Chief Financial Adviser
Mar 24, 2023
Investing in Portugal for Citizenship: Is It the Right Choice for You?
In the modern, interconnected world, an ever-growing number of individuals and enterprises seek to broaden their horizons beyond the boundaries of a single nation, be it for their livelihoods, lifestyles, or investments. The concept of entrusting everything to a single basket is now considered archaic by many. Do you yearn to experience living, working, or setting up a business in the European Union? If so, you will be pleased to know that such an opportunity is now within your grasp. For those who possess the necessary financial resources but are not quite ready to make the move just yet and desire to have a backup plan, an alternative approach exists that affords the ability to relocate at any time. If you find yourself in such a position, the scenic and welcoming nation of Portugal may be the perfect fit for you.
The Portuguese government has established a residency program (Golden Visa) that allows investments in three areas: Transfer of capital (including Funds, R&D and Cultural Heritage), real estate and business (which includes job creation). Unlike other residency programs, the Golden Visa program requires a financial investment for acceptance. Investors may apply for citizenship after a period of five years. The Portuguese Golden Visa, as opposed to other residency programs, does not require an extended stay nor a transfer of tax residency to Portugal. In this specific case, investors are only required to stay in the country for an average of seven days per year during their residency, while having the opportunity to work, study, or reside in Portugal and have visa-free access to other Schengen countries within the European Union.
Why Choose Portugal for Residency?
Of course, there are many countries that would love to have your investment. So, what makes Portugal the new hotspot that retirees, families and entrepreneurs are choosing? Why is Portugal becoming so attractive? There are many reasons besides the sweet residency deal.
Portugal is one of the oldest nations in Europe and also rates high on quality of life and safety. Portugal’s public healthcare system is available to all and considered one of the best in the world. There is a great diversity of culture in the larger cities, as people from all over the world have been moving to Portugal.
You are taken back in time, surrounded by ancient buildings and structures from the Romanesque, Baroque, and Renaissance Periods that are scattered in with modern buildings and infrastructures.
Portugal stands out as a land of political and economic stability, distinguished by its premium education and strategic location that serves as a gateway to both Europe and the Americas. Its rich cultural and historical ties to Africa and Asia offer novel avenues for business prospects, elevating its appeal to global investors. In addition to these advantages, Portugal's captivating sunsets over the sprawling ocean, bustling nightlife, and mouthwatering cuisine lend it a distinct charm that has earned it a place among the world's most sought-after destinations.
Although investing in Portugal may seem appealing, you might question the investment requirements needed to do so. Let's get into these details as we explore the Portugal Golden Visa and what it means for citizenship through investment.
Portugal Golden Visa - What is Portuguese Citizenship by Investment?
Embarking on the journey to becoming a Portuguese citizen is within reach through the Golden Visa program. Launched in 2012, this program opens doors to a world of opportunities by allowing investors to obtain a five-year residency permit, which may ultimately lead to acquiring citizenship after five years.
The Golden Visa enables investors to live, work and/or study in Portugal, as well as travel visa-free to other Schengen countries including:
- Czech Republic
It's important to understand that while a Portuguese residence permit allows for tourist travel to other EU countries, it does not provide the right to live, work, or study in those countries. However, obtaining Portuguese citizenship and a passport grants the same rights as any other European citizen to work, live, and study in the EU Schengen area.
Residency by Investment must be maintained for five years in order to obtain Portuguese citizenship. The first residence permit is issued for two years, after which it is renewed at the end of the 2nd year for an additional two years. The final renewal happens at the end of the 4th year before you can then apply for permanent residence or citizenship at the end of the 5th year. Unlike other countries where there is a requirement to live there for a certain length of time throughout the temporary residency, the Portuguese Citizenship by Investment program only requires that you be physically present in Portugal for an average of seven days per year or 14 days for every two year residence permit.
Three Ways to Obtain Portuguese Citizenship through Investment
If you're dreaming of obtaining a residence permit in Portugal, then you're in luck - the Portugal Golden Visa program has got you covered with three thrilling routes to choose from: transfer of capital, real estate and a business investment. Each of these paths has its own unique benefits and requirements, but all offer a great opportunity to establish a foothold in Portugal. Let's take a closer look at each one.
A Pathway to Citizenship through Transfer of Capital
To qualify for Portuguese citizenship through transfer of capital, a minimum transfer of 1.500.000€ ($1,532,700 USD) is required, which can be made through specific banks or investment programs. Once you have obtained a residency permit, the investment must remain in the country for at least five years to continue qualifying for the permit. You will need to demonstrate that the investment meets certain yearly benchmarks during this time. After obtaining citizenship, there is no longer a requirement to maintain the investment.
Funds, R&D and Cultural Heritage
Another option is to invest 500,000€ ($510,900 USD) in an investment or venture capital fund that specifically targets Portuguese companies, with a minimum maturity of five years.
You can also invest in entities that engage in scientific or technological research (R&D) that contributes to Portugal's scientific or technological systems. If the company's headquarters are located in a low-density area, the minimum investment is reduced by 20%, bringing it down to 400,000€ ($431,600 USD).
Additionally, capital investments in qualified artistic production or the repair and maintenance of certain national cultural heritage sites are also viable options. The minimum investment required varies by location, ranging from 200,000€ to 250,000€ ($204,360 to $255,450 USD).
It's important to note that as of January 2022, there have been some changes to the investment requirements. For instance, funds and venture capital units now require an initial investment of 500,000€ and the minimum capital transfer value has increased from 1,000,000€ to 1,500,000€. Furthermore, the minimum investment threshold for investing in R&D has risen to 500,000€, up from the previous threshold of 350,000€.
Real Estate Investment in Portugal - How and Where can you Buy a Property
Investing in real estate in Portugal can provide an opportunity for potential investors to participate in the country's economic growth. However, it's important to note that there are new regulations, as of January 2022, that have been implemented to control the increase in property prices in some of the larger cities. These regulations aim to ensure that the real estate market remains accessible and affordable to all, while still providing a solid investment opportunity.
One of the major changes that have taken place since the start of 2022 is related to the rules which apply to those choosing to invest in real estate. The minimum amount of 500.000€ remains unchanged, but Golden Visa applicants may no longer purchase properties intended for residential purposes in high-density areas and most of the Portuguese coastline.
Purchase of retail, offices, serviced apartments and other commercial property is still eligible for the Golden Visa program in any area of Portugal. Rustic interior areas beckon to potential investors, offering a wealth of investment opportunities, especially in the alluring regions of Alentejo, Douro Valley, and Peneda Gerês. These areas present a promising prospect for investment, with their cost-effective investment prices and abundant prospects for growth, all of which make them a perfect choice for investors who aspire to tap into Portugal's thriving hospitality and tourism industries. Whether one has a taste for daring outdoor exploits, yearns for rich cultural experiences, or seeks to explore the country's religious landmarks, these regions present a vibrant tapestry of possibilities.
Business Investment in Portugal - What are the options?
There are two business investment choices available to investors. The first option is to generate at least ten new jobs or eight new jobs in a low population density area. The second option is to invest 500,000€ in the formation or expansion of a business registered in Portugal with the objective of creating or retaining at least five permanent jobs for a minimum of three years. Both options provide a great opportunity to invest in Portugal's economy and establish a foothold in the country, while also fulfilling the requirements for a Portugal Golden Visa.
The country also offers opportunities to invest in innovative startups as well as established industries such as textiles, cork or oil refining. In addition, the Algarve and Alentejo coasts provide potential for tourism, serviced apartments or agricultural projects, with miles of stunning beaches to entice investors. For those interested in starting a business, the Azores and Madeira are economic free zones with tax benefits, duty exemptions, and free movement of capital, making them profitable regions to consider.
Discovering the Benefits of Investing in Portugal’s Golden Visa
In conclusion, investing in Portugal presents a fantastic opportunity to not only obtain residency in a beautiful and welcoming country, but also to potentially obtain European citizenship. Compared to other "Plan B" options, such as obtaining a residency or citizenship in another country, Portugal stands out for its affordability, ease of obtaining residency and citizenship, and the high quality of life it offers.
Investing in Portugal is not just about obtaining a Plan B, but also about taking advantage of a unique opportunity to live, work, and invest in one of the most desirable countries in Europe. If you're looking for a stable and prosperous country to call home, Portugal is certainly worth considering.
For more help…
While Portugal has simplified the process of obtaining citizenship, navigating the numerous requirements can still be challenging. We're here to assist if you have any questions or need advice on obtaining legal residency. To discover more, please book a call with us.