Golden Visa 2024: Investment Opportunities in Portugal’s Revised Program

For those who hope to secure a European Union passport and enjoy the benefits of EU living, Portugal remains a sought-after destination as of 2024. At the forefront of this pursuit is the Portuguese Golden Visa scheme, offering a way for non-EU citizens to obtain their residency and, eventually, citizenship through qualifying investments in the country. However, recent years have witnessed substantial changes to the program. These amendments impact the initiative’s eligibility criteria, investment options, and the application process.

The end of real estate investments

Perhaps the most significant and contentious alteration to the Golden Visa program occurred with the cancellation of real estate investments as a valid option for obtaining the visa. Introduced on October 7, 2023, as part of the Mais Habitação legislation, this move aimed to address housing shortages and affordability challenges in Portugal.

The Mais Habitação bill, geared toward increasing rental housing supply, limiting rent hikes, and combating real estate speculation, explicitly excluded real estate purchases from the Golden Visa program. This transformation departed from a historically famous investment opportunity, dating back to the program’s adoption in 2012.

The Portuguese government justified the change by redirecting foreign capital towards innovation, research, culture, and social projects. It asserted that the Golden Visa program had contributed to property price inflation, particularly in Lisbon and Porto, adversely affecting local affordability.

However, the decision was met with staunch opposition from the real estate sector. Concerns were raised that this change could dissuade foreign investors and undermine Portugal’s competitiveness as a residency-by-investment destination.

The exclusion of real estate investments only affected new applicants who registered as tax residents in Portugal after October 7, 2023. Existing enrollees and those who wrote before the deadline retained the current benefits until the expiry of their 10-year period.

The rise of investment funds

Despite the discontinuation of real estate investments, the Golden Visa program still contains alternative options for applicants seeking residency and citizenship in Portugal. As of 2024, the most favored choice involves investments in venture capital or private equity funds.

This option requires a capital transfer of EUR 500,000 or more for participation units in funds registered and operating in Portugal. These funds must allocate at least 60% of their assets to companies or projects based in Portugal, adhering to specific duration, management, and objectives criteria.

Investing in funds offers several advantages:

• Passive Investment: Investors are not obliged to actively manage the fund, with fund managers handling all aspects.
• Diversification: Investments span various sectors, markets, and opportunities, minimizing risks and enhancing potential returns.
• Flexibility: Investors can choose from various funds aligning with their preferences, goals, and risk tolerance.
• Transparency: Regular reports and updates on the fund’s performance, activities, and portfolio are available to investors.

According to some reliable service providers, investment funds account for most new applications in 2024.

The future of the Golden Visa program in Portugal

Despite the changes in 2023 and 2024, the Portuguese Golden Visa program remains one of the world’s most attractive residency-by-investment schemes. It continues to provide highly appealing benefits for investors:

• Efficient Application Process: Simple and relatively fast, this procedure may often be completed in as little as six months, contributing to the five-year qualifying citizenship period.
• Minimum Stay Requirement: Investors only need to spend seven days per year in Portugal and are allowed to maintain commitments elsewhere.
• Quality Lifestyle: They enjoy access to excellent healthcare, education, infrastructure, services, a mild climate, and a welcoming population.
• Powerful Passport: The Portuguese Golden visa grants investors and their family members the right to live, work, and travel freely in the EU, with visa-free access to over 180 countries worldwide.

However, with potential reforms contemplated by the Portuguese government, the future of the Golden Visa program in Portugal remains uncertain. This is what some of the anticipated scenarios include:

• Increased Minimum Investment: Depending on the investment type, the corresponding minimum investment amount may rise from EUR 500,000 to EUR 1 million. This change is intended to redirect foreign capital to other sectors of the economy, such as innovation, research, culture, and social projects, and reduce the pressure on the real estate market, especially in the urban areas of Lisbon and Porto. However, it may also deter some investors looking for more affordable and accessible options and affect the competitiveness of Portugal as a destination for residency by investment.
• Revised Eligible Activities: Certain activities risk being excluded or limited. Here belong donations to arts, research, social projects, or company creation. In the future, the government may revise and update the list of eligible activities and exclude or limit some based on their impact, relevance, and feasibility. This way, donations to arts, research, or social projects may be subject to stricter criteria or lower quotas, and company creation may require more evidence of job creation, innovation, or social benefit.
• Introduction of New Requirements: Additions like language tests, cultural integration courses, or background checks are a real possibility. These requirements ensure that the investors have a genuine interest and commitment to Portugal and respect the country’s values, laws, and customs. The Portuguese government may introduce the above requirements to enhance the quality and security of the Golden Visa program in Portugal and address some of the criticism and controversy it has faced from other EU countries and international organizations. On the other hand, the new demands may pose challenges and difficulties for investors, especially if they are not fluent in Portuguese, unfamiliar with the culture, or cannot provide clear and valid documentation.

Given this uncertainty, potential investors are advised to act promptly and apply for the Golden Visa program before further changes occur. This proactive approach guarantees you will obtain residency and citizenship rights in Portugal under the existing rules, allowing you to enjoy the benefits of EU membership as a qualifying investor and contemplating business expansion or residency in Portugal. For the best outcome, contact International Wealth experts through our website today for comprehensive guidance and assistance!