Newsletter 7 Golden Visas and Other Stories

An increasing number of foreigners want to come and live in Portugal. They come for many reasons: the climate, the friendliness of local people and above all the encouraging tax incentives.

In 2012, the Portuguese government introduced a new measure known as ARI, the Resident Permit for Investment. This permit, also known as the Golden Visa, grants foreign investors a visa waiver in exchange for making an investment in Portugal.

Sun, sea, a good standard of living, a good health system, good housing and above all great tax incentives. Portugal’s potential is known all over the world and many foreigners have chosen this country as their home, especially after more recently, the government simplified the rules for the acquisition of a Golden Visa.

Most foreigners are attracted to Portugal because of the Golden Visa programme and the potential it offers to invest and live here. Looking ahead, Portugal clearly wants to remain competitive and enticing to all foreign investors.

Access to the EU’s market and to the Schengen Space is an enticement for potential Golden Visa holders. The promise of European wide markets and easy movement of people and goods, within the EU borders, attracts investors.

Apart from this, holders of the Golden Visa can also benefit from fiscal advantages under the RNH (non-habitual residents) regime. Please see our previous newsletter, “Portugal – A New Offshore Tax Heaven”, for more information on this regime.

In 2014, Portugal’s tax authority, decided to make changes to the Golden Visa regime by cutting red tape and simplifying it, so that providing proof of previous residency and tax returns (Proof of Tax and Residence), is no longer a requirement. Currently an applicant applying for a Golden Visa has only to prove that he/she has no outstanding legal issues dating back 5 years.

These are not the only benefits of this fiscal regime. One of ARI’s most favorable points is the fact that holders of the Golden Visa – non-EU citizens – are entitled to bring their families to Portugal, acquire a permanent residency after five years and Portuguese citizenship after six.

How does this compare with legislation in other European countries?

Residency incentives for foreign investors are not peculiar to Portugal; other countries such as Ireland, France, Cyprus, Greece and Spain offer comparative enticements.

Ireland, for example, offers Irish residency to applicants who satisfy one of the following conditions: a € 500,000.00 (five-hundred thousand Euros) investment in a government project, a € 1,000,000.00 (one million Euros) investment in a local business venture, or a € 1,000,000.00 investment, divided in half between the purchase of a property and government bonds.

A similar visa in France, can last you 10 years, and can be earned by anyone who makes an investment of € 10,000,000.00 (ten million Euros) or creates/saves over 50 jobs in France, all this providing you are not a national of the following nations: Switzerland, Algeria or any EU countries.

Cyprus is notable for requiring a lower investment, € 300,000.00 (three hundred thousand Euros) and visa holders can benefit from visa-free travel all over the EU. Similarly, Greece requires an investment of € 300,000.00 (three hundred thousand Euros) for this type of visa, but there is no guarantee of citizenship at the end.

Compared to those in other EU countries, Portugal’s Golden Visa programe is the easiest to apply for and the most rewarding.

As in Portugal, Spain also offers residential visas to foreigners buying property with a price tag of more than € 500,000.00 (five-hundred thousand Euros). Visas are also available for people buying over € 2,000,000.00 (two million Euros) worth of government debt. This last option is not available in Portugal.

Number-crunching

From its inception, the ARI/Golden Visa regime has granted a total of 5,553 visas: 2 in 2012, 494 in 2013, 1,526 in 2014, 766 in 2015, 1,414 in 2016 and 1,351 in 2017.

Of this grand total of 5,553 visas the great majority have been granted to individuals buying properties, 5,243 visas. A further 84 were granted to individuals embarking on urban renewal projects, 302 applicants moved capital into Portugal and 8 guaranteed the creation of a minimum of 10 jobs.

Chinese nationals have been granted the largest number of Golden Visas (3,588 up until December 2017), followed by Brazil with 473 visas granted, South Africa (218), Russia (195) and Lebanon (108). 

Since 2013, 9,315 resident visas have been granted to family members: 576 in 2013; 2.395 in 2014; 1.322 in 2015; 2.344 in 2016 and 2.678 in 2017.

Set up with the aim of attracting overseas investment to Portugal, this visa programme has so far been successful in attracting close to 3.5 million Euros to Portugal.

Some Practical Issues

Most individuals, 95%, have acquired the Golden Visa via the purchase of property in Portugal. This has been a boost for the real estate market, especially in major cities like Lisbon and Oporto.

Consequently, Golden Visa applicants are seen as valuable clients by real estate agencies and this is clear from browsing agencies’ websites that publish information directed exclusively at this market.

All the major international real estate agencies are present in Portugal as well as many locally grown agencies. All offer professional guidance to their clients with the warmth and friendliness typical of the way Portuguese people welcome foreigners.

However, for all their good intentions, a real estate agency is only as good as the properties it has on offer and unfortunately this means that many Golden Visa hopefuls have ended up buying properties which are less than prime and not the best opportunities on the market.

Clearly this undesirable result can be avoided if you are able to do some extensive research online and if you are prepared to visit many different properties, but time is money and not everyone has the luxury of spending many hours researching, what is to them a foreign and unknown property market.

This may feel like an exaggeration, but in truth for a British person places like Palmela, Santo Estevão and Alfragide are just a point on a map, just as Surrey, St Albans and Swindon are for a Portuguese person.

Many individuals will resort to their legal representatives to get this sort of advice and to carry out other visa related tasks. Whilst being the right person to advise you on the more difficult aspects of the law in the Portugal and help you with the necessary contracts to buy a property in Portugal, is it really worth paying a solicitor to trawl through property websites, or even to stand in line for hours at an agency for the Portuguese Immigration and Border Services (SEF) to get a your paperwork stamped?

Summing up the benefits for foreign investors in Portugal

• Acquire a residential visa
• Live and work in Portugal, whilst being allowed to maintain residency in their country of origin.
• Move around the Schengen Space with no need for visas
• Bring their families to live and work in Portugal
• Acquire permanent residence rights after 5 years
• Acquire Portuguese citizenship after 6 years.

So which is the best way to proceed?

A sensible way to proceed would be to rely on specialist local advice and reach out to expert locals, who have your best interests at heart, who will work for a fair price and who do not stand to gain from any property you decide to purchase.

This is precisely what is on offer at GETiN Relocation Services: Independent, professional advice! We can help you become acquainted with the areas you are interested in investing in and quickly put together an independent study of the housing market in these areas, we can provide you with expert legal advice on all issues pertaining to your visa and your immigration, through our partnership with a reputable legal firm, we can give you expert financial advice and we can help you settle into your new home.

 If you wish for more information, please contact us.