Golden Visa Portugal: Everything You Need to Know Before Applying

What You Need to Know Before Applying for Portugal's Golden Visa?

No other European country compares to Portugal in peaceful political relations, as it ranks third globally in the “Global Peace Index.” The ease of doing business in the country is increasingly attracting migrants, earning it 25th place in Forbes’ list of the best countries for business.

What else makes this country noteworthy? Portugal offers a citizenship-by-investment program (ARI), commonly known as the “Golden Visa.” This is an opportunity to obtain a residence permit (RP) and eventually a passport by investing in the Portuguese economy, usually through real estate purchases.

In this article, you'll learn about all the features and requirements of the program and find answers to questions such as:

• How the program is structured
• Investment options
• What is expected from investors
• The steps for obtaining the “Golden Visa”
• Requirements for RP holders and their renewal
• Obtaining permanent residence and citizenship
• Program Statistics
• Real estate market trends and prices

How the Program is Structured

Portugal’s “Golden Visa” program launched in October 2012. It allows non-EU citizens to obtain a residence permit through investment for five years. The program also allows freedom of movement within the Schengen Area. After five years, one can apply for permanent residence and Portuguese citizenship.

When ARI was launched, a conservative government was in power, and it was renewed in 2015 under a socialist coalition. This is encouraging for investors, as all major political forces support the “Golden Visa,” and it is not listed in the OECD’s blacklist for ARI programs, which includes around 20 compromised programs, such as those of Monaco and Malta. Portugal’s “Golden Visa” program, on the other hand, is trusted by this organization.

How to Make Your Investment

There are two most common ways to obtain a Portuguese “Golden Visa”:

1. Purchase Real Estate: This can be a single property or multiple properties. The main requirement is an investment of at least €500,000. However, since 2015, there has been a cheaper option—€350,000 for properties that are over 30 years old and located in areas of cultural or historical heritage.
2. Contribute to the Economy: This can be done in the following ways:
   • Open a bank deposit, purchase government bonds, or buy shares in a commercial enterprise for €1 million.
   • Invest €500,000 in supporting small businesses.
   • Invest €350,000 in the share capital of a Portuguese company and create five jobs for three years.
   • Invest €350,000 in the development of a public or private research institution that is part of the scientific or technological system.
   • Invest €250,000 in preserving the country's cultural heritage or artistic production.
   • Create ten jobs for residents.

Most investors choose to buy real estate. According to data, out of the €4.4 billion that entered Portugal through ARI, only €415 million were invested in the country’s economy.

What is Expected from Investors

The candidate applying for the “Golden Visa” must meet the following requirements:

• Citizenship: They cannot be a citizen of an EU country or a member of the European Free Trade Association.
• Personal Presence: During the documentation process, the applicant must come to Portugal for an interview. The Foreigners and Borders Service has simplified this requirement, allowing interviews to be conducted not only in the region of investment but anywhere in the country. This significantly speeds up the process, especially for investments in major cities like Porto or Lisbon.
• Investment: The investment can be made by a legal entity or an individual. In the case of a legal entity, the candidate must be the direct owner or a member of the company, whether it is an investment or holding company. However, the legal entity must be based in the EU.
• Family Members: Documents for relatives should be submitted along with the main application. The residence permit can be granted to the applicant's spouse, minor children, and in some cases, parents.

The application review and approval process takes up to four months. Afterward, the applicant receives the RP card within 10–20 days.

Steps to Obtain the “Golden Visa”

The stages for obtaining a residence permit in Portugal are as follows:

1. Opening a Bank Account and Obtaining a Taxpayer Number (NIF): To receive official confirmation from the Bank of Portugal that the investment has been made and transferred, you must have a bank account. To open one, an NIF is needed. To obtain this number, you need a legal address in the EU; if not, you must find a representative to interact with the local tax service, such as the applicant's lawyer.
2. Selecting a Property and Making the Investment.
3. Document Processing: Gather documents in your home country, legalize them, and translate them into Portuguese.
4. Collecting Documents in Portugal.
5. Filling Out and Submitting the Application: Document processing fees apply: €528 for the applicant and €82 for each family member. The final amount varies depending on the number of family members.
6. Approval from SEF (Foreigners and Borders Service).
7. Scheduling the Interview in Portugal: Bring the original documents that were submitted with the petition to the interview.
8. Await Final Approval and Receive the RP Card: The initial RP card costs €5,274.

On average, it takes 90 days to process the application. Due to bureaucracy, these deadlines were significantly extended, but the authorities resolved this issue by allowing applications to be submitted online.

Requirements for RP Holders, Status Renewal, and Obtaining Permanent Residence and Citizenship

• The First Year: During the one-year visa validity, the resident must stay in the country for at least seven days. About a month before this period ends, it must be renewed. Biometric data and updated criminal records must be submitted. The renewal fee is €2,637 per person. As with the initial card, a processing fee must be paid.
• The Second and Third Years: Over these two years, the investor must stay in Portugal for at least 14 days. At the end of the third year, the renewal process is repeated, similar to the end of the first year. The second card is also valid for two years.
• The Fourth and Fifth Years: The same conditions apply as for the previous two years—stay in the country for at least 14 days. At the end of the fifth year, the investor can apply for permanent residence or citizenship and sell the purchased property. Previously, citizenship was only available after six years, but since 2018, this period has been shortened by one year.

Program Statistics

Here are some changes that have occurred over the seven years of the ARI program’s existence:

• From 2012 to 2019, more than 7,000 investors and 12,254 of their relatives received Portuguese RP. The total amount of their investment in the country amounted to €4.4 billion.
• In 2015, the number of RP granted decreased sharply compared to 2014: 756 versus 1,526.
• After the rules were revised in 2015, allowing the purchase of older properties for €350,000, the number of RP granted increased almost to previous levels—1,414 visas were issued in 2016.
• In 2018, RP was granted to 1,409 investors and 2,500 of their relatives.
• Most of those who successfully used the program were Chinese; during the ARI program, Chinese citizens received 4,159 RPs, though their number has been declining in recent years. They are followed by Brazilians (695), Turks (317), Africans (281), and Russians (248).

Real Estate Market Trends in Portugal

The leading method of investment in the “Golden Visa” program is real estate purchase, and investors have been one of the main factors driving market growth since 2014 after three years of decline. Since 2014, prices have been steadily rising, presenting a promising outlook.

According to the National Statistics Institute (INE), the value of Portuguese real estate increased by 6.09% in 2018. The growth in the fourth quarter compared to the third reached 1.24%. The average price was €1,220 per square meter.

Prices in the Greater Lisbon area, which includes the city and its suburbs, rose by 7.9% in 2018 compared to 2017, with an average price of €1,502 per square meter. Among the five largest cities in the country, Lisbon had the smallest increase (2.4%).

In the other four cities, prices rose more rapidly: in Porto by 15.6%, in Amadora by 13.9%, in Gaia by 10.3%, and in Braga by 10.1%. However, among the 24 districts of the city, prices decreased over the year only in Coimbra—by 2%.

Well, 2019 holds great promise. Moody’s Investors Service predicts that prices will increase by 7–8% annually until 2020.

Portuguese Real Estate Prices

Data from the National Statistics Institute shows that at the end of 2018, Lisbon was the most expensive city for residential real estate at €2,877 per square meter. This refers to the median price (half of the prices are below this value, and half are above). Meanwhile, the average price across Portugal is €985 per square meter. In large cities, the general level was raised by Lisbon, Porto (€1,525 per m²), and Amadora (€1,179 per m²). Braga and Gaia stood out with more affordable prices compared to the country as a whole: €753 and €925 per m², respectively.

Median Cost per Square Meter of Residential Properties in the 5 Largest Cities at the End of 2017:

Lisbon – €2,438, Porto – €1,307, Amadora – €1,037, Gaia – €845, Braga – €697. As of 2016, the center of Lisbon and the coastal area of Cascais were the most active.

Over the past five years, the Portuguese real estate market has recovered its previous prices, which were prevalent before the 2011 crisis. In 2018, the price per square meter was 3.9% higher than in the most expensive season—the second quarter of 2010. Meanwhile, the Northern region, where Porto and Braga are located, exceeded this level by 9.8%, Greater Lisbon by 3.7%, the southern region of Algarve by 4.6%, and the Central region by 1.2%. However, in Madeira, Alentejo, and the Azores, prices remain lower than in 2010. Meanwhile, the number of transactional operations with residential real estate increased by 60,000.

According to a survey by the international consulting firm “Deloitte,” players in the Portuguese real estate market, including representatives from banks and corporate and insurance companies, stated that they expect growth in prices and sales volumes in all real estate sectors, especially residential (75%). In their opinion, foreign investors, demand, and new market players are the main factors driving this growth. However, there are concerns that tax policies and bureaucracy could reduce activity.

Summary

Portugal is a reliable and developing EU country. It strives to create attractive conditions for investors, and so far, it has been quite successful. A participant in the "Golden Visa" program receives a lot for their investment: a residence permit (RP), and later can apply for permanent residency and citizenship. Additionally, they may sell the property if they wish.

Irrefutable statistical data, along with the opinions of professionals and experts, suggest that the property purchased for participation in the program can be sold very profitably. Without a doubt, Portugal is a wise investment. Weigh all the pros and cons quickly and join the thousands who have already obtained citizenship in this future-oriented country.

Portuguese Government Cancels Golden Visas for Lisbon and Porto

During the discussion of budget amendments in the Portuguese Parliament, Ana Catarina Mendes, leader of the Socialist Party, announced plans to abolish the golden visas for the most popular real estate purchases in Lisbon and Porto. The aim is to redirect foreign investments inland and to the autonomous regions of Madeira and the Azores.

Mendes emphasized that this decision “will certainly not have retroactive effect,” according to Público. She stated that the Socialist Party considers it necessary to combat real estate speculation. “Therefore, we propose changes to the issuance of golden visas, encouraging investments in inland and autonomous regions,” the party leader added.

According to her, the changes will take effect this year, meaning those who wish to enter with a golden visa obtained through real estate investment will not be able to do so if their property is located in the two largest cities of the country. Mendes added that those who received a visa through job creation would not be affected. It is also expected that those opting for the increasingly preferred option of investing in investment funds will not be affected by the changes.

“Thus,” Mendes continued, “we hope to ease the pressure [in the real estate market] existing in the areas of large metropolises [Lisbon and Porto]. This measure will subsequently lead to greater territorial unity.”

Earlier this month, Luís Lima, president of the Portuguese Association of Real Estate Professionals and Companies, urged the government not to overdo the reform of the golden visa.

“I understand that there is a gap and that it is necessary to invest in those areas that need it,” said Luís Lima. “I have long advocated decentralizing real estate investments and firmly believe in our country’s potential. However, I fear that in delineating the areas that need financial influx, some regions that also need investment incentives will be overlooked.”

Unfortunately, his concerns now seem more justified than ever.