Portugal Golden Visa
Changes beginning January 1, 2022
The Portuguese government has introduced new rules regarding the “Golden Visa” of Portugal. The new Portuguese law restricts the “qualifying” zones for investments in real estate in Portugal, as well as making investment opportunities more expensive. The changes took effect on Jan. 1, 2022.
The Portuguese government attributed the changes to the need to evenly distribute foreign investment to other regions of Portugal. As the Lisbon and Porto real estate market has flourished, the government has now focused on developing the real estate market in Portugal’s interior.
Changes in real estate
- Investors cannot invest in residential properties in popular urban areas such as Lisbon, Porto and Algarve as well as in coastal cities such as Setubal and the Silver Coast.
- Applicants can only purchase residential property in certain interior Portuguese areas for at least €500,000 or €350,000 when investing in a rehabilitation project. If the residential property is located in an area of “low population density,” a 20% discount applies.
- Investors can purchase commercial property anywhere in the country for at least €500,000 or €350,000 if they are investing in a commercial property rehabilitation project. If the commercial property is located in an area of low population density, a 20% discount applies.
- Investors can purchase residential and commercial property on the autonomous islands of Portugal Madeira and the Azores with a minimum value of €500,000 or €350,000 when investing in a rehabilitation project.
Changes in the form of capital transfers
- The requirement for the amount of capital transfer has increased from €1 million to €1.5 million.
- The minimum subscription requirement for an investment fund increased from €350,000 to €500,000.
- Investments in scientific research increased from €350,000 to €500,000.
- Investments in existing registered businesses in Portugal increased from €350,000 to €500,000
- The €250,000 donation for art remains the same.
It’s important to remember the difference between hinterland and low-density areas.
What can investors expect from the changes under the 2022 Portugal Golden Visa program
Although shareholders opposed the changes, they are not necessarily seen as “good” or “bad.” On the contrary, Portugal’s “golden visa” changes are designed to stimulate investment in the interior of the country, easing pressure from metropolitan areas and encouraging foreign investment in other parts of the country.
Some experts predict that alternative investment avenues to obtain a Portuguese residence permit will become more popular, namely the investment fund option.
What has not changed in the program for obtaining the Golden Visa Portugal?
The following Golden Visa investment opportunities are unchanged:
- To launch the company in Portugal and hire at least ten new local employees.
- A contribution of €250,000 to the arts.
Will the changes in the Portugal Golden Visa program affect existing investments in Porto and Lisbon?
If you are in the process of acquiring a property in a thriving urban area, you will not be affected by the changes in the Golden Visa Portugal program. However, if you are interested in buying property in Lisbon, Porto or some areas of the Algarve, you can only buy commercial property, not residential.
Other Golden Visa investment routes will not be affected by the visa update and will remain available. If you are not particularly interested in investing in real estate, the Portugal Investment Fund Gold Visa is a very attractive investment route. With a minimum investment of €500,000, you can become a resident of Portugal with the Portugal Investment Fund.
The advantages of the "golden visa" Portugal
The Portuguese Golden Visa program is the ultimate path to citizenship. Under this popular program, Portugal offers a residence permit in exchange for a significant investment in the country. After five years, this residency permit can be converted to Portuguese citizenship if the usual criteria are met.
The advantage of obtaining a “Golden Visa”over other arrangements is its flexibility. With a Golden Visa, you do not need to move to Portugal (unless you want to). You just need to spend seven days in Portugal the first year and a total of 14 days every two years until you reach the five-year milestone.
The Golden Visa offers several different investment options, many of which can bring you a decent income while you accumulate years for citizenship. For example, the most popular way is to invest in real estate, which can be residential or commercial (usually hotels). This route is the easiest if you plan to actually live in Portugal, although you can also rent out the property on a Golden Visa.
The standard minimum investment threshold for a Golden Visa for real estate is €500,000. At this level, you can buy property in any part of Portugal or the autonomous territories (Madeira and the Azores), but Lisbon, Porto and some parts of the Algarve are now excluded from the program.
There are several lower thresholds in real estate. If you choose to invest in a rehabilitated property (over 30 years old and located in a rehabilitation area), the minimum threshold drops to €350,000.
In low-density areas, the standard threshold drops to €400,000 and for the rehabilitation option to €280,000. However, properties in these categories can be difficult to find and difficult to obtain. In practice, most Golden Visa applicants choose the easy route of €500,000.
Real estate is not the only option for obtaining a Golden Visa. You can also start your path to Portuguese citizenship with several other types of investments, such as:
- €500,000 invested in Portuguese venture capital or private equity funds;
- transfer €1.5 million in capital to a Portuguese bank;
- creating a Portuguese company and creating at least 10 jobs (or five jobs in a low-density area);
- €350,000 investment in research projects;
- €250,000 investment in national heritage or artistic/cultural projects (in practice, this route is rarely used and it can take a very long time to find a suitable project).
The investment funds route is simple and is an excellent alternative to real estate for those who want maximum flexibility, a faster investment process, and do not need to live in Portugal. Other routes are less common and can be more complicated.
Before applying for a Golden Visa, you need to make a successful investment. In the case of real estate, this means finding a suitable property and taking possession of it. In the case of investment funds, this simply means transferring money into the fund.
After obtaining the Golden Visa, you will have visa-free access to the Schengen area, and after five years you can obtain Portuguese citizenship.