Since the inception of the golden visa programme, (Autorização de Residência para a Atividade de Investimento, ARI) in October 2012 and up until February of this year, 7,208 residency permits have been granted, 4,159 were granted to Chinese citizens alone, according to SEF, the Portuguese Foreigners and Borders Service. If you add to that the 12,254 additional permits given to family members, the total granted totals 19,462.
According to SEF, golden visas have yielded an investment of 4.4 billion euros, of which the lion share, 4 billion, has been invested in real estate and a little over 415 million as a transfer of capital
This alone represents a huge investment, but these numbers do not take into account other gains for the Portuguese state, namely property taxes.
Below are some figures that GETiN has calculated based on fees accumulated by SEF for issuing golden visas (GV) and payments made on property tax by new residents.
The Portuguese state has collected a total of 332 M € in taxes, from applicants, family members and property taxes.
It should be noted that this is the initial revenue collected by the Portuguese state. There will be further revenue as the visas need to be renewed every two years and municipalities collect property taxes annually.
Lastly, there is what can be called “Marginal Investment”, this investment is not itemized by the state, but this is also a considerable source of revenue. Tax contributions from the construction and real estate sectors as well as law firms and the service industry (GETiN fits into this latter category), fuelled by the golden visa programme are important. If we take this economic activity into account as part of the golden visa economic effect, then the overall benefits far outweigh the negative stories of possible corruption, money laundering and security risks mentioned in the press.
This is not to say that we should not be paying attention to potential security risks, money laundering, tax evasion, etc. and all these risks highlighted by Members of the European Parliament, largely affiliated to the Progressive Alliance of Socialists and the United Left. It is clear that we absolutely must pay attention to these risks and problems and effectively catch and punish those that attempt to break the law.
However, the reality is that 99.9% of people who are using their savings to have access to a European country are looking for an alternative for themselves and their families due the uncertainty and upheavals in the countries they live in, such is the case for people coming from China, the Middle East or South America. They are looking for a European quality of life and often somewhere to peacefully spend their autumn years. It is no coincidence that Europe has been rated as one of the most peaceful places in the world and as offering a high quality of life, consistently for the past 80 years.
Greece is an interesting case in point, where the radical left government of Syriza has adopted a golden visa programme despite condemning the principles behind the idea. Notably, its programme offers the lowest financial threshold (250K). Greece, in fact, actually attracts more investors than Portugal and Spain. It would seem that Syriza has carefully weighed the pros and cons of the idea!
As a direct result of the Greek government’s policies, there has been a noticeable shift of golden visa applications towards Greece, especially those coming from China. Their success in attracting applicants, however, has resulted in a back log as the authorities struggle to process so many requests. As a result, waiting time for a visa in Greece can take as long as 2 years.
The current government in Portugal supports the recommendations made by the European Commission in their press release of 23 January. Already in October 2018, the Minister for Foreign Affairs spoke in the Portuguese Parliament about the need to make changes to the current laws governing the golden visa programme. These changes, when they come, will probably make the process of application more arduous, but on the other hand, because of its success, it could mean that the only changes we see will be increases in fees and taxes.
Presently, the wait time for a golden visa in Portugal in anything up to a year, a lot more time than the initial projection of 4 to 6 months.
For now, there have been no changes to laws that govern the granting of golden visas in Portugal, but changes could come. The European Parliament is now debating an idea for a European wide system of control and verification of all the different golden visa programmes, currently functioning in nine EU countries. This new system will undoubtedly further bureaucratize the process and lengthen waiting periods.
How can you avoid getting caught up in these possible changes? Start your application process now! Any changes that are made to the golden visa programme in Portugal will take a while to be implemented and they will not be enforced retroactively, so any applications made now, will not be affected later.
Once your application has been submitted and accepted, you have a contract with Portuguese state to grant you a golden visa, in accordance with the current legislation and providing you continue to fulfill all the requirements (investments, no criminal record, etc.) and the same applies to family members.
So, in order not to get caught up in changes to the current system or to the government (2019 is an election year for Portugal and for the European Parliament) it’s advisable to take decisions and act quickly.