Investment residency programs are a popular route for those looking to live legally in a country of their choice. Portugal’s Golden Visa and the United States ‘ EB-5 Visa stand out as two attractive options, but with major differences in terms of investment amounts, processing time and benefits.
Below, we will explore the main characteristics of these two programs, comparing their requirements and advantages.
What is the Golden Visa Portugal?
The Golden Visa Portugal, or Residence Permit for Investment Activity (ARI), was created in 2012 to attract foreign capital and stimulate the Portuguese economy.
The program allows investors and their families to live, work and study in Portugal, as well as offering access to the Schengen Area.
After five years, investors can apply for Portuguese citizenship.
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What is the US EB-5 Visa?
The EB-5 Visa, introduced in 1990, offers a route for foreign investors to obtain a Green Card, allowing permanent residence in the United States.
The program aims to create jobs and stimulate economic development, mainly in areas designated as Targeted Employment Areas (TEAs).
Investment Values: Golden Visa Portugal vs. USA EB-5 Visa
One of the main differences between Portugal’s Golden Visa and the US EB-5 Visa is in the investment amounts required, which can vary significantly depending on the route chosen and the location of the investment.
Golden Visa Portugal
Portugal’s Golden Visa is widely recognized for being one of the most affordable investment residency options in Europe.
Here are the main options:
- Cultural or artistic donation: €250,000. This option allows the investor to make a donation to cultural or artistic heritage preservation projects in Portugal.
- Investment funds: €500,000. This route requires investment in qualified funds, such as private equity or venture capital funds, which are aligned with sectors such as technology, energy and innovation. It is important to note that funds related to real estate investments are not eligible.
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- Creation of 10 jobs: €500,000. The investor must create a company in Portugal or increase the share capital of an existing company, creating or maintaining at least 5 permanent jobs.
- Scientific research: €500,000. An investment in scientific research carried out by public or private institutions in Portugal.
US EB-5 Visa: Investments starting at $800,000
The US EB-5 Visa is known for having a higher investment value, especially when compared to Portugal’s Golden Visa. The minimum requirement varies between $800,000 and $1,050,000, depending on the location of the investment. Below are the details:
- Target Employment Areas (TEAs): If the investment is made in a Targeted Employment Area (TEA), whichincludes rural areas or regions with high unemployment (at least 150% of the national average), the minimum amount is $800,000. These areas have been designated to encourage economic development and job creation in disadvantaged locations.
- Outside of TEAs: For investments outside of areas designated as TEAs, the required amount rises to $1,050,000. This generally applies to urban areas or economically stable regions, where the incentive to invest is lower.
In addition to the investment amount, EB-5 applicants have two possible paths:
- Direct Investment: The investor must create a new commercial enterprise or invest in an existing business, being responsible for the creation of at least 10 direct jobs for citizens or permanent residents of the United States. These jobs must be created within two years.
- Investment through Regional Centers: This option is very popular with EB-5 investors, as it allows them to invest in projects managed by Regional Centers approved by the United States Citizenship and Immigration Services (USCIS). Regional Centers facilitate compliance with job creation requirements, accounting for both direct and indirect jobs. Around 90% of EB-5 visa applications are made through this route.
Golden Visa Portugal or USA EB-5 Visa?
Additional Costs and Fees
In addition to the investment amounts, both programs include additional costs and fees that should be taken into account in the investor’s financial planning:
- Golden Visa Portugal:
- Online application fee: €773.74 per person.
- Visa issuance fee: €7,730.11 per person.
- Renewal fee (after two years): €3,865.79 per person.
- USA EB-5 Visa:
- Form I-526 (investor petition): $3,675 per person.
- Biometrics: $85 per person.
- Form I-485 (adjustment of status) or Form DS-260 (consular processing): $1,140 or $345, respectively.
- Regional Center Administration Fee: Usually between $50,000 and $70,000.
- After two years of conditional green card status, the investor must file Form I-829 to remove the residency conditions, with a fee of $3,750 and an additional biometric of $85.
Requirements
Golden Visa Portugal
Eligibility Requirements
To be eligible for the Golden Visa, the investor must meet some basic conditions:
- Nationality: The applicant must be a citizen of a country that does not belong to the European Union (EU), European Economic Area (EEA) or Switzerland.
- Minimum age: There is no specific age restriction, but the investor must be over 18.
- Legal origin of funds: The investor must prove that the funds used for the investment have a legal origin.
- Criminal record: The investor and their dependents must have a clean criminal record both in Portugal and in their country of origin.
- Identification documents: Valid passport and other identity documents are required during the process.
Residence requirements
The Golden Visa program is known for its flexibility of stay. The investor must fulfill a minimum length of stay in the country:
- First year: The investor must spend at least 7 days in Portugal.
- Every two years thereafter: The investor must spend at least 14 days in Portugal during the two-year validity period of the visa.
Renewal requirements
The Golden Visa is initially issued for two years and can be renewed as long as the following requirements are met:
- Maintenance of the investment: The investor must maintain the investment for at least 5 years.
- Fulfillment of the minimum stay: The investor must have fulfilled the minimum stay requirements (7 days per year or 14 days every two years).
US EB-5 Visa Requirements
There are two main routes to EB-5 visa investment:
Direct investment: The investor must create a new commercial enterprise and be directly responsible for running the business. This venture must generate at least 10 direct jobs for US citizens or legal permanent residents.
Investment in Regional Centers: The investor can choose to invest in a project approved by Regional Centers. In this route, the investor does not have to directly manage the business, and the jobs created can be indirect or induced (generated by the supply chain and other economic factors).
Job Creation Requirements
The venture financed by the investment must create 10 full-time jobs for American workers. In the case of direct investment, these jobs must be direct jobs, i.e. created directly by the operation of the company.
For investments in Regional Centers, both direct and indirect jobs can be counted, increasing flexibility and the chances of meeting this requirement.
Eligibility requirements
Legal origin of funds: The investor must prove that the money used in the investment was obtained legally. This can include proof of income, sale of property or donations.
No criminal history: The investor must not have a criminal record that would disqualify their participation in the program.
Active or passive management: In the case of direct investment, the investor must be actively involved in the management of the enterprise. For investments in Regional Centers, active management is not required.
Permanence requirements
There is no formal minimum stay requirement in the country, but in order to maintain permanent resident status (Green Card), the investor must spend a significant amount of time in the United States. Prolonged absences can result in the loss of the Green Card.
Taxes on the Portugal Golden Visa vs. US EB-5 Visa
Both the Portugal Golden Visa and the US EB-5 Visa have tax obligations that can impact investors. Below, we will explore the tax information for each of the programs as described in the texts provided.
Taxes on the Portugal Golden Visa
In the case of Portugal’s Golden Visa, there are some important tax advantages that can benefit foreign investors, mainly regarding taxation on global income and the tax benefits granted by the Portuguese government.
Global Income:
In the context of the Golden Visa, investors do not have to pay taxes in Portugal on income that is generated outside the country, provided that they do not become tax residents (i.e. that they do not spend more than 183 days in the country in a given year).
This allows investors to keep the majority of their global income outside the scope of Portuguese taxation if their stay in the country is limited.
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Income Tax and Tax Regime:
For investors wishing to benefit from the tax incentives offered by Portugal, there is the possibility of registering as a tax resident in the country.
Portugal offers a program known as the Non-Habitual Resident Tax Regime (RNH), which grants tax exemption in certain categories, this includes types of income such as dividends, pensions and capital gains, as long as they come from foreign sources.
Investors who opt for this regime can benefit from reduced or even exempt taxation, which makes Portugal an attractive option for tax planning and global income optimization.
Taxes on the US EB-5 Visa
In the case of the US EB-5 Visa, investors face a stricter tax system, with implications for worldwide income and the need to report earnings from various sources.
Tax Residency and Global Income:
The EB-5 Visa holder, after obtaining the Green Card, is automatically considered a tax resident of the United States. This means that the investor must declare and pay taxes on all their global income, including income generated outside the US. This is one of the fundamental differences between the two programs, since the United States has one of the most comprehensive and rigid tax systems in the world.
Tax Obligations on Global Income:
Once an investor becomes a US tax resident, they will be obliged to pay taxes on all sources of income, whether generated inside or outside the country. This system applies to any type of income, including investment income, dividends, interest and capital gains.
In addition, the investor needs to be aware of specific tax obligations for US residents, such as the need to report accounts and financial assets held abroad.
Advantages of Each Program
Golden Visa Portugal
- Affordable investment amount: With options starting at €250,000, the Golden Visa offers one of the most affordable entry points to the European Union.
- Flexible residency requirements: Only 7 days of residence per year.
- Family benefits: Spouse and dependent children can be included in the same visa application.
- Citizenship after five years: Possibility of becoming a Portuguese citizen with the right to a European passport, with access to 27 EU countries.
- Visa exemption in the Schengen Area: Facilitates travel for business and tourism in more than 26 European countries.
USA EB-5 Visa
- Green Card: The EB-5 offers permanent residency, which is one of the fastest ways to obtain a green card in the USA.
- No language or education requirements: Unlike other immigration programs, EB-5 does not require investors to have English proficiency or an academic qualification.
- U.S. Citizenship: After five years of residency, investors can qualify for U.S. citizenship.
- Opportunities in the United States: Access to the US job market, with options to study, work and live in any state.
Disadvantages of Golden Visa Portugal vs. USA EB-5 Visa
Although both programs offer attractive opportunities for foreign investors, both Portugal’s Golden Visa and the US EB-5 Visa have their drawbacks. The choice between them depends on a number of factors, such as the amount of the investment, stay requirements, and the investor’s long-term goals. Below, we highlight the main disadvantages of each program in comparison to the other.
Disadvantages of the Golden Visa Portugal
Less access to the global labor market:
Although the Golden Visa allows you to reside and work in Portugal, it does not offer the same level of access to the global labor market as the US EB-5 Visa.
Investors who intend to work in the US, one of the largest markets in the world, may find the Golden Visa limiting. Freedom to work in other European Union countries is only possible after acquiring Portuguese citizenship, which can take 5 to 6 years.
Disadvantages of the US EB-5 Visa
Much higher investment requirement:
The investment amount in the EB-5 Visa is substantially higher than that required by the Golden Visa. While the minimum investment in the Portuguese program starts at €250,000, the EB-5 requires at least $800,000 (in TEAs) or $1,050,000 for other areas. This can be a major obstacle for investors who want to diversify their portfolio without tying up such a large sum.
Strict job creation requirements:
The EB-5 Visa requires the creation of at least 10 direct or indirect jobs in a two-year period, which can represent an additional risk for the investor.
Depending on the success of the venture and the US economy, the creation of these jobs may not be guaranteed, especially in the case of direct investments. In Portugal’s Golden Visa, the job creation requirements are less strict, especially for those who opt for investment fund routes or cultural donations.
Long and uncertain approval process:
The processing time for the EB-5 Visa can be considerably long, taking 18 to 24 months or more before the conditional Green Card is issued.
In addition, there is a risk of the visa being denied, especially if the investor cannot prove the legal origin of the funds or meet the job creation requirements. In comparison, Portugal’s Golden Visa has a more straightforward process, with approval usually within 6 to 9 months of submission.
Complex tax residency:
The EB-5 Visa automatically makes the investor a US tax resident, which means that their global income will be taxed by the United States, one of the strictest tax systems in the world.
For investors who do not intend to live permanently in the US, this requirement can be a considerable financial burden. The Golden Visa offers more flexibility in this regard, allowing investors to avoid Portuguese tax residency if they spend less than 183 days in the country.
Stricter residency requirement:
In order to maintain a green card in the US, the investor needs to spend a significant amount of time in the country. Prolonged absence can result in the loss of permanent resident status. In contrast, Portugal’s Golden Visa is extremely flexible, requiring only 7 days in the country per year, which offers more freedom for global investors.
Conclusion on Golden Visa Portugal and USA EB-5 Visa
Each program has disadvantages that can influence investors’ decisions. Portugal’s Golden Visa is attractive for its lower initial investment and greater flexibility of stay, but may be less advantageous for those seeking larger and more dynamic labor markets, such as the United States.
On the other hand, the EB-5 Visa offers access to the US market and US citizenship, but at a substantially higher cost and with strict requirements for both investment and job creation. The choice between the two programs will depend on the investor’s objectives and priorities, whether the focus is on access to the European market with lower stay requirements or on opportunities in the US with a more expensive and complex process.
