16 de March, 2022
This year marks the 10th anniversary of the Portuguese Golden Visa. Through it, thousands of families could realize the dream of living and investing in Portugal, enjoying greater financial freedom and quality of life. The Golden Visa Portugal is currently one of the most desired in Europe. It has relatively low minimum investment amounts, allows applicants to live and work in Portugal, has attractive family reunion guidelines, among other advantages. In this article we will learn a little more about the history and evolution of the programme and what benefits it has been offering investors and the country.
Portugal’s Golden Visa programme was created in 2012 with the aim of attracting foreign capital and boosting the country’s economy. It is actually a residence permit for investment activities (ARI) in exchange for a qualified investment in Portugal for a period of 5 years. It is aimed at non-EU/EEA citizens who wish to obtain Portuguese citizenship or permanent residence.
The Portugal Golden Visa is the only one where the investor only has to spend around seven days a year in the country to maintain residency. He will still be able to reap all the benefits of being an EU resident – including visa-free travel throughout the Schengen area. After this minimum investment period, he can also apply for their citizenship if he meets all the legal requirements. Furthermore, the benefits are extendable to the family members of the investment holder.
Most Golden Visas were issued to Chinese citizens (although their proportion has been decreasing recently). They are followed by Brazilian, Turkish, South African and Russian citizens. In recent years, the Gold Visa has also been extremely popular among US citizens, with the US even taking first place in November 2021. In 2020, a total of 75 ARI were granted to Americans. In 2021, that number rose to 101. And now in 2022, in just two months, 38 ARIs have already been granted to applicants from the United States.
If in the first two years of the programme 496 Investment Residence Permits (ARI) were granted, in ten years this number has grown 21 times. In cumulative terms, 10,442 gold visas have already been granted in Portugal.
In the early stages of the programme, property investment was the option chosen by almost all applicants. In 2013, it accounted for 94% of the Residence Permits granted. Portugal has a very solid and simple legal regime of land registration. In addition, property prices were considerably low in 2012, especially when compared to other destinations in Europe. Cities like Lisbon and Porto were the main targets of these investments, and the Golden Visa programme was a key factor to boost their urban rehabilitation.
Over the years, the search for property in these cities has led to a sharp rise in the market, especially in three regions: Lisbon, Porto and the Algarve. To encourage investment in the interior of the country, the government decided to restrict the possibility of real estate investment aimed at housing to the interior of mainland Portugal and the islands of Madeira and the Azores.
The Golden Visa has also contributed to promoting the revitalisation of cities. In these almost 10 years of existence, 1,131 investments have been made in properties whose construction has been concluded at least 30 years ago or located in urban rehabilitation areas. These are real estate assets that have been renovated.
Although investment in real estate remains the preferred option, investment in investment funds is also becoming a sought-after alternative. It represented 9% of the ARI granted in 2021, more than double the previous year. And it reached a percentage of 15% of the investments made in January 2022 and 25% of those in February! This is because, with the pandemic, remote applications have increased. In addition, many investors prefer to invest in a financial product rather than own a physical asset in Portugal that may incur more expenses and require regular maintenance.
After almost 10 years of a successful programme, the government decided to increase the minimum threshold of certain eligible investment activities and to limit the areas where real estate investment can be executed. As such, two major investment activities have been affected by these changes:
These were not the only legal changes approved for Portugal’s Golden Visa Scheme in 2022. Find out all the details here.
In many ways, the Golden Visa programme has been a good indicator of how investors assess the country. Especially how securely they can hold their investment for the minimum required period of 5 years, as well as ensuring that such investments are able to generate returns.
At the moment, Portugal presents a stable and regulated environment, providing the necessary comfort to make the decision to apply for the Golden Visa in the country. According to data released by SEF (Foreigners and Borders Services) so far, the programme has already benefited over 10 thousand foreign investors. It has also been positive for the Portuguese economy. Since 2012, total investment in Portugal as a direct result of the programme has reached over six billion euros. Consequently, it has created indirect jobs and a huge stimulus in various areas of the business sector.
This is great news for potential investors, as the programme has broad support from almost all political parties in Portugal. While a conservative government introduced the programme in 2012, the current socialist coalition government has even expanded the programme since taking power in late 2015.
Sometimes the initial motivation for making the investment is not financial. In a rapidly changing world like the one we live in, the option to provide oneself, one’s family and future generations with the possibility to move to a traditionally stable country and, in addition, to access the Schengen territory, is increasingly seen as a strategic and security move.
The Covid 19 pandemic brought with it a period of many uncertainties and economic downturn. Now, despite the changes recently imposed by the Portuguese Government, the trend is that the Portugal Golden Visa programme will grow again, generating a virtuous cycle of development for Portugal.
The data presented in the first month of January this year show that the popularity of the programme in Portugal remains. 188 Gold Visas were granted in January and February, and 23% of them refer to capital transfers, such as investments in funds. A good sign for those who want to bet on Portugal in the next 5 years.