Salman: Welcome to the "Investment Immigration" podcast by uglobal.com with weekly in-depth interviews with the world's leading investment immigration professionals. Welcome to the "Investment Immigration" podcast brought to you by uglobal.com. I'm your host, Salman Siddiqui and my guest today is Jordi Vilanova. He's the president of Mercan Properties in Portugal. And today we are going to talk about Portugal's investment immigration program. Welcome to the show, Jordi.

Jordi: Hi. Thank you for having me.

Salman: Glad to have you on the show. And we are going to talk about Portugal and you have extensive experience there. So, let's start with you in a few words, if you could just tell me and our listeners about yourself and how you ended up in the investment immigration sector.

Jordi: Yes, thank you. So, I was born in Barcelona, but then in 1979, I met Jerry Morgan, who's the founder of the American Group in Canada. And in the early '80s, I moved to Canada actually in 1984. That's where my wife is from, and that would be in spending there back and forth between Canada and Spain. And in the late '80s, I was responsible for NEC, which is a Japanese computer manufacturer, responsible for the development of the Spanish and the Portuguese market. That's when I got the taste already and the experience to work in the Portuguese market. Then in the '90s, I was involved with different private equity investments. And in 2008, it's when I joined Mercan basically to support the expansion on the Canadian program as well as on the EB-5 program. And it was in 2015 with Gerry that we decided to come to Portugal. And actually, when we came to Portugal, we were pioneers because we brought to Portugal the business model that we had on EB-5. And also we were pioneers in Portugal because we're the first ones to invest into real estate rehabilitation. And finally, we're also pioneers in Portugal because we established we brought the model that we had for EB-5, which was the buy-back model.

Salman: Great. So, we are going to talk more about your company later on in the show, and that's a great intro about your whole background and how you shifted towards investing in immigration sector. But let's now dive into how things are working in Portugal right now. You're now based in Portugal, and it's a country which has been quite popular with global visa [SP] investors. But in your words, I would like to hear why should the high net worth individuals choose Portugal over other countries that provide similar investment immigration options in Europe? I mean, what's so special about the space, in your opinion?

Jordi: There are a number of reasons why this is so special. In addition to being in Europe, of course, in the European Union. And the first one and doubtfully today is safety. So, Portugal is ranked number three as the third safest country in the world. The two first ones being Scandinavian countries. The second reason also is free health care. So, from many countries in the world, that's really very appreciated. And, of course, if you have a family, this is third reason why Portugal is so appealing, which is free education, high-quality education, not only primary school and secondary school but very good universities. There are other elements which are also relevant. The fourth one I would mention English is widely spoken, is probably one of the European countries where English is widely spoken. And the fifth one, we should not forget taxes. So, Portugal has a special program where as a foreigner, you can have a tax regime with a maximum cap of 20%. And, of course, I cannot finish the features of Portugal without talking about the beauty on the diversity of this country and the people themselves.

Salman: There is no doubt Portugal is one of the most beautiful countries on earth. So, thank you so much for sharing that. But I would like to know more about the trends you're seeing in Portugal. So, could you share with us about the investment immigration trends a little bit like where are the investors coming from mostly in Portugal? I read a recent Bloomberg report which suggested that Americans were now the top nationality for Portugal's golden visa program. And I think it was also China on the list, very high in the list. Are you also seeing the same trend?

Jordi: Yes, that's a very important component. And what's also very interesting is how this trend has changed during the past years and how do we see this also changing in the future. So, Americans definitely two or three years ago, they were not on the top of the list at all. So, it's always a combination of internal factors and how attractive is Portugal. That's why now we see the U.S. as being on the top. Of course, other countries that are now on the top, like India, which is more related to the appetite and to the appeal of Portugal, as opposed to other programs where India in the past was more focused. And of course, there are nationalities that have always been in the top and they continue to be in the top, like South Africa.

Salman: Oh, I see.

Jordi: And, of course, the Middle East, it depends very much. So, we have some countries from the Middle East that depending on the situation over there, might be more attracted or less attracted. But the fact of the matter is that U.S. yes at the top. Yes, India at the top, and then China.

Salman: So Americans are coming to Portugal more. This you're saying is a recent trend. This was not say happening five years ago, ten years ago. Is that what you're saying?

Jordi: That's correct. And then it all comes down to the reasons that I explained before, which is about safety, which about health care, which is about free education. And, of course, during the pandemic, the fact that you would be able to have a European residency or a European passport, this allows you to travel freely, which obviously during the pandemic, this became an enhanced feature.

Salman: That's really interesting that things have changed for the Americans and it was not like that few years back. But if you today wanted to speak to a potential American investor client, what would you say to them? What would be your number one sales pitch to them and why should they choose Portugal?

Jordi: I think there are three reasons why they should choose Portugal. The first one is related to safety. This is a very safe country and therefore, wherever you stay, wherever you settle in Portugal, regardless of whether you come from in the U.S., you'll always feel at home, you'll always feel safe. The second reason, especially in the current context of the health care costs and situation, Portugal offers a very high-quality healthcare services. And the third one is the quality of life. The quality of life in terms of whether you stay in Lisbon, you stay in Porto, or you stay outside these two main cities in the south or in the north, the weather conditions, the lifestyle, the access to all the things that you would have in the U.S., you have them here, whether it's culture, whether it's education, whether it's entertainment. So, those are the three reasons that I think for an American would be very interesting that Portugal's interesting.

Salman: These are all very important points and especially health care where in the U.S. has become so expensive. But can they immediately get those health benefits in Portugal as soon as they apply for the golden visa? How does it work?

Jordi: No, it's not as soon as you apply for the golden visa. So basically, it's once you have the golden visa and if you fulfill certain requirements, you'll have access to these free health care.

Salman: Right. So, once their applications have been approved, they're in the country and the process has been completed. That's when they can avail all these benefits. So, you were also mentioning just prior to that a little bit about China. So, let's go in a little deep into that. I've heard that the number of golden visa investors from China is actually going down. Is this what you're also seeing? Is there anything the Portuguese government maybe could do to reverse this trend? Like, for example, would it help Chinese investors if the government in Portugal abolished the in-person interview? I've heard that's a big hurdle for most people during the pandemic happen. It's not easy to travel. So, what are you seeing?

Jordi: It's very interesting because there are three questions that basically you raised there. The first one, the other statistics. And of course, the statistics that we have now are mainly related to files who have been approved, which means that especially during the pandemic, Chinese files were kind of slowing down because they knew they were not able to travel. Now, if we look at the current demand of applications, China's back in the top. In the past three months, China is back in the top, especially since the lockdown in Shanghai, we have seen a big demand of Chinese for the golden visa program. So, the trend definitely has been reverted. Now, another interesting point that you raised was about the interview. There's two things there. First of all, in more than the concept of interview, like for other programs, here there's no interview. It's a biometric. So, it just the biometrics. There's no question and answer session, just the biometrics. Now, the other thing is that we have to remember that for the golden visa, you need to spend seven days per year in the country. So, whether it's for the biometrics or for complying for the program, you still need to come over here. And yes, that's a challenge for Chinese and not only for Chinese but also other geographies where especially during the pandemic. And still, we're not there yet. There's no easy movement coming to Portugal.

Salman: Right. And you mentioned about the biometrics that all applicants have to basically give their biometrics to complete the process. Can the biometrics be done at the embassies in the home countries of applicants? Could you share a little bit about that?

Jordi: Not at the moment, although we are discussing with the government because there's no question that at least the initial biometrics they need to happen because here we're talking about two different things. One are the biometrics at the application stage, whether this could happen at the embassy. Well, I'm not sure that the government will accept that. One of the reasons is because in any case, they have to come to Portugal seven days per year. Now, a different question the biometrics at renewal because, yes, we have a dialog with the government that maybe these biometrics at renewal, they should be thought in a different way. Having said that, with the Portuguese government, yes, we're having a very good dialog, but it does not mean that decisions will be taken shortly on that matter.

Salman: I see. So, if that happens, it would be great for the investors, and fingers crossed for that. I think it would help a lot of people, not just the Chinese investors, but people from different countries as well. Okay. Now let's move on to the recent changes which have happened in the Portugal's golden visa program. So, for our listeners who might not know this. But the government in Portugal recently decided to stop the option to buy properties in the main cities like Lisbon and Porto from the start of this year. And Jordi, since this change that has happened, are you hearing any complaints from your clients that, "Hey, I still want to buy properties in Lisbon?" I mean, how do you handle that? And also how do you convince them that there are advantages of investing in other areas in Portugal?

Jordi: Yeah, that's a very interesting concept. The thing is that with our experience of over 30 years in this activity, what we have seen is that the Portuguese government has probably looked at previous experiences in Canada and in the U.S. on how to modulate the program. And one of the things that we've seen in Canada is that cities like Vancouver or Toronto in terms of residential real estate, there has been changes in terms of facilitating that the locals are able to invest into residential real estate, which has been the major issue also here in Portugal that the properties in Porto or in Lisbon, they would just have yes, obviously the access to these properties by foreigners was probably becoming easier than for the locals. So that's one thing.

The other thing that the Portuguese government and this is probably very much if we look at the previous programs like EB-5, the economy creation, the job creation component. So, the Portuguese government basically has focused on investments in Porto and in Lisbon that they might bring more economic value to those areas like commercial, like hotels, like manufacturing, like offices and of course residential outside the main cities. There's no question that they provide also economic value, economic development into areas that are less populated. So, yes, of course, there investors that might be complaining. But the fact of the matter is that for us, it's no surprise that the government in an immigration program like this is also looking at the economic value that the program brings.

Salman: That's right. But how do you convince an investor who hasn't heard a name of a city or some area or region in Portugal ever? For example, an American investor might maybe say, be more familiar with Lisbon than some other part of the country. Then what would you say to them? Like, hey, this is a good value for money?

Jordi: Yeah so basically an investor in our experience they look at two things. They look at how can they get the golden visa and what is the investment requirement for that. Now, what they realize is that if you want to invest in Porto or in Lisbon, you might as well invest into a commercial property, eventually rehabilitation. So, you invest 350,000 euros or 280,000 euros. In the meantime, while you are progressing in your golden visa, if your intention is actually to invest into residential in Portugal, this also gives you the opportunity to come here and check by yourself areas where you would like to do your investment into real estate regardless of the investment that you already have done for the golden visa.

So that you make sure that the investment that you have made for the golden visa is qualified. You've done it with a developer that has lots of experience on that, so you don't worry about the money that you have there for the golden visa. And then if in addition to that, you wanna look at other areas. So you look at two different ways of investing. If you want a golden visa, maybe, and you feel comfortable with Porto and Lisbon, you should probably look at the commercial investments in Porto and Lisbon. If you're not sure residential outside those cities is for you, then yes, you'll have to spend time over there to check out the residential.

Salman: Right. And this perception that Lisbon and Porto is now out of bounds for global investors, is that correct completely? Or are there still options, say, on the suburbs of Lisbon and Porto or nearby where they can still have opportunities to put their money in?

Jordi: Yes, the good thing about Porto and Lisbon is that as any other European city, we have what we call the different rings, real estate rings and the impact of the current economic situation whether is the interest rates or whether is the current investment appetite has a different impact on the different rings. And this is not unique to Lisbon and Porto. It can be for any other European city, for that matter. So, if you're asking me in the center of Lisbon, in the center of Porto, yes, today is probably more challenging, but there's still different rings around Lisbon or around Porto that you might have good opportunities.

Salman: That's good to hear. And I'm sure a lot of investors would be delighted to hear that because it's always good to have some options on the table. Let's move to the investment immigration projects that your company is involved in Portugal. It seems to me, and correct me if I'm wrong, that Mercan Properties is for now focused on hotels. So, how did your company end up focusing on the hotel sector in Portugal given that there were several other options available like, you could have gone into just residential villas or apartments? What is the strategy here?

Jordi: Yes, there are two reasons why we did that. One is because the experience we had in the U.S. where we have done a number of properties for EB-5 investors, so we know what the hotel business is all about. And the second reason, which is kind of related to the immigration world, is that we have always believed in our experience that this is one of the safest investments for someone who's looking for immigration. It is our experience that someone that is looking for immigration, generally speaking, they wanna have a safe investment, and mainly they are looking at getting their money back and eventually with some returns. So, this is the reason why we focused in hotels. Of course, when we talk about our experience, we must say that our partnerships with the top brands of like Marriott, Hilton, Intercontinental, and Wyndham, it's definitely something that was very useful for us when we started here in Portugal developing hotels.

Salman: So, expanding on that. How many projects do you have in Portugal? And could you just mention the areas, the regions in Portugal where those projects are being held?

Jordi: Yes, so today we have 18 projects. We have five hotels which are already opened four in Porto. One in the Douro region. We also have in total out of the 18, 10 which are in the Porto area. Then we have three which are in the Lisbon area. Then we have two, which are in the area of Evora in what we call Alentejo in the eastern part of Portugal. And then we have three down in the Algarve, so a total of 18. What's also relevant is that out of these properties six, we have a partnership with Marriott, six we have a partnership with Hilton, three, we have a partnership with IAG Intercontinental and then three with Wyndham.

So that's our business model. It's very important, these partnerships because as we have learned back also in the U.S., it provides comfort to the investors because the business plan of each one of these properties is validated by these partners who obviously are very experienced in the hospitality world. And also one of the reasons why this business plan is well supported and is a solid business plan is because these brands, they bring a very high percentage of their reservations into each one of the properties.

Salman: That's true. And these are big names, well-known names that any investor around the world would know of so that's pretty great. But what requirements would an investor need to fulfill to get a golden visa? Why investment in hotels? And how would your company facilitate them?

Jordi: So, the Mercan group here in Portugal, we have developer site, which is Mercan Properties, and then we have an exclusive partnership with a legal services provider which specializes in golden visa and citizenship processes. And then there's a third pillar, which is the hotel management company, that ensures that the revenues are well generated in each one of the hotels. The reason why I'm explaining that is because it's very important when an investor looks at one of our properties that they see a full integration of services and a full integration of accountability and trust. So, when an investor is looking at the golden visa, they are basically two different things they are looking at, which is what type of investment and what is the golden visa process.

And those are two parallel tracks. That's why, in our experience, the fact that we support them on both tracks makes a unique experience for them because an investor will choose one of our projects. And then once the project is chosen, then he will start the golden visa application by the specialized golden visa team. Then this means that the investor has a keen interest in making sure that their process is handled on the most efficient way, which means that it's very important for these legal services provider to work exclusively for us as a developer because the only files they'll be dealing with are related to this developer. And we have a keen interest to make sure that the application is managed in the most efficient way that the renewals are managed in the most efficient way, and they get into the citizenship process in the most efficient way.

Salman: Right. So, if an investor wants to get in touch with you, how do they do that? Do they have to come to the country and then they can choose the projects or they can just go to the website? We could also talk about that.

Jordi: Yes, actually, this is a very important point because the investor does not have to come to Portugal to make a decision to start the process. The investment can be done by giving a power of attorney to the lawyer. So, the lawyer basically will do three things. One, which is open the bank account and of course, having obtained the tax number. The second thing the lawyer will do is on behalf of the investor, once the money is in the bank account, they'll do the purchase. And the first thing the lawyer will do will be to submit the application, which means that the investor only has to come when they have an appointment for the biometrics, which is probably three, four months after the application has been submitted.

Salman: Right. That was an important point, that you don't have to come to the country to initiate all of that, which is very helpful. But what would you say to an investor who is a risk-averse investor, who doesn't like to take any kind of risk, and I'm thinking about why would an investor choose to invest in a hotel, especially, during the pandemic, which still is around. We don't know when it's going away completely, but how would you convince a certain risk-averse investor to invest in the hotel sector in Portugal? And what kind of outlook would you give to such a person?

Jordi: Yes, you know, if you would have asked me the question three months ago, it probably very different from what I'm gonna say now. We just received the statistics on occupation in Porto and in Lisbon, which are over 2019. So, we're not waiting till 2023 like some forecast was mentioning. But already July 2022, the occupation has been higher than in 2019, which was the best year ever. So, this answers one part of the concern. There's another part of the concern which is not necessarily related to COVID, which is about how many hotels. What about the infrastructure here in Portugal? How much investment can we have here? Part of the answer came from the conversation we had before. Why do Americans, that two years ago they were not looking at Portugal all of a sudden, now they are looking at Portugal? Why Indians, that two or three years ago they were not in the top ranking either. Now they are looking at Portugal. And of course, the Chinese, they've always been in the top rank.

What we can say is that compared to other European countries, we haven't had yet the infrastructure, especially the flights that will enable to have this demand for people from Asia and North America to come to Portugal. Portugal, basically, the whole tourist infrastructure, especially the travel infrastructure in the past 15 years has been developed around the European airlines, the European low-cost airlines. That's why here today, still, most of the occupation comes from the Europeans. However, we see a very fast development, which already started in 2018, '19. But because of COVID, it's been postponed. But we are already seeing the major international Asian airlines coming to Portugal. And, of course, the major international North American Airlines coming to Portugal.

Salman: And you see a very bright future for Portugal's investment immigration sector and especially the hotels sector for who I was interested in investing. Is that how you see for the next, say, five years down the line?

Jordi: Yes, because also this is very much related to the current government status, which is a majority government that will be here for the next four years. And also, this is very much supported by the international brands, which keep supporting more developments here in this country. And, of course, the government is also keen to further invest into new airports. So, there is a new airport in Lisbon that will be announced very, very shortly. The airport in the south in Algarve also is receiving major investments. The fast trains that are also scheduled to happen in the coming years. So, yes, we think that this is a good overview for the future of the tourism here in Portugal.

Salman: It's really interesting that you mention about all these infrastructure developments that are taking place in the country and how it overall impacts the investment migration industry and how it supports all of the stakeholders. So that's a really important point and something which global investors I'm sure would be keenly looking into. So thanks for bringing that up. But let's talk also a little bit of the challenges you faced during the pandemic. And if you could share with our listeners about how this whole pandemic era affected, did not affect your business? And what did you do to meet those challenges that came with the pandemic? And how did you rise up to the occasion?

Jordi: Well, there were two sides of the coin. Like for many businesses. The positive side of the coin is in terms of investors because as I mentioned before, you don't have to come to the country to do your investment and start your application. So, at that time, we had an offering that would enable investors to do that. So, we were able to meet the demand of investors looking for golden visa. The other side of the coin, in terms of our hotels development, on one hand, although it is true that it's one of the few countries that the construction sector did not stop activity, it's also true that the supply chain for many of the materials for the construction was on a very, very slow pace.

So, yes, we suffered from that. That's number one. Number two, with some delays in construction, but we are catching up in most of the cases. The second thing is that although we should have had some hotels opened especially in the last half of the pandemic, it is true that we were not affected at the beginning of the pandemic because there were no hotels yet opened. And it is true, yes, in the past six months of the pandemic, we...like the whole hospitality industry here in Portugal and in many, many other countries we had to just hold it till the tourism industry would ramp up again.

Salman: Right. And then what did you do to meet those challenges? Did you have to change your business plan? Did you have to come up with more online dealings with your clients to get the projects running? How did you have to change as a company, as a business?

Jordi: So, as a business under two areas on the construction site, basically we learned how to identify other supply sources that would enable our hotels to continue to rebuild. On the investor side, what became very interesting, it was the whole virtual experience. So, the trust that we have built over many, many years, which was mainly related to our visits, our seminars, our present activity, investors, and agents coming to Portugal. So because agents was and it is our key part on the business model, which is how investors would get into our projects through the agents around the world. So, the agents were regularly coming. Every time there would be a new project, they would come here, they would look at that, they would do the due diligence. And now during COVID, this was not happening. So, we designed all the tools, all the virtual tools whether it's Zoom or films to make sure that we could compensate for this lack of investors and agents coming over here.

Salman: There was a positive then because of the pandemic you had to develop these new tools to get more investors. So that is a big positive that is happening around the world. And I'm glad to hear that's also how you adapted. I mean, it makes you wonder that why did this happen, say, ten years ago, technology was there, but nobody had that push maybe to go down that road. I mean, correct me if I'm wrong.

Jordi: It just triggered the need to use these tools, right?

Salman: Right, because initially we all thought that maybe it's not needed, but post-pandemic world that we are living in, it just makes so much sense. And life has also been made easier because of that. So it's great. I wanna talk about a certain contentious issue. I've heard a lot of criticism about what's happening at the application delays at the immigration authority, the SEF. You read about a lot of stuff. If you could just tell me about how's the situation of the backlog of applications at the SEF these days and how are you dealing with the situation and what would you advise to investors who are looking for quick results basically for their golden visa applications?

Jordi: Yes, that's very important and I think that's very relevant for whoever is interested in an immigration program. And there's two different things that we have learned. One of the things that are related to a particular event or a particular situation and the other one is related to the immigration programs themselves in general. So, the first one about Portugal, unfortunately, there was no government for a number of months. So, sometimes people say, "Well, why did the government block or close the SEF?" Well, unfortunately, the government didn't do that because there was no government. So, unfortunately, that was the reason there was no government and decision-making was not happening. What we know now is that we had major events on June 24th, on June 30th, and on July 1st.

On June 24th, all the files that had not been submitted since January 1st were submitted. The portal was opened. On June 30th, all the renewals that we're looking for an appointment got an appointment or the majority of them. And on July 1st, all the applicants that they were looking for an appointment, the first staff appointment for the biometrics that had been submitted prior to September 30th, 2021, they also got an appointment. So, then the month of June, basically the whole backlog in terms of getting appointments was cleared. So now, we are seeing all... Of course, August is not the best month, but we are seeing all the appointments happening and we believe that the backlog has been basically released.

Now, going into the migration program component. If we look at what the immigration programs of Canada, of the U.S. like EB-5, so the actual situations with the programs which cause delays. So, the EB-5 program 15 years ago or 10 years ago had a different timeline that five years ago. The Canadian program, exactly the same. And is this related to the government that they are more or less keen with the program? Not necessarily. It has a lot to do with the administration and with the structure of the administrative work. And it's a matter of fact that in the case of the golden visa in Portugal, like any other immigration program, immigration is not about quick results. Immigration has its own pace. So that would be my recommendation to any investor that is looking at the Portuguese program. And for that matter, at any other program, if you're looking at an immigration program, there are no quick results. Generally speaking, if you...

Salman: That's an absolutely valid point. There are no... You can't give a definite timeline to a complex process like resettling or relocating to a country or making a new investment. But having said that, if I'm an investor coming to you now, it's today in 2022 would you be able to give me some sort of timeline that, okay, if I'm coming to you and you can probably get your golden visa application done within a year? What would you say to them?

Jordi: Being realistic, I would say that...and it depends also, it's not the same if it's one single applicant or a number of family members. It's difficult to give an estimate, but I would say definitely not less than one year, not less than one year, and probably today we're averaging about 16 months.

Salman: That's an important information so that people have an understanding of how to plan the investment so that they can move ahead also with their plans. Of course, we are living in a very delicate situation in the post-pandemic world. There are so many things which are interconnected like you mentioned. It's good to hear that they should not have unrealistic expectations. We are coming to an end to our podcast. So, I want to end on a very positive note and I want to hear from you. And I want to ask you in my final thoughts for this podcast is what would you say to investors living in any part of the world about why you think Portugal is the best destination for them? Let's give you 30 seconds to a minute to sell me that dream of Portugal.

Jordi: Three things. The first one is Portugal is one of the best countries in Europe to have a permanent living. Why Portugal is the preferred? As a summary from my conversation is because of safety, because of health care, because of education, and because of being a European country it's a safe place to do business. Now, the second reason why Portugal is so attractive is because the people of Portugal with their history, which is unrivaled in many parts of the world, and also their experience on dealing with international people, when Portugal itself has had a lot of people that left and now they are coming back. So that's also a reason why so many Portuguese are coming back because, again, they've been around the world and they realize that Portugal is probably the best place to be.

And the third thing is about the program itself. This is a very unique program, like any of the immigration programs. Yes, you will be here for a number of years, but there's always a window of opportunity. And in Europe, we don't see any other European program coming with the benefits that Portugal has today. So, those are the three reasons why I think Portugal is the place to be.

Salman: Fantastically summed up. Jordi. Thank you so much for sharing all those details about the Portugal Golden Visa Program, about your company, and of course, about yourself and your experiences and your challenges that you face in this very tricky time that we are going through. And I really appreciate you sharing your thoughts with us. Thank you so much, Jordi. I hope to hear more from you in the future.

Jordi: Excellent. Thank you very much.

Salman: You've been listening to the investment immigration podcast by uglobal.com. Join us again soon for more in-depth conversations exploring investment immigration opportunities from around the world.

Powered by Froala Editor