Foreign investors are offered a big bonus for buying property or investing in business in Latvia: European Union residency rights.

Since the law offering the rights to non-EU citizens who buy homes in Latvia was introduced in July 2010, it has brought attention and investment to the country -- as well as controversy. Many Latvians have protested the plan, claiming that it will raise house prices and make them more unaffordabe for locals.

According to the law, non-EU member foreigners who buy property worth at least €70,000 (US$93,000) or invest in business in Latvia can apply for EU residency rights. These would not give them the right to work in the EU, but would allow them to move freely within the 25-nation Schengen Area.

More than 100 foreigners have already applied for the rights after purchasing property or investing in business in Latvia -- all of them from the former Soviet Union. This is another reason why some oppose the law: Latvians remember decades of Soviet occupation and oppression, and are not happy about attracting more Russian investment. Roberts Zile, a Latvian member of the European Parliament, believes that it will increase Moscow's continued influence in the country.

In response to fears that the law would also be exploited by criminals, the government says that all applicants are thoroughly checked out before being awarded residency rights, and forbids cash payments to prevent money laundering.

Source: BBC News