24 de March, 2023
The recent criticism of the President of Portugal, Marcelo Rebelo de Sousa, to the Mais Habitação program, caused the demand for the Golden Visa to skyrocket. At Atlantic Bridge there has been a significant increase in demand for the program in recent weeks, with this growth most evident in the last few days.
Investors have realized they have more legal security to make their investments now, as the President of the Republic has signaled that will not enact the bill in the terms currently defined.
At the same time, there is a strong intention declared by the Portuguese government to soon discontinue the Golden Visa program. Thus, the current scenario presents itself as an opportunity (perhaps the last chance) to obtain Portuguese residency and citizenship through investments in the country, being framed in the current legislation.
First of all, it is important to inform you that all administrative procedures for new Golden Visa applications are proceeding normally, protocols and payment of administrative fees. The current law remains in effect.
Second, it is important to explain that in Portugal, the President of the Republic is the Head of State, above the Prime Minister, is responsible for the promulgation of Portuguese laws and is the highest figure of the Portuguese State. In his public statement, the president says he considers unconstitutional the Mais Habitação bill that would include the determination of the end of the Golden Visa with effects for applications sent after February 16, i.e. with retroactivity. It should be reiterated that this bill has not yet been approved and does not have the force of law.
Nobody can say at this moment, with 100% certainty, what will happen with the discussion of the Mais Habitação bill. There is always some risk, however, there are some indications that lead us to draw the most probable future scenario. The following information is based on the Portuguese laws, the Golden Visa amendment history, and the opinion of industry experts.
There is a high probability that the Golden Visa program will be extinguished indefinitely, in all its modalities, even those not directly linked to housing issues. Which is curious, since the real estate speculation argument was used to start the discussion about the need for the Golden Visa to cease to exist.
Despite what was said in the Council of Ministers on February 16, that new applications for the Golden would not be accepted as of that date, experts feel that the measure hurts the constitutional rights of investors, especially with regard to the intended retroactivity of the law, as well as with regard to changing the legal requirements for the renewal of Golden Visas already obtained.
In this sense, it is understood that the proposal frontally harms the principle of the protection of confidence, as a deduction of the general principle of the Rule of Law, through a change in the law with past effects, frustrating legitimate expectations acquired by investors, based on the change of legal rules in force for investors who are already part of the Program, with clear prejudice to them.
Experts argue that if the Government does indeed go ahead with the extinction of the Golden Visa Program, the appropriate thing to do is to establish a transitional regime that ensures a reasonable timeframe for the investment and granting processes underway, as well as ensuring the stability of requirements for renewals, as was done previously when some legal changes were made to the Golden Visa Regime.
Historically, laws have included a time frame for them to take effect. To demonstrate this, one can take for example the changes that the Golden Visa Program itself underwent in 2022. At the time, the government gave investors a sufficient grace period before implementing the changes. So that those who had already made the investment could finalize their process.
Even if the Prime Minister has a majority in congress, and even if a bill along the lines announced can be passed, it must be remembered that the final word is the president’s. And we are talking about a constitutionalist who has already given signals that he will not allow the approval of a bill that is unconstitutional. Thus, it is expected that the bill will go through the Constitutional Court, which is responsible for assessing the constitutionality of what has been proposed.
Ultimately, in a very unlikely scenario, even if an unconstitutional law were to be passed, retroactively, it would hurt various constitutional principles. Investors would still be safeguarded by the right to go to court to demand their rights.
In this sense, the specialists point to the possibility of interested investors triggering mechanisms to review the unconstitutionality, requesting the annulment or nullity of the administrative acts that denied the legitimate claims of individuals, as well as claiming compensation from the Portuguese State for damages that have been caused by violation of rights and guarantees, under the broad terms that the Constitution of the Portuguese Republic expressly refers to.
The president of Madeira’s Regional Government, Miguel Albuquerque, has also declared his refusal to implement the measures of the Mais Habitação Program. In an interview with the Diário de Notícias newspaper, Albuquerque described these measures as “counterproductive,” “statesmanlike,” and almost “Venezuelan”.
The governor has expressed his opposition to the end of the Golden Visa Portugal program on several occasions. For the governor this would be especially harmful for Madeira, since the program is crucial for the region’s economy. He also states that some of the measures proposed by Mais Habitação violate private property rights, and made it clear that he will take a stand against them.
Atlantic Bridge will continue to follow the matter closely and will keep its customers informed of the next steps.