Portugal’s Golden Visa

UPDATE: 21 October 2020

Government announces plans to end gold visas in Lisbon and Porto.

The measure, which was foreseen in the State Budget for 2020 in the form of legislative authorization, was postponed because of the pandemic, but now the Executive will accelerate the process. On the express instructions of the Prime Minister, the Executive has decided to comply the agreement between the Block and PCP in this year’s budget.

The Portuguese media has reported the minority government is seeking support from coalition partners to significantly cut back the Golden Visa Program as seen in their budget submitted to parliament. As a minority, they require support to pass any legislation which includes the budget.

Golden Visas end this year in Lisbon and Porto

Proposals to modify the Golden Visa and limit the investment to specific zones would exclude Porto and Lisbon. Earlier this year, the minority government initially approved this move, only to back down soon after, given poor timing to limit investment and jobs in Portugal.

Current expectations among professionals close to the matter are that this decision may be reversed and if it sticks, the ruling will take some time to be enforced.

There is a large lobby to maintain the rehabilitation program (350K/280K) intact to protect the employment it creates in Portugal. The proposed criteria would likely be modified to exclude the rehabilitation program (280K/350k) from the changes, considering that these changes were proposed to curb the price of the real estate in Lisbon and Porto after substantial rises that occurred because of the 500K program.

According to the “Jornal de Negócios” (paid access), which cites an unidentified government source, the Executive, on express instructions from the Prime Minister, decided that he wants to comply with everything that was agreed with Block and PCP in this year’s Budget.

The diploma should be ready by the end of the year, meaning that foreigners wishing to acquire a residence permit in the country through an investment in real estate have to do so outside the country’s major centers. Visas will only be issued to those who buy in regions in the interior.”

However, the Minister of Foreign Affairs again recently said he will oppose these changes.

In light of all this, “just in case” companies are advised to proceed immediately with files under process and also contact any potential clients that are hesitating to go ahead. If these changes go into force (expected in 3 to 4 months) this is enough time to submit the file to the Immigration Department (SEF).

Once your files are submitted to the Portugal SEF, applicants are locked in with “grandfather” rights and will not be affected by the any future changes.

— ORIGNAL POST —

Amid the recession caused by the COVID-19 pandemic, Portugal’s Golden Visa Program has recorded a spike in applications in 2020.  Its flexible requirements and overall benefits have given rise to Portugal’s first-class reputation for being one of the most sought-after immigrant investor programs.

  1. What is Portugal’s Golden Visa Program?

The Golden Visa Program refers to citizenship through investment and has been implemented by various countries including Portugal. Under such programs, an investor can obtain permanent residency visa after he/she has injected substantial investment into the target country.

In February 2020, the Portuguese Parliament proposed an amendment to encourage more investment towards the interior sectors and has resulted in property prices in the capital of Lisbon grinding to a halt.

Introduced in 2012, the Portugal Golden Visa Program has become one of the most popular visa programs in Europe. The initial Golden Visa has a 2 year validity with subsequent 2-year renewals.

  1. Who can apply for Portugal’s Golden Visa?

To be eligible for Portugal’s Golden Visa Program, applicants must meet specific requirements. Compared to other similar programs in Europe, Portugal offers a relatively hassle-free and speedy application process. Applicants can choose to invest through either: i) capital transfer; ii) property acquisition; or iii) business, as seen in the examples below:

  • Capital Transfer
    • €350,000 to acquire designated units of investment funds or venture capital funds dedicated to the capitalization of companies
    • €250,000 to support artistic production or natural cultural heritage
    • €350,000 to research activities of public or private scientific research institutions that is related to science and technology
  • Property Acquisition
    • €700,000 to acquire real estate
    • €350,000 to invest in real estate that has been constructed more than 30 years ago or that is located in an urban regeneration area to be refurbished (including renovation fees)
  • Business
  • Create a minimum of ten full-time jobs in a Portuguese company
  • €350,000 to incorporate or increase the share capital of a company, and create a minimum of five permanent jobs for three years

Applicants are required to stay in Portugal for at least seven days in the first year, fourteen days in each of the subsequent two-year periods and then visit every two years to renew their application.

The most popular option has been to acquire real estate priced at €700,000. This option allows investors to potentially enjoy a high degree of freedom; they can divide the investment amount and purchase multiple properties or rent the properties out to generate income. Recently, the option of acquiring an older estate as a renovation project has been gradually gaining acceptance among investors. As there is huge untapped potential for urban renovation projects in Portugal, it often brings lucrative returns to investors, as they can take the opportunity to renovate either commercial or residential properties. Such projects can allow investors to earn high profits in a relatively short time span at low investment costs.

Applicants are required to stay in Portugal for at least seven days in the first year (Year 1), and at least fourteen days in each of the subsequent two-year periods (years 2-3, years 4-5). Applicants should then visit Portugal to renew their application every two years. The investor requirements also necessitate applicants to provide a clean criminal record, tax clearance certificate, and health insurance, and must also pass a Portuguese language test.

  1. Why is Portugal’s Golden Visa so Popular? 

Portugal’s Golden Visa is often a desirable choice for foreign investors. Not only does holding the Visa grant a foreign investor with Portugal residency, but it also allows the foreign investor to travel visa-free throughout the EU Schengen Area. As Golden Visa holders are qualified for the Non-Habitual Tax Regime (NHR) in Portugal, it exempts tax requirements for the holder if his/her income is earned outside of Portugal.

Apart from the business benefits, Portugal allows dependent children and parents to enjoy the same right as investors. For example, they can gain full access to the comprehensive healthcare and education system in Portugal. As there are no restrictions on dual nationality in Portugal, many immigrants consider it as a back-up residency option.

  1. Amendments to the Golden Visa Requirements

In February 2020, the Portuguese Parliament proposed to limit Golden Visa applicants to invest in inland areas and autonomous regions of Portugal. The amendment aims to encourage more investment towards the interior sectors and has resulted in grinding property prices in the capital of Lisbon to a halt.

The proposal is still currently pending ratification and would not have a retroactive effect on anyone who has already obtained a Golden Visa. The Ministry of Foreign Affairs has confirmed that it “is not a priority at this moment” and will not take effect until the end of 2020.


By Jennifer Baccanello

Weir & Associates

DISCLAIMER: This article does not constitute investment or legal advice; it is purely an informative article. Ensure that you speak with a qualified professional should you wish to understand more about this program.