Changes to the Portuguese golden visa scheme were supposed to come into force from 1 July 2021, but the government decided to extend the implementation date to the beginning of 2022.
The move increases the minimum investment to qualify for the scheme, which has been one of the most popular in Europe since its introduction in 2012.
The increases are quite significant and range from between €150,000 to €500,000 (£428,014, $573,206):
- For capital investments, €1.5m will be required – from the previous €1m;
- Investment funds, at least €500,000 – up from €350,000; and,
- For property investments sums remain the same with €500,000, and €350,000 for urban renovation but only in qualifying areas.
Property investments in Porto, Lisbon and the costal areas soared thanks to the golden visa scheme, but now the Portuguese government wants to redistribute these funds and only allow applicants to purchase properties in less popular and populated areas.
Still some time
Howard Bilton, chairman of The Sovereign Group, told International Adviser: “Portugal’s golden visa scheme has been extremely successful. In return for relatively low levels of investment in Portugal, permanent residency is granted which leads to citizenship after five years.”
He said the popularity of the programme is largely due to its very flexible residency criteria. “Importantly for many, there is no requirement to spend more than a few days per year in Portugal to maintain the residency under this scheme. Normally it is necessary to live full-time in a particular country for the required qualifying period before there is a chance to be granted citizenship.
“All other forms of residency in Portugal would only normally lead to citizenship if the resident has lived full-time in Portugal for most of the qualifying five-year period. The golden visa is therefore attractive for those who want to qualify for citizenship but stay in their own home country while doing so.”
The changes are fast approaching, and Bilton believes there probably won’t be enough time to go down the property investment route to take advantage of the cheaper criteria.
“But there is still time, just, to complete a fund investment, so for those who wish to limit their investment, now is the time to act and to act urgently,” he said.
Property, property and more property
Jason Porter, director at Blevins Franks, said that pretty much every client interested in a citizenship-by-investment scheme has, at some point, enquired about the Portuguese golden visa.
While all eight of the scheme’s categories have proven very popular among expats, the property investment route has been, by far, the preferred one, making up 93.8% of the €5.3bn invested since 2012, Porter added.
“The re-classification of Lisbon, Porto and high-density coastal areas like the Algarve as non-qualifying, will mean interested parties will need to look more at low-density areas and property over 30 years old requiring significant refurbishment.
“The fine-tuning of the Portuguese visa programme is aimed at reducing price pressure in Lisbon, Porto and the dense coastal regions, and to encourage people to look towards low-density areas. The trend has already been towards diversification with investment across other routes increasing month by month.
“In particular, the €350,000 investment into Portuguese investment or venture fund units made up 10% of applicants in the third quarter of 2021.”
Higher requirements, fewer applications?
Despite its undoubted popularity, the increases to the minimum investments under the golden visa scheme are significant, so could this mean people will look elsewhere for a more convenient solution?
Manuela Robinson, associate director at Blacktower Financial Management in Algarve, said: “Once it was announced that there were going to be changes in the scheme from January 2022, the demand for golden visas increased, but now that we are almost at the end of 2021, it really has gone absolutely crazy as many people have left it to the last minute.
“Portugal’s golden visa is one of Europe’s most popular immigration and residence permit schemes; this visa grants investors the right to study, work and live in the country, as well as the ability to travel within the Schengen Area with no requirement for additional visas. After five years they are also able to apply for permanent residency.
“There could potentially be a slight dip in enquiries in the new year, but probably due to the lack of knowledge and understanding of what the exact changes are as opposed to the increase of the minimum investment.”
While Robinson believes that, overall, the scheme will remain popular, it could be the case that the other seven, less popular routes may pick up more traction from 2022.
“Capital investment has never been nearly as popular [as property], and even though it will also be subject to changes, I believe it will continue to grow but perhaps at a slower pace.
“Having said that, the golden visa has been offering non-EU high net worth individuals easy access into the Schengen spaces and a route to EU citizenship and will carry on doing so, therefore I strongly believe that it will still be remain attractive.”
