Golden Visa Portugal Program

Portugal's residency-by-investment program was launched in October 2012. Although it had a slow start, several significant improvements led to positive results. Over eight years, approximately 9,000 foreigners and more than 16,000 family members obtained residency in Portugal through investment.

The appeal of Portugal’s “Golden Visa” to investors can be attributed to the program's accessibility, flexibility, and prospects of obtaining European Union citizenship. A crucial factor influencing the decision of foreign citizens is the country’s stable economic and political situation.

Smart Policy = Stable Economy

The COVID-19 pandemic of 2020 tested the resilience of economies worldwide. The economic downturn and quarantine restrictions disrupted the established way of life. In such challenging circumstances, the Portuguese demonstrated discipline and responsibility. The government's prudent policies prevented a major economic collapse. Portugal received praise from the international community for its exceptional crisis management. Domestic processes under strict quarantine were organized in record time:

• The economy quickly adapted to new working methods using videoconferencing. Many companies realized they could operate differently, turning the “forced reorganization” into a new learning experience.
• There was no disruption in public services, as most were already digitized. When the real estate sector complained that international buyers were unable to close deals due to travel restrictions or the closure of consular services abroad, Portugal quickly passed a law allowing certain transactions to be conducted online and electronically, including remote notarization.
• In terms of education, Portugal responded faster than most of its neighbors. As a leader in remote work and education within the EU, most schools did not experience interruptions.

As we can see, it's no surprise that many foreign nationals choose Portugal for investment and/or relocation. The country successfully handles challenges, enhancing its reputation. Portugal was recognized as the best place to live in the EU and ranked among the top 10 safest places in the world post-COVID.

The reality of the “Golden Visa” Program in Portugal

Portugal's immigration law offers several investment options for potential residency holders: real estate purchases, acquisition of government bonds, opening a deposit, non-refundable contributions to government funds, and more. Despite the various mechanisms, 90% of investors prefer real estate purchases.

The real estate fund that supports the program includes residential and commercial properties.

Important!

Real estate investments are refundable.

After obtaining residency, a foreign investor has the right to rent the property, with potential profits reaching 6% annually.

Real estate investment also extends to venture funds that invest in construction projects or purchase income-generating properties.

Participation in a venture fund ensures an investor an average annual profit of 3-4% of the invested capital.

Property Type and Location Determine Minimum Investment Amount

You can obtain residency in Portugal through the following investments:

• Real estate worth at least €280,000 in low-density population areas.
• Real estate over 30 years old and/or in need of renovation (minimum investment €350,000).
• High-end housing or new developments (minimum investment €500,000).

The lowest entry threshold for the program is set for investors purchasing properties in regions distant from the capital district and coastline. This is how the Portuguese authorities encourage wealthy foreigners to invest in less developed regions of the country. Due to the need for financial redistribution, from 2021 onwards, the program will suspend real estate sales in popular cities like Porto and Lisbon.

However, the crisis has already altered investor preferences. Following the COVID-19 pandemic, demand for older properties has increased by 20%, driven by various subjective factors and the lower rates for obtaining the “Golden Visa” (€350,000).

Assistance with Obtaining Portuguese Residency

With a professional approach and expert help, obtaining Portuguese residency through investment can take just 4-9 months. GARANT.in Immigration Center has extensive experience in this area.

Our specialists guide clients through six key stages on the path to obtaining Portuguese residency:

1. Preliminary client check and signing of a cooperation agreement.
2. Preparation of the necessary document package.
3. Opening a bank account in Portugal. Obtaining a tax number. Purchasing real estate.
4. Receiving the purchase agreement and submitting copies of documents for residency to SEF Portugal.
5. Biometric data submission.
6. Submission of original documents.

By contacting us, clients can expect effective and professional assistance and legal support at all stages of obtaining residency, and potentially permanent residency and citizenship later.

Secrets to the Success of Portugal’s Investment Program

The success of any investment program depends on several factors. First and foremost, it’s a well-designed system of options that allows the investor to choose the most suitable investment option and receive a beneficial package of rights and opportunities in return. A stable economy is also crucial, guaranteeing the safety of invested capital and real prospects for its growth. All these qualities are demonstrated by ARI—Portugal's residency-by-investment program.

New Golden Visa Portugal Rules: Nothing to Fear

To ensure balanced regional development, the Portuguese government has adopted a series of important amendments to the Golden Visa program, effective from January 2022.

Foreign capital is significant for the country. However, the majority of investments are concentrated in areas with tourism and commercial appeal, leaving regions away from the coast and capital underfunded.

In addition to the expected increase in participation costs and the exclusion of residential properties in Lisbon, Porto, and the Algarve from the list of investment options, there are several other important amendments, which are not yet widely known or only partially understood.

Increased Entry Threshold for the Golden Visa Program:

• The minimum investment for the “Capital Investments in Commercial Companies” option will increase from €350,000 to €500,000.
• The cost of participating in the program through capital transfers (purchase of securities, deposits, etc.) will increase from €1 million to €1.5 million.
• Purchasing residential real estate under the program for less than €500,000 is allowed if it is located in the autonomous regions of the Azores and Madeira or inland territories. The list of districts where housing purchases are allowed for residency purposes is determined by law.

Good News for Investors:

• The reduction in areas available for investment will only affect residential real estate. Commercial investments (purchase of commercial properties, investment in development projects) will not be subject to the new Golden Visa Portugal rules.
• The entry threshold for the program will remain at €280,000 for purchasing residential properties in low-density areas and €350,000 for purchasing old or renovation-needed properties.

To participate in Portugal’s Golden Visa program under the current conditions before the new rules take effect, applications must be submitted by December 31, 2021.

Advantages of Golden Visa Portugal

Portugal’s “Golden Visa” is the fastest route to European Union citizenship without residency requirements. To be eligible for citizenship five years after obtaining residency, one only needs to spend two weeks in Portugal annually.

Children of parents holding Portuguese residency can acquire Portuguese citizenship within the first year of life.

The favorable tax system exempts income from foreign sources from taxation. Portugal has no wealth tax.

These are just a few of the many benefits investors receive with a residency card.

Golden Visa Portugal: Funds or Real Estate?

Capital Investments in Investment Funds

Investing in funds allows saving on related expenses that are unavoidable when purchasing real estate. These include repair costs, furniture, and, of course, taxes:

• Property transfer tax IMT (about 6%);
• Stamp duty (0.8%);
• Annual municipal tax (0.2-0.5%).

Subscribing to investment funds practically eliminates tax expenses but requires paying management fees, for example, around 30% depending on the project.

This option is often chosen by investors who do not plan to personally manage their capital and do not intend to move to Portugal.

The application process for fund participation and investment is not time-consuming, which is very convenient given that only two months remain before the new program conditions take effect, raising the minimum investment amount for this option from €350,000 to €500,000.

Real Estate Investments

Real estate investments, in turn, offer an advantage over fund shares in terms of liquidity. An investor can theoretically sell the asset at any stage if they do not fear losing Portuguese residency. With real estate, this is relatively easy, but it’s more challenging with fund shares. Although there are no restrictions on resale, finding an actual buyer before the project closes is difficult.

Additionally, when purchasing real estate, the owner gains full control over the asset and can manage it at their discretion (rent it out, use it personally) without depending on the decisions of others.

The sale process proceeds without the additional applicant checks required for fund investments. The “Know Your Customer” (KYC) procedure includes identity verification, establishing the source of capital, and assessing financial risks. Avoiding paperwork often becomes a deciding factor for applicants when choosing a residency option.

What to Choose: Real Estate or Funds?

The answer to this question largely depends on the investor’s goals. If obtaining Portuguese residency is tied to the desire to change residence, purchasing property in a new location is necessary.

However, if the primary goal is income generation and profitable capital investment without personal management involvement, then fund investments should be considered as a more suitable option.