The end of the Golden Visa in Portugal has been a topic of much debate, but the reality is that the program has not ended, it has just undergone significant changes.
These changes reflect the need to adapt the program to the country’s new economic and social realities, redirecting investments to other key sectors.
This article explores these changes, highlighting what remains valid and the new opportunities for investors from 2024 onwards.
You will find a detailed analysis of the creation of the Golden Visa, its motivations and the impacts of recent legislative changes.
We’ll also discuss the investment modalities that have been discontinued, those that are still eligible and the advantages of investing in venture capital funds.
If you’re considering investing in Portugal, you can’t fail to read to the end.
Have a good read.
When did Golden Visa Portugal come along? What is its purpose?
The Golden Visa was created in Portugal in the second half of 2012, specifically in October.
The main aim of this investment visa is to attract foreign investment into the Portuguese economy.
This was a strategy adopted by Portugal, as well as several countries around the world, especially in Europe, including countries such as Spain, Greece, Malta, Cyprus and Italy.
It’s worth remembering that in 2012 the world was going through great economic instability, reflecting the collapse of the US real estate bubble in 2008.
At the time, Portugal was facing significant economic challenges, including high unemployment and a stagnant real estate market.
This is how the Golden Visa came about, which, in exchange for foreign investment, offers residence permits to citizens from outside the European Union.
Its format ended up being transformed into a quick and simplified route to legal residence in Portugal.
In addition, through the Portuguese Nationality Law, those who maintain this residence for 5 years can also apply for dual citizenship. It’s the easiest way for non-Portuguese descendants and their families to become Europeans.
In addition to revitalizing the real estate market, the Golden Visa also aimed to promote the development of areas with lower population density and to support strategic sectors such as technology and innovation. The program offered foreign investors the possibility of obtaining a residence permit, which could be renewed and eventually lead to Portuguese citizenship after five years.
Since its inception, the program has granted the RA to more than 12,700 investors and more than 20,000 related family members. The countries that have benefited most are China, Brazil, South Africa and Turkey.
With this historical basis, we can now explore the recent changes that marked the end of certain Golden Visa modalities and the impact of these changes on the program as a whole.
- One of the great advantages of the Golden Visa Portugal Program is that it offers Portuguese citizenship to the whole family.
But what about the investors who have already bought property and applied for the Golden Visa?
Current investors who have already obtained the Golden Visa through real estate purchases have not been retroactively affected by the new rules, but new applications from 2024 onwards must meet the revised criteria.
The Golden Visa Portugal did not end in 2024.
Which Golden Visa Portugal investments have come to an end?
The changes in 2024 resulted in the end of the following investment modalities for the Golden Visa Portugal:
Purchase of residential and retirement properties:
This modality, which previously made it possible to obtain the Golden Visa through the purchase of residential property worth at least €500,000, and €300,000 for retirement, has been discontinued.
Capital transfer:
Capital transfers of €1,500,000 to Portuguese bank accounts or the acquisition of public debt securities are no longer eligible for the Golden Visa.
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What modalities for investing in the Golden Visa are still valid in Portugal as of 2024?
Despite the end of the Golden Visa in Portugal for two modalities, there are still 5 investment possibilities:
Investment funds or Venture Capital Funds:
Minimum investment: €500,000
Investment in qualified Portuguese funds that invest in sectors such as tourism and services.
This type of investment is currently the most requested by the Portuguese government.
Support for Portuguese companies:
Minimum investment: €500,000
Creation of at least 5 positions in established companies, maintained for a period of 3 years.
Subsidizing scientific or technological research:
Minimum investment: €500,000
Application in research activities conducted by public or private institutions integrated into the Portuguese scientific and technological system.
Investment in culture or national heritage:
Minimum investment: €250,000
Projects for artistic production, recovery or maintenance of national cultural heritage.
Job opportunities:
Creation of a minimum of 10 positions.
This number can be reduced to 8 positions if the investment is made in areas of low population density in Portugal.
Advantages of investing in venture capital funds instead of buying real estate for the Golden Visa?
Investing in venture capital funds offers several advantages over buying real estate, especially after the recent changes to the modalities eligible for the Golden Visa in Portugal.
Portfolio diversification
Venture capital funds allow investors to diversify their investments in various sectors, such as tourism, infrastructure and services. This diversification reduces the risk associated with relying on a single asset, such as real estate.
Potential for high returns
Investments in equity funds can offer significantly higher returns, especially when focused on fast-growing and innovative sectors.
For example, the Life Fund has a target annual internal return (IRR) of 10%, in addition to other economic benefits.
Professional management
The funds are managed by teams of experienced professionals who have in-depth knowledge of the market and the best investment strategies.
This guarantees efficient management and maximized returns.
Ease and convenience
Investing in venture capital eliminates the need to deal with the operational and administrative aspects of property management, such as maintenance, leasing and sales.
Investors can simply allocate their capital and leave the management in the hands of experts.
Tax incentives
Portugal offers tax incentives that can further increase the return on investment. For example, non-habitual residents are exempt from tax on dividends generated.
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Example of a Venture Capital Fund: VIDA Fund
The VIDA Fund is an example of a venture capital fund regulated by the Portuguese government and eligible for the Golden Visa. This fund focuses on investments in the sustainable hospitality sector in Portugal.
Some details about the Vida Fund include:
Fundraising target: €50 million
Fund life cycle: 7 years
Target return: 10% annual internal return (IRR)
Minimum investment for Golden Visa Portugal: €500,000
Objective: To transform undervalued properties into highly profitable assets, such as hotels and serviced apartments.
Benefits: Investors have the opportunity to obtain the Golden Visa, consequently Portuguese citizenship, as well as potentially significant financial returns.
The VIDA Fund stands out for its focus on sustainability, promoting projects that follow strict environmental standards.
In addition, the fund is managed by an experienced hotel and investment management team, ensuring an integrated and efficient approach at all stages of the project.
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