Igor's story. How to get EU citizenship for investing in profitable real estate in Portugal

Igor’s story. How to get EU citizenship for investing in profitable real estate in Portugal

Table of Contents

obtain EU citizenship. How it all started

Igor's story. How to get EU citizenship for investing in profitable real estate in Portugal 8

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How it all started

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In my life, I have tried to realize myself in various spheres, but it was always an investment-related experience in one way or another. As many people do, I started with the purchase and long-term trading of assets, then there was the stage of the capital increase and constant investments, and in 2011 I first became interested in real estate investments. Then I invested in a new building, the value of the apartment in which, after its commissioning, rose by 36%. I realized how profitable that business could be, and I continued to expand my investment portfolio. Finally, in 2018, I decided to invest in real estate outside of Russia for the first time. 

In fact, there was quite a specific reason for this. In 2018, the real estate market in Russia was going through bad times. There are many reasons, but I consider the main one to be the expansion of the sanctions list, followed by the fall in the ruble exchange rate. In any case, the result was a sharp drop of 40% in the amount of investment compared to last year. At the same time, encouraged by last year’s successes, I made a deal that I consider to be my main professional mistake in life. Even then, I decided it was worth moving in a different direction.

In addition, there was another reason for my decision to invest in the European, real estate market: the possibility of obtaining EU citizenship. I myself come from a small city, and although I have lived in Moscow for almost 15 years, I could not adapt to the local pace of life. The European pace is much closer to me, but I must admit that I felt out of place for the first month even there.

I nurtured the idea of moving my capital from Russia and moving to Europe for three long months until I met with an old friend who, as it turned out, had been living in Austria for a year. His situation was similar, so one word led to another, and here I was going home, not with a thought, but with the certainty: “We have to try!

Why Portugal for income property investment?
Igor's story. How to get EU citizenship for investing in profitable real estate in Portugal 9

Why Portugal for income-producing real estate investments?

The main question I had to decide on was the choice of country to invest in. I had two fairly simple selection criteria at the time:

  1. The country must have an immigration program that allows you to get EU citizenship for an investment in real estate
  2. The requirement for the amount of investment must not exceed 650,000 euros. That was the budget I allocated for the purchase and renovation of the property.

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Further on, I followed a method of elimination. Central European countries like Austria, France, or Germany could be immediately discarded on the second point. In Poland, Greece, Czech Republic, and Bulgaria, I did not consider the low demand for housing from the local population, leading to problems when trying to resell.

This way, I was able to narrow my choice down to three countries that suited me perfectly: Spain, Cyprus, and Portugal. So why did I choose Portugal?

  • , Unlike Cyprus, there is tourist demand for real estate and local people.
  • , Unlike Spain, the unemployment rate is lower, and the average standard of living is higher. Consequently, the demand for real estate is higher.

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Choosing an immigration program and working with MoveToCascais
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Selecting an immigration program and partnering with MoveToCascais

I had learned one important rule throughout my career: if you want something done quickly and efficiently, you better leave it to a professional in the field, so as soon as I decided on a direction, I started looking for an agency that could provide me with legal advice.

When choosing the consulting agency, I paid attention to two main factors: the long presence in the market and the real cases in the public domain – this guaranteed reliability. On the recommendation of one of the thematic forums, I came across MoveToCascais and on the first consultation, it was clear that this is exactly what I was looking for. With the guys from MoveToCascais, we went all the way from getting the first visa and choosing the property to apply for a residence permit and starting our own business.

How does an investor get EU citizenship and what is Golden Visa Portugal?

After my first conversation with an employee from MoveToCascais, the main question became clear: can I get EU citizenship to invest in real estate in Portugal? It turned out that in Portugal, since 2012, there is a separate program for foreign investors called “golden visa.” The terms are simple: you invest a certain amount in the country’s economy, research activities, or real estate, for which you get the opportunity to obtain a residence permit under a simplified procedure for you and your family. I was specifically interested in real estate investments, and here are the investment options that Portugal has to offer:

  1. Any property in the country for the amount of 500 thousand euros and more.
  2. Investments in real estate over 30 years old for the reconstruction of the cultural and historical heritage of Lisbon and Porto for the amount of 350 thousand euros and more.

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If we consider only the costs of purchase and restoration of the object, the first option would certainly be cheaper. But do not forget that the cost of the object after the restoration in the central area / will increase dramatically. In addition, the real estate market in Portugal shows considerable growth in recent years and, in theory, you can easily count on 8-9% per annum of the investment. Initially, I planned to go in a second way, but things turned out a little differently.

In addition to the simplified process of obtaining a residence permit, the golden visa of Portugal provides several other advantages to the investor, namely:

  • The opportunity to live and work in Portugal without hindrance.
  • The right to enter the Schengen area without a visa.
  • All family members receive residency status as well
  • Free education and health care.
  • The possibility to benefit from a favorable tax regime as long as you stay in Portugal for at least 183 days per year.

The main advantage of the Golden Visa is that it allows you to stay in Portugal for as long as you wish.

And the main advantage, which for many becomes a decisive factor for participation in the program. As an investor, you have complete freedom of movement, so you only need to stay in the country for 7 days a year.

First trip and site selection in Portugal
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First trip and site selection in Portugal

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When all the organizational issues were settled and finally clear which vector to take next, it was time to visit Portugal for the first time. The trip had two goals: register as an official legal entity and choose a suitable property for investment. There is almost nothing to tell about the process of obtaining the first short-term visa: the collection of basic documents, going to the embassy, and waiting for 2 months is all that separated me from the ticket to Portugal.

When the visa was processed, I took the first ticket on the Sheremetyevo-Portela route and set off to conquer Portugal. My first impression of Lisbon was charming: a neat modern city with a lot of cultural background, beautiful architecture, and a gorgeous view of the ocean from almost any vantage point. After Moscow, the local rhythm of life immediately catches your eye. The streets are empty, no one is rushing anywhere, and everything seems to work by some internal clock. By the way, this is the only point that may adversely affect your experience of visiting this country. The first month in Lisbon, I was constantly bumping into closed doors of stores and cafes, but you quickly get used to it.

Selecting a property for investment in Portugal

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While I didn’t want to be distracted from idly wandering through the streets of the capital, I had to do what I came here to do in the first place: choose an object to buy. Let me tell you right away; this process is not easy. During the week, we visited a few dozen apartments and houses in the center of the capital, and at one point, it seemed that this would never end. There were the same problems: small space, bad location, problems with the property design, and so on. And, of course, the main problem was the requirements for restoration. I had seen cases when the cost of restoration was as high as the price of the building or even higher. I started to give up and looked at new sites that did not require an additional investment.

Two days later, I finally found something I liked. A small townhouse in the heart of Alfama, with five rooms, a bathroom, and a beautiful terrace. The property was in excellent condition, with no registration problems, and completely suited to all my needs. The price at the time of purchase was 520 thousand euros, which I was delighted with and, of course, fit the conditions of the immigration program. At that time, I had no plans to open a restaurant there and counted on the massive increase in property prices to resell in five years.

How buying property in Portugal goes
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How does buying real estate in Portugal

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The whole process of buying real estate can be divided into four stages:

  1. Opening an account at a local bank and obtaining an individual tax number NIF. As I wrote above, NIF is necessary for the conclusion of the contract, and we need a bank account, as the purchase of a real estate in Portugal is possible only through non-cash payment.
  2. Further, if you are satisfied with the selected object, you must conclude a preliminary contract and contribute 10% of the transaction to reserve the object.
  3. The next stage I strongly recommend you to pay a lawyer, as now you need to conduct a full legal examination of the property. The seller must provide this set of documents:
  • The property passport (Ficha Técnica de Habitação). Approves the right of ownership. It contains the housing certificate (Licença de Habitação), which confirms that it meets building standards. If you are purchasing a new, newly built property, the passport will list all the construction contractors. If you find faults, faults in communications, you will be able to contact them with claims and correct the deficiencies.
  • Record of the Land Registry (Centidão de Teor). Contains a plan of the plot, the property, its type, and location.
  • Energy Conservation Certificate (Certificado Energetico). Indicates compliance with Portuguese energy consumption standards.
  • Certificate from the tax office (Caderneta Urbana/Rustica Predial). All properties are registered with the tax authorities. For the authorities to calculate the tax, you need this document, which indicates the area of the home, the land, and additional buildings. This same information is contained in the House Book (Caderneta Predial).
  • Certification of the Portuguese Institute for the Protection of Historical Monuments (IPPAR). If you purchase a house that is a historical monument, the local municipality must issue you this document. It must state that there is no prohibition to sell the property.
  1. If everything is in order with the documents, the next step is the completion of the transaction. The money transfer should be made to a special escrow account from which it will come to the buyer.
  2. The last thing left to do is register the purchased object yourself. The whole procedure will occur at the tax office, where you will be registered with the Land Registry (Conservatoria do Registo Predial). There you will also receive a new registration certificate and a house book.

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How I got the idea to open a business in Portugal

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Since I first gave up on the idea of buying a renovation property, one interesting thought hasn’t left me: “If I’m buying a finished property, what’s stopping me from investing in a renovation and trying to open a business in Europe?” It’s no secret that Portugal has been actively creating a favorable environment for starting a business in recent years. Lisbon has managed to be dubbed the world’s startup capital, so why not try to implement it in this direction? And so, the idea was born to convert a townhouse into a small family restaurant. 

How the process of obtaining a residence permit under Portugal's golden visa program went.
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How was the process of obtaining a residence permit under the program “golden visa” Portugal.

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From there, everything went just fine. Under the responsive guidance of the staff from MoveToCascais, I gathered all the necessary documents and applied for the program “golden visa” in Portugal. It included:

  • passport or valid identity document;
  • Schengen short-term visa (proof that you entered the country legally);
  • health insurance (issued within the last three months);
  • certificate of criminal record from the country of residence or origin (issued in the last three months);
  • evidence of compliance with tax and social security obligations;
  • receipt of payment of fees for the Portuguese gold visa;
  • bank statement proving the purchase of real estate.

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The application itself can be submitted online at the Portuguese Immigration and Borders Authority (SEF). Your application will be processed within a few months. In my case, I had to wait 5 months from the date of application. All this time, you can stay absolutely legally in the country. Once all the data is processed, the SEF staff will contact you (or your legal representative) and make an appointment, after which, if all is in order. Your application is approved, you will be mailed a residence card for Portugal.

What plans for the future
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What are the plans for the future

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This is the end of my story. It’s now my second year in Portugal, and everything is going just fine! Even with the pandemic, which has made some adjustments to my plans, I still plan to be black when the borders open. In any case, the amount I spent on opening my business in Portugal has paid off. In the future, I’m thinking about opening a couple more places around Lisbon and maybe even Porto.

In three years, I will have the opportunity to get Portuguese citizenship, and I still haven’t decided where I want to go next. Initially, I planned to become an EU citizen and move to Germany, but I suddenly fell in love with this wonderful country in the last two years. Portugal has become a second home for me, where I can work and live permanently.

УЗНАЙТЕ, ПОЧЕМУ ПЕРЕЕЗД В ПОРТУГАЛИЮ – ОТЛИЧНОЕ РЕШЕНИЕ В 2021 ГОДУ

*Материал отражает историю героя статьи в интерпретации автора; относительно описанных методов и процессов при получении ВНЖ – они могут не совпадать с реальным мнением редакции MoveToCascais по этому поводу. 

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