Why Portugal Is Reforming its Golden Visa Program…
After months of speculation, on July 6 the Portuguese Parliament approved the government’s proposal to end the residential investment option for its Golden Visa.
This was not quite the last nail in its coffin. A final vote on the proposal was initially scheduled for July 19. However, it now appears that the matter might not be completely finalized until early September. So, in theory, it’s still possible to initiate a new Golden Visa application until then.
The term “Golden Visa” refers to any long-term residency permit based on investment. A residential option grants you a visa for spending more than a certain amount on residential real estate.
Portugal’s residential Golden Visa has long been one of the most popular programs of its kind in the European Union. Designed to help boost residential property values after the global financial crisis of 2008, the program succeeded… too well, according to many.
The program also helped public finances in Portugal. Last year, investment from 1,281 successful Golden Visa applicants brought in €654.2 million ($721.1 million).
Pressure to end the program grew in recent years, however. Residential housing costs in the country have more than doubled in the last decade. The EU was also unhappy that more than 80% of residential Golden Visas went to Chinese and Russian nationals, many of whom spent little time in Portugal, instead using residency rights there to settle elsewhere in the EU.
Under the changes to the program, the following transactions will no longer get you a Golden Visa:
- Capital transfers of €1,500,000 or more into a Portuguese financial institution.
- Purchase of a residential property with a value equal to or exceeding €500,000.
- Purchase of a residential property at least 30 years old of €350,000 or more in an urban rehabilitation area.
- Investment of €250,000 or more in artistic or cultural activities.
Existing residential Golden Visa holders will be converted to the D2 (Entrepreneur) visa. In a significant concession, however, parliament agreed to reduce the D2 physical presence requirement for Golden Visa conversions from six months to seven days in the first year, and 14 days in the following two years.
Residential Golden Visa applications that have been accepted for processing will still be granted if successful. Existing visas can be renewed as before. It will still be possible to obtain permanent residency and citizenship after five years of presence in the country under a Golden Visa.
After the changes, Portugal will still have Golden Visas, albeit under the D2 investment visa. Here’s what will get you one of those:
- Any investment that creates at least 10 jobs immediately.
- Any investment that creates or preserves at least five jobs within the first three years.
- A contribution to scientific research of €500,000 or more.
- Investment in Portuguese venture capital or investment funds of €500,000 or more.
These are obviously very expensive and out of the reach of many people. But there are still many easy ways to get a visa in Portugal.
In addition to the D2, Portugal continues to offer the D7 (passive income) and the new D8 (digital nomad) visa. Our editor, Jeff Opdyke, has recently obtained his own D8 visa and will be moving to Portugal this month.
As I’ve noted consistently, these changes don’t reflect any Portuguese hostility to expats moving to the country. The government is simply shifting the emphasis from one-off static financial investments to more consistent long-term contributions to Portugal’s economy and society.
That’s why the D7 and D8 visas, for example, involve commitments to significant physical presence in the country, unlike the residential Golden Visa.
Moreover, anyone who gets a residency permit under the D2, D7, and D8 schemes is free to invest in residential property in the country. But that will now be incidental to their residency rights, rather than the basis of it. Expats with sufficient independent income can still apply for the D7 visa, settle in Portugal, buy property, and live in it.
Plus, none of these changes affect Portugal’s highly attractive non-habitual tax residence program, which grants expats exceptionally low local income tax rates for many years. (For a complete guide to Portugal’s visa options including the Golden Visa—as well as similar visa options elsewhere in Europe—join me, Jeff, and International Living’s other experts for the Europe’s Last Golden Visas online seminar on July 20. Details here.)
Though one of the most attractive Golden Visa options in Europe is soon coming to an end, I’d think of it more as a reform than a complete shutdown of the program. The D2, D7, and D8 schemes are still excellent options for expats who want to live in and contribute to the economic development of their new homeland.
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