By Anayat Durrani
Known as one of the most popular residency by investment programs in the world, Portugal’s Golden Visa program remains a popular choice for investors who want to make Portugal’s sea, sun and sand their second home. It is increasingly a top choice for many Americans.
Since the program launched in October 2012, Portugal has granted more than 10,000 applicants their Golden Visas and an additional 18,068 dependents, as of July 2022, for some $6 billion in investments.
The total number of residence permits granted through the Golden Visa Program in July 2022 alone were 80 in total—11 of the investors were from the U.S.; 10 Chinese; 9 from Brazil; 7 from South Africa; and 5 from Turkey, says Diogo Capela, partner at Lamares, Capela & Associados in Lisbon.
Capela says in the same period last year, July 2021, 41 residence permits were granted through the Golden Visa Program and 10 of the investors were Chinese, 5 from the U.S., 5 Russian, 4 Brazilian, and 3 Turkish.
“As we can confirm, in recent years, the top countries most represented in the month of July have always been the U.S., China, Brazil and Turkey,” says Capela. “This is actually in line with the overall statistics and looking at the total number of residence permits obtained from the start of the Program in 2012 to the present time.”
The impact of the surge in interest of Portugal’s Golden Visa
The popularity of the program has spurred an increase in tourism and real estate in the country.
Apart from its mild climate and beautiful location, the country offers a favorable tax regime and free travel within the European Schengen visa zone and visa-free access to 188 countries in total. Golden Visa holders can apply for citizenship or permanent residency in Portugal after five years, leading to a passport, which allows them to live, work and study anywhere within the European Union.
Sara Sousa Rebolo, lawyer and partner at Caiado Guerreiro in Lisbon, says the recent numbers are able to demonstrate a trend that the market players have witnessed since 2020, which is an increase of American investors and the decrease of Asian investors in general, mostly due to COVID restrictions.
“If we look into the big data, considering the statistics since 2012, Americans continue in the top 5, being the 5th most common origin country as Golden Visa applicants,” says Sousa Rebolo.
How the trends compare to previous years, Sousa Rebolo says, is that they confirm a trend in terms of origin country as well as the reasons that lead the applicants to apply for the Golden Visa.
“Security, mobility, quality of life, investment opportunities, the perspective of a European passport for the family, social peace and above all, respect and equal treatment regardless of ancestry, sex, race, language, territory of origin, religion, political or ideological convictions, education or sexual orientation,” says Sousa Rebolo.
Impact of new requirements on Portugal’s Golden Visa
Sousa Rebolo says due to the discrepancy with the official statistics compared to current investment data, “it is difficult to have a correct perception of the impact that the geographical restrictions imposed on real estate investment already have.”
However, she did note a few trends such as an increase of apartments and villas legally classified as services or intended for tourism, which she says escapes the geographical restriction. She says there is also an increase in hotel projects as eligible investments starting at $280K as well as the option to choose a cheaper qualifying investment and purchase real estate outside the scope of the program.
Other trends she’s noticed include an increase of interest in interior areas, especially the islands, which end up being less flight hours from the U.S. and “an unprecedented valorization of certain areas such as Grandola, Alcácer do Sal, Odemira and Santiago do Cacém, but also the Alentejo region in general.”
Additional trends include a reduction of investors in investment funds in opposition to the growing offer of new funds with greater diversity in the areas and investment activities as well as more interest is knowing about the other options of investment available, such as cultural, corporate and technological.
“According to what has been my experience, most clients still prefer to invest in the real estate sector, and continue to do so in residential properties, but currently choose low populated areas to do it,” says Capela.
He says clients have been interested in finding good areas to invest in outside the urban centers, such as ready-to-move-in properties or others that need rehabilitation.
“I have also felt a growing interest from investors in acquiring participation units in investment funds and we believe that in a year's time, the statistics will reflect this growing interest as well,” says Capela.
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