Portugal’s Golden Visa updates

The regulatory changes to the Golden Visa program, which came into force in October 2018, are designed to simplify visa applications and permanent residence permits in Portugal.

Looking at the numbers, in accumulated terms since October 2012, the foreign investment programs in Portugal have captured a total investment of 3,921,411,271.37 euros. At the time, it was an interesting strategy to circumvent the crisis in the country by encouraging the flow of foreign capital into Portugal. However, the first 7 months of this year saw a drop of 22.2% in investment raised compared to the same period in 2017. The publication of this new regulatory decree is to simplify and make the processes more flexible, while trying to get around this break in investment by making the following changes:

Simplification of processes

The new rules foresee that the processes will be presented in digital form, whenever possible, thus avoiding mandatory presence at the consulate. The renewal of residence permits in SEF (Foreigners and Borders Services) can now be made in any regional delegation, in addition the institution will use the documents already held on file, instead of re-requesting them from the applicants.

Permanent residence, without minimum periods of stay in the country

The first holders of the Golden Visa are currently ending the 5-year minimum time period for permanent residence concession: “with the recent change in the law enabling applicants to request citizenship after five years of residency, we are now starting to have the first Golden Visa residents applying for citizenship”, mentions João Cunha Vaz (EDGE International Lawyers). In light of the new Law on Foreigners, a residence permit will be granted to all holders who maintain the investment in Portugal, and the minimum requirement of two months in the country will not be applied: "The regulatory decree exempts [the rule of permanence of two months], disregarding the minimum stay requirements in Portugal. "¹

Participation in venture capital funds

Amendment of the Decree Law on investment in private equity funds, which relies on the need for a "statement issued by the management company of the respective investment fund attesting the viability of the capitalization plan, maturity of at least five years, and the application of at least 60% of the investment in commercial companies based in the national territory."²

Transfer of Capital and Creation of company

It is necessary to invest a minimum of 350,000 euros to create a commercial company in Portugal with at least 5 permanent jobs or increase the share capital of a commercial company based in Portugal (company capitalization).

Capital transfer of €350,000 (minimum) to promote research activities.

Transfer of capital of a minimum of €250,000 for investment / support to the arts and recovery of cultural heritage.

Change in type of investment

Another change in the law is the possibility of "changing the type of investment" ¹, and the holder of a residence permit for investment activity (ARI) to be able to transfer the capital, for example, from a capital fund to the acquisition of a property, provided that the investment value is not lower.

Investment in real estate

The request for a residence permit is dependent on proof of real estate investments already made or the presentation of a promissory contract, with a minimum value deposit or higher than the investment imposed by law. In addition, a statement from the creditor institution, if applicable, confirming the actual transfer of deposit.

If the investment has been made in properties built more than 30 years ago (for renovation) and that are located in an urban rehabilitation area, an investment of € 350,000 will be required as a requirement for a permanent residence permit application.

Only the proof of request for prior communication (comunicação prévia) on urban renewal, application for a permit or maintenance contract for the rehabilitation is required.

With this new regulation, permanent residence permits are granted in Portugal in exchange for investments made in the country. Laws are amended as regards the transfer of capital for start-ups and the types of investment to apply for citizenship. This simplifies all the processes so that the investment remains constant and intensifies again. However, the granting of Golden Visas through the acquisition of real estate continues to be the preferred option, being much higher than other forms of investment (6,064 real estate, 341 capital transfer, 11 creation of a company). If the purchase of housing is also the most feasible choice for you, the Western Algarve is still an excellent investment option. Contact Casas do Barlavento now to see our portfolio.

¹ The lawyer José Miguel Albuquerque (PLMJ) explains to Lusa agency.

² Regulatory Decree No. 9/2018 of September 11