Is Portugal’s golden visa still a viable program after recent changes?

By Tiago Gali Macedo 

The recent changes implemented to the Portuguese Residency by Investment Program, or Portugal's Golden Visa Program as it’s known worldwide, will undoubtedly lead to a profound shift in the investment options commonly chosen by investors and applicants. 

First, they will need to get used to the new legal framework or name of the program, which is now called “Residence Permit for Entrepreneur Immigrants.” 

Second, and most importantly, the real estate investment option is no longer the leading investment category because it ceased to exist. 

It’s a matter of debate if, given the current housing crisis that the country is facing, such an extreme decision to eliminate the real estate investment options is beneficial for the country.  

However, that would take to another path that is not the subject or purpose of this article. 

The purpose here is to evaluate if the Portuguese Residence Permit for Entrepreneur Immigrants program continues to be a valuable option for those seeking a residency permit in Portugal, as a European Union country, and, eventually, to have a path to Portuguese citizenship. 

The short answer is, “Yes, it is!” 

INVESTMENT FUNDS AS A PORTUGUESE RBI ROUTE TO CONTINUE THRIVING 

“Real estate investment options are dead. Long live corporate investment funds!” 

Since the end of 2021, motivated by the implementation of limits to the real estate investment for housing in the country's interior regions and islands, the investment fund route gained huge popularity. Proof of that is from a total “universe” of 183 residency permits approved during September 2023; 50 were approved through investment in funds, and 99 of those permits were through investment in real estate, according to official data from the SEF (Immigration Borders Service). Also, it allows for reducing risk by diversifying the investment and the control done by the Portuguese securities exchange commission. 

Nonetheless, this trend had a particular increase during 2023; around 40% of all applications for residency permits for investment activity processed by our law firm were made through investing in funds. 

In addition, such fund investments were very popular for investors mainly from the United States (U.S.) United Kingdom (UK), Turkey, South Africa, Vietnam, and the Middle East. 

Therefore, it’s possible to conclude that the “market” and investors were already anticipating changes in the Portuguese law regarding the golden visa program. They chose to start conducting their investments through funds instead of real estate. 

Thus, it’s possible to affirm that the Residence Permit for Entrepreneur Immigrants program will thrive through the investment in funds. 

Furthermore, with the real estate investment options “out of the picture” and due to the increase of the minimum investment amounts in specific citizenship by investment (CBI) programs, such as St. Kitts and Nevis, many other programs in the Caribbean region could follow, so we firmly believe investors will also start considering the cultural investment route in Portugal as a viable option. 

CULTURAL INVESTMENT OPTION GAINS TRACTION AS PORTUGUESE REAL ESTATE GOLDEN VISA ENDS 

Although it may be mainly seen as a donation to a public entity to conduct investment in the artistic production, recovery, or maintenance of the national cultural patrimony, since it has a minimum investment amount of 200,000,00 euros, it is globally one of the most competitive and budget solutions for an investor who seeks to obtain a residency permit in Portugal, which is a European Union country and, eventually, to have a path to Portuguese citizenship. 

Even if the possibility of obtaining a return on the investment under the cultural investment route is very challenging, although not impossible, especially under the current status of the international economy and high interest rates, it is very different for an investor to invest 500,000 euros in an investment fund and lock them for five or six years, or instead invest 200,000 euros in cultural activities and guarantee their residency permit in Portugal and path to Portuguese citizenship. 

Also, just by the fact that, for the moment, there are very few investment solutions or products available in the market for this kind of investment route in cultural activities, all of them with no return on the investment or, at least, minimal; it doesn’t mean that within one or two years, the market will not evolve and get creative enough for coming out with possible investment solutions with some financial return for its investors.  

Proof of this aspect is that most of the real estate investment solutions or products that made the Portuguese golden visa program one of the most popular worldwide did not exist during the first three years of the program. Thus, it is always possible for the markets, entities, and investors to get creative and develop interesting investment solutions or possibilities with returns for investors. 

Furthermore, as previously stated, the option of investing in culture has garnered significant attention compared with investment options provided/offered by specific CBI programs in Caribbean countries; by almost the same investment amount or donation, they provide less value when compared with the possibility of obtaining a residency permit in Portugal and, eventually, a path to Portuguese citizenship. 

THREE OTHER INVESTMENT ALTERNATIVES ARE AVAILABLE FOR INVESTORS SEEKING PORTUGUESE RESIDENCY 

Besides the investment options mentioned above, under Portuguese law, there are three more investment routes/options for investors to obtain a Residence Permit for the Entrepreneur Immigrants program, such as job creation; the investment of 500,000 euros for research in universities, or investing 500,000 euros in share capital for a new company; or increasing share capital on an existing company in Portugal with the creation or maintenance of jobs.  

Although all five investment options have a limitation that any investment activity conducted cannot be connected directly or indirectly with real estate, there are plenty of suitable investment options available, within the law and in the market, for a foreign investor to choose from or make an investment that allows to apply and obtain a residency permit in Portugal without purchasing real estate.  

In conclusion, changes in RBI programs or, in this case, investment categories are part of society and life within the countries that benefit from such programs. However, based on the experience obtained this year with the increasing investment in funds and growing interest in other options, the final answer to whether Portugal is still a viable program after the new changes is yes. It is a viable option and remains one of the best RBI programs in the world.  

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