Investment Citizenship of Portugal

Investing in Portuguese Investment Funds as a Mechanism for Obtaining a Residence Permit.

Portugal's Golden Visa program offers foreign nationals several options for capital investment in exchange for a residence permit. Real estate purchase remains the most popular option. However, for those who do not intend to move to Portugal and do not plan to manage capital personally, the government has developed a mechanism for investing through financial funds. This investment option promises foreign citizens not only a residence permit but also high returns—3-10%.

Investment funds allocate capital to projects in need of financing, and the resulting profits are then distributed among investors. The funds are not limited to any specific sector. However, statistics show that a large portion of the funds is invested in real estate. Typically, funds are established for 5-10 years.

Advantages of Investing in Investment Funds

Investment funds assume all financial obligations related to capital management, which reduces the investor's expenses. Investing in investment funds is associated with the following fees and commissions: 1.1. Entrance fee (usually included in the total investment amount), 1.2. Annual capital management fee (1-2%), 1.3. Performance fee (10-30% of the profit after the fund’s completion and asset sale). Tax optimization reduces the investor's fiscal burden, and sometimes even exempts them from paying income tax. The minimum investment amount in funds under the program conditions is only €350,000—less than the amount required for purchasing new real estate (€500,000) or investing in a business (€1 million). Note: The conditions of the Portuguese residence permit program will change in 2022. The minimum investment in funds will increase to €500,000. Risk minimization through efficient distribution of investments across unrelated projects. In other words, investment funds allocate capital to various projects, some of which may be unprofitable, while others could be highly profitable.

Risks of Investing in Investment Funds

Collaboration with investment funds follows the principle of a limited liability company, so the investor only risks the amount of their invested capital and is not liable for the fund's obligations.

Investment funds do not guarantee a consistent profit or a timely return of capital.

The fund reserves the right to sell assets within 1-3 years if market conditions are unfavorable and could lead to reduced profits or losses.

To ensure safety, it is advisable to choose funds whose reliability is confirmed by a certificate from the Portuguese Securities Market Commission.

Following a risk analysis, GARANT.in Immigration Center specialists have compiled a list of the most reliable Portuguese investment funds and their projects. We will help you choose an investment fund with the most favorable conditions and capital return guarantee under Portugal’s "Golden Visa" program.

Features of Portugal’s Investment Citizenship: Legislative Changes and Conditions for 2023

The Golden Visa program of Portugal (Portugal Golden Visa) was launched over 10 years ago to attract funds from non-resident investors and foreign citizens for economic development.

By contributing their legally obtained funds to the Portuguese budget, applicants receive a residence permit with the right to later obtain permanent residence and a passport. This year, the program may undergo significant changes.

Will Portugal Close the "Golden Visa" Program?

In mid-February, there were reports that the government is considering suspending or completely closing the investment program. This statement was made public by Prime Minister António Costa. Since the program’s inception, Portugal has received over €6.9 billion in the treasury, issuing more than 11,600 Golden Visas.

António Costa stated that issued documents could be extended, but only if foreign residents personally use the acquired property or rent it out for a long period. One of the main reasons for canceling the program is to "combat real estate speculation."

Residents of China, Brazil, and the United States have ranked among the top recipients of Portugal’s residence permits by investment.

The Prime Minister proposed shutting down the investment project as early as late last autumn. In his statement, he emphasized that the investment program had served its purpose and there was no further reason to extend it.

Portugal’s Golden Visa – Current Status

Despite government statements, Portugal continues to issue residence permits to foreign residents for investment contributions. Today, it remains the only way to obtain a passport without mandatory residence in the country. The project was designed to attract capital from non-EU citizens. Officially, the program has not yet been discontinued, but it makes sense to hurry to participate—it is unclear what steps the Portuguese authorities will take next.

The final decision will be made on March 16, following the results of the vote. After this date, it will be clear what the future holds for the investment program. In any case, it is advisable to start the application process immediately!

How to Apply for Portugal’s Golden Visa?

The investment program offers several available participation options.

“Real Estate Investment (Residential Property)”

To participate in the program, it is necessary to purchase a residential property for at least €280,000. Important! Property purchase is allowed only in certain regions; as of January 1, 2022, restrictions and even a complete ban on purchases in the most popular and densely populated regions have been imposed. Housing in Porto (some districts), Lisbon, Algarve, and Braga is no longer available for the investment project.

“Commercial Real Estate Investment”

To purchase commercial real estate, at least €500,000 must be allocated. Real estate can be purchased for €350,000 if the property is part of an urban rehabilitation project. If the property is located in a low-density area, the minimum investment threshold can be reduced by 20%. Commercial property can be purchased in any part of the country; there are no regional restrictions.

“Business Project Investment”

A minimum investment of €500,000 is required in an operating business project (registered in Portugal) and the creation of at least 5 permanent jobs. Employee employment should last for at least 3 years.

“Investment Funds”

This involves an investment of at least €500,000 in venture or private equity funds.

“Capital Transfer”

To obtain a residence permit, it is necessary to transfer at least €1.5 million to the country’s treasury.

“Non-refundable Investments”

To participate in the program, it is necessary to contribute at least €250,000 to a national heritage preservation fund or invest in research (from €500,000).

Benefits of Obtaining Portugal’s Golden Visa

Portugal is a developed European country with a mild climate, a convenient geographical location, and a high standard of living. Golden Visa investors gain access to numerous privileges associated with this status:

• Portugal is a member of the EU and the Schengen Area. Residents and citizens of Portugal can legally reside in the country, find employment, start a business, and receive education in any European country.
• The investment threshold is one of the lowest in Europe.
• The candidate and their family can stay in Portugal for just 7 days a year, and live anywhere in the world for the rest of the time without losing their resident status.
• Last year, the Portuguese passport was recognized as one of the most valuable in the world—it ranked in the top 5.
• Portuguese citizens can freely enter 187 countries around the world.
• Favorable tax legislation. New residents have access to tax benefits and a special tax status. Additionally, they are exempt from paying taxes on various types of personal income for up to 10 years.

There is no need to travel to Portugal in person to participate in the project. Initial documents, applications, and other forms can be submitted through a licensed agent. GARANT IN, a leading company in the field of investment immigration, is ready to assist you at any stage.

We have been working in this field for over 10 years, handling hundreds of completed cases and thousands of satisfied clients. We take on even the most complex and seemingly hopeless cases (from the client’s perspective). We guide clients from the first consultation to their final relocation. During your first visit, we will listen to your preferences, suggest suitable options, and together choose the most appropriate solution.

We offer a full range of services: document collection, processing, apostille, application submission, payment of taxes/fees/duties, selection of the optimal investment method, and real estate choice. We will help you select a university, kindergarten, or school at your new location, rent housing, obtain a driver's license, and undergo a medical examination. You don’t need to spend valuable time and effort on resolving current issues; we will do it quickly and efficiently.

35% of Golden Visa Applicants in Portugal Chose "Alternative" Investments in 2020

The Portugal Golden Visa program raised €56 million in July 2020, significantly lower than the €98 million in July 2019, but only slightly below the average monthly investment in the program throughout 2019 (€62 million). In the first five months of 2020, Portugal's total revenue from the program reached €439 million, just 6.7% less than the amount collected in the first seven months of 2019.

In July, 108 main applicants and 202 dependents received residence permits, including 21 Chinese, 12 American, 9 Brazilian, 8 Vietnamese, and 7 Lebanese investors.

Since the program’s inception at the end of 2012, a total of 9,015 investors and 15,431 of their family members have received approval. Although Chinese nationals remain the largest group of individual applicants, their share in the program has decreased from a peak of 82% just four years ago to about half today.

In 2020, Chinese applicants accounted for only 23% of all candidates, while the "other" category (those not from any of the top five applicant countries) grew to more than half of the total.

The Portugal Golden Visa is expanding not only in terms of applicant nationalities but also in the types of investments preferred by applicants. There are eight available options for ARI (Authorization of Residence for Investment Activity), two of which have never been chosen. While nine out of ten applicants opted for real estate investments of €500,000 during the first six years of the program, this share dropped to 65% in 2020 (though it still represents 72% of the total investment volume due to higher minimum requirements).

The option of purchasing real estate at a fixed price of €350,000 is increasingly replacing the traditional €500,000 real estate route. In 2020, 28% of investors chose this option, and its share has been steadily growing each month.

The most significant growth in relative terms has been observed in the venture capital/investment funds category of €350,000, which attracted 28 investors in 2020 compared to just seven investors during the entire previous year.