speech on November 20, 2021, the head of the country confirmed the changes in the program for issuing a residence permit by investment. The minimum investment is now 100,000 USD instead of 3 bitcoins, this information was stated in the presentation at the speech.
The USD-denominated bonds will be issued in 2022. They will have a coupon rate of 6.5 %, which is about half the yield of the 10-year Treasury bonds sold today. Bitcoin City will be a promising investment option, given that a foreigner can apply for Salvadoran citizenship after 5 years of residing under a Golden Visa.
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