In November, several independent media outlets wrote a premature obituary for Portugal’s ‘Golden Visa’ program. They cannot be blamed, as there was a strong trigger for this coverage. On 2 November, Prime Minister of Portugal António Costa acknowledged to reporters that the government was reconsidering various immigration programs, including the golden visa. Less than a month later, his plan to make any changes to the golden visa system was thwarted by his own Socialist Party.
What is the Golden Visa of Portugal?
Golden Visa is an investment linked visa allotted to wealthy investors who make large scale financial investments. Investment amount €280,000 (approx. 2.4 crore) in real estate, €500,000 further in investment funds or €250,000 further in arts and culture.
The Golden Visa allows the investor and his immediate family members full residence rights in Portugal. While this means that Golden Visa investors can live, work and study in Portugal full-time, the minimum requirement to maintain residency is a stay of only seven days each year. After five years, Golden Visa holders are eligible to apply for permanent residency or citizenship of Portugal, at which time they can sell their original investment and reap financial benefits from the process. Portugal also allows for dual citizenship along with other tax benefits for Golden Visa investors.
What is the Golden Visa for Portugal granted for?
According to SEF data, since its inception in 2012, Portugal has granted its Golden Visa to 18,479 applicants, including their family members. Portugal has received €6.6 billion in direct investment over the past decade, and at least 220 jobs have been directly created by such investment. In addition, the economic activity associated with such direct investment would have benefited from the boom.
Is Portugal the only country that offers Golden Visa?
There are many countries around the world that offer different types of investment linked visas. In the US, EB-5 is an example of an investment-linked visa, where investors are required to invest a minimum of $800,000 and meet conditions linked to the investment (such as job creation), upon which they can secure a permanent green card. can do. , paving the way for US citizenship. Other European countries, such as Spain and Greece, offer their own version of the Golden Visa program.
North Macedonia and Turkey grant citizenship directly to investors, upon making qualifying investments, without any residency obligations, unlike the US or European Golden Visa programs.
Why does Portugal want to abolish the Golden Visa?
For some years, the European Commission has been cracking down on the Golden Visa programs offered by member states. It considers granting passports against pre-determined investments without sufficient links to a member state, a breach of EU law. Previously, the EU had viewed Cyprus and Malta as “selling” passports.
However, Portugal’s Golden Visa program is different from those previously offered by Cyprus and Malta. It is a “residency” based program as opposed to direct citizenship. Nevertheless, it continues to attract scrutiny from the European Union. Additionally, investments from Golden Visa investors have potentially contributed to an increase in average house prices across Portugal, putting local pricing at risk. Portuguese residents from the property market make it an ideal political fodder.
Is Portugal’s golden visa system really about to end?
In the last week of November, Portugal’s parliament was in session to discuss the country’s budget for 2023. During this session, a formal motion to end the Golden Visa program was introduced. The proposal was opposed by the Socialist Party, the centre-left party that had won the previous general election. In addition, the proposal was also voted against by the centre-right Social Democratic Party (PSD) and Chega, the third largest party.
This setback certainly does not rule out any plans to phase out the Golden Bisa regime at least in 2023. in a systematic manner, with adequate notice to stakeholders, and to protect the interests of investors who have already entered the system.
To conclude, this is an opportunity for investors who have been waiting to enter while the door is open, at least for now.
Onkar Redkar is the Partner at My Golden Pass.
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