CEO and Founder of moviinn
Oct 20, 2023
Portuguese Golden Visa 2.0: What's In, What's Out, and Why It Matters
Nestled on the Iberian Peninsula, Portugal is an alluring mix of ancient cities, golden beaches, and rolling countryside. For years, the Portuguese Golden Visa has been a ticket for investors seeking entry into this European paradise and beyond. However, the winds of change have swept through the Golden Visa program, with significant amendments introduced to the program, effective October 7, 2023, heralding shifts in the types of investments that qualify.
Understanding these changes and their implications is key to making an informed decision. Let's delve deep into what the new Golden Visa law means for you as a potential investor and why Portugal is still an appealing investment destination.
Golden Visa: Tracing the Evolution
The Portuguese Golden Visa was primarily anchored in real estate investments. For years, acquiring property, especially in the urban hubs of Lisbon, Porto, and the Algarve, was synonymous with securing the visa. However, as of the recent amendments, this is no longer the case. Real estate, whether through funds focused or related to property investments, is off the list.
The reshaping has a dual purpose:
- Balanced Development: The hope is to channel foreign investments into sectors and regions that need it most, fostering balanced development across the country.
2. Diverse Investment Portfolio: By diversifying the kind of investments qualifying for the visa, Portugal aims to build a robust, multi-faceted economy, not overly reliant on its property market.
What's No Longer Eligible?
The new law has phased out some previously popular avenues:
Direct Real Estate Acquisitions:
- Direct purchase of properties valued at or above €500,000 with a 20% reduction for investments made in low-density areas, is no longer an eligible pathway.
- Investments in properties at least 30 years old or in urban rehabilitation areas, requiring a minimum total value of €350,000 for both purchase and rehabilitation, with a 20% reduction for investments made in low-density areas, have also been excluded.
Significant Capital Transfers:
- Direct capital transfers of 1.5 million euros or more are no longer viable for the Golden Visa.
Real Estate-Related Funds:
- Funds, either directly or indirectly tied to real estate investments, won't qualify for Golden Visa investments anymore.
Investment Avenues which continue to be Eligible
While some doors have closed, others have remained open, providing diverse opportunities:
1. Job Creation: Initiatives creating at least 10 job positions remain a viable pathway, with the number reduced by 20% if the activity is based in territories of low-density areas.
2. Scientific Research: Transfers of €500,000 or more into research activities by both public or private scientific institutions in the national scientific and technological system.This amount can be reduced by 20% if the activity is based in territories of low-density areas.
3. Cultural Heritage and Art: Capital transfers of at least €250,000 aimed at supporting national cultural heritage, artistic production, or related recovery efforts qualify. This amount can be reduced by 20% if the activity is based in territories of low-density areas.
4. Investment Funds: Investments of €500,000 or more for acquiring units in investment or venture capital funds (focused on company capitalization) are encouraged. These funds must have a minimum five-year maturity and ensure that at least 60% of their value is invested in commercial companies based in Portugal. It's important to note that these companies cannot be engaged in real estate activities.
5. Corporate Investment: Capital transfers of €500,000 or more are valid when used to establish a commercial company in Portugal or for enhancing the capital of an existing one. This investment should be combined with creating five permanent jobs or maintaining ten existing positions for at least three years.
- No Retroactivity: The changes won't affect existing holders of the Golden Visa or their ongoing applications. They remain valid under the program’s earlier stipulations.
- Renewal and Family Reunification: Golden Visa holders won’t face challenges when renewing their residence permits or renewing for family reunification.
- Conversion to D2 Residence Permit: Upon renewal, Golden Visa holders will be transitioned into the regular "Residence Permit for Entrepreneurs" (D2). While the specific terms for this transition remain undefined, the reassuring news is that there will be no increased minimum stay requirement. The existing Golden Visa stipulation, a minimum stay of seven days in the first year and 14 days in subsequent two-year periods, will prevail.
- Pending Applications: It has been established that any applications for the issuance or renewal of residence permits tied to real estate investment and transfer of capital in the amount of 1.5 million euros, which are still under review by the relevant authorities as of the effective date of the new law, will remain in good standing. This also applies to applications undergoing preliminary checks within municipal councils.
What are the continued benefits of the Portuguese Golden Program?
The Golden Visa isn't merely about investments; it bestows holders with a myriad of benefits:
- Minimal Stay: Portugal offers one of the unique Golden Visa programs in Europe that doesn't require continuous residency. With just a seven-day stay required in the first year and 14 days across the subsequent two-year intervals, it averages out to about 7 days a year, providing exceptional flexibility for those not wishing to relocate.
- A Gateway to Europe: Beyond living, working, and studying in Portugal, the visa guarantees unhindered travel across the 27 countries that are part of the Schengen Zone.
- Family Comes Along: Your immediate family – spouse, dependent children, dependent parents and dependent in-laws – can also bask in the visa's privileges.
- Path to Residency & Citizenship: After five continuous years of legal residency, the path to permanent residency and/or citizenship unfolds.
- Tax Benefits: New tax residents can exploit Portugal's Non-Habitual Resident (NHR) regime, enjoying significant tax reductions for a decade, although this regime may be coming to an end this year with the 2024 Government Budget.
- Education Opportunities: The visa opens doors to Portugal’s top-tier educational institutions for your children.
- Healthcare: Golden Visa holders gain access to Portugal's renowned healthcare system, ensuring top-notch medical care for both preventive and treatment needs.
The Application and Renewal Insights
Existing Golden Visa holders and applications in the pipeline as of the new law's inception won't be left in the lurch. They stand firm, validated by the program’s previous guidelines. Holders can expect seamless renewals and family reunification applications.
Upon renewal, Golden Visa holders transition to the regular "residence permit for Entrepreneurs" (D2). Notably, there's no heightened stay prerequisite – the established Golden Visa stipulations apply. Those with applications under pre-approval from municipal councils will also be acknowledged, transitioning to the D2 permit once green-lit.
To gain a thorough insight into the program's investment, application, and renewal processes, consult our article "Portugal Golden Visa: Everything You Need to Know About the Investment Process", which provides a detailed step-by-step breakdown.
Why Portugal, Why Now?
Despite the pivot away from real estate, the Golden Visa program retains its shine for a multitude of reasons:
1. Diverse Opportunities: This revamped structure allows investors to align their investments with personal passions and global trends, from cultural to technological innovations.
2. Promising Returns: Sectors like science and technological research are not only fulfilling in terms of visa requirements but also promise considerable returns on investment given global consumption patterns.
3. European Gateway: The inherent benefit of the Golden Visa remains untouched. It still serves as your passport to live, work, and study in Portugal, while also granting visa-free access across the 27 countries of the Schengen Zone.
4. Wider Impact: By diversifying your investment under the new guidelines, you play a role in Portugal's broader socio-economic development, contributing to its sustainable and balanced growth.
Nurturing a Portuguese Connection
Portugal offers more than just a strategic European base. Here’s what you’re buying into:
- Culture & History: A land steeped in history, Portugal is a melting pot of cultures, offering a rich tapestry of experiences.
2. Thriving Economy: With a focus on technology, agriculture, and SMEs, the Portuguese economy is poised for sustained growth.
3. Warm Community: Known for its hospitable locals, in Portugal, you're not just an investor but a cherished member of a community.
Mapping the Future
Portugal’s redirection from a real estate-centered Golden Visa approach signals its commitment to diversified growth sectors like science, technology, culture, and education. It beckons investors to align with emerging global paradigms. Initial hesitations are natural, but as the market reorients, it promises to unfurl innovative ventures, satiating Portugal's contemporary investment appetite.
For investors, this signifies not just monetary investment but a chance to be an integral part of Portugal's evolving narrative. Every change harbours potential, and in this context, it's a promise of a sustainable, multifaceted, and resilient Portugal.
Charting Your Path with moviinn
The evolving Golden Visa landscape might seem daunting, but moviinn is here to help.
In this evolving landscape, teaming up with experts can make the transition smooth. moviinn is poised to be your guide, ensuring that each step of your Portuguese journey is informed and seamless. The allure of Portugal remains vibrant, with its multifaceted opportunities beckoning more than ever.
Reach out to moviinn today, and let's navigate this revamped investment terrain in Portugal together, ensuring your European dream remains as luminous as ever.