Portugal Just Moved the Goalposts

Why Portugal Just Slammed the Brakes on Citizenship

Well, it’s official: It will now take 10 years of legal residence instead of five to become a citizen of Portugal.

Ever since demand for Portugal’s groundbreaking Golden Visa peaked a few years back, the country has quietly tightened its immigration rules.

The most recent change is the most controversial yet.

A brief recap: For an investment of typically €500,000, a non-EU citizen can get a renewable five-year residency permit. The permit doesn’t require that one live in Portugal, so you can avoid becoming a tax resident. And until the recent change, those five years counted towards naturalization as a Portuguese—and therefore European Union—citizen.

The fact that the Golden Visa duration and the timeline for naturalization were the same made it an ideal Plan B for those looking for a second passport. Hundreds of thousands of foreigners sought Golden Visas for the primary purpose of eventually becoming an EU citizen… “remotely.” Dozens of Portuguese investment firms launched funds to attract capital from potential immigrants.

Alas, the winds of change eventually blew into Portuguese politics. The populist party Chega campaigned on tighter immigration controls, including cultural assimilation, stiffer language requirements, and a longer timeline to citizenship. Its growing electoral success forced both the center-left Socialists and the center-right Social Democrats to adopt tighter immigration controls. The doubled timeline to naturalization was one of them.

The new rules have caused an uproar on two fronts.

First, the Portuguese immigration industry has had the rug pulled out from under it. A 10-year timeline plus the typical three-to-four-year processing period for Golden Visas has made the country relatively unattractive to potential investor immigrants.

Second—and of more concern to immigrants themselves—the government didn’t grandfather in existing Golden Visa holders. People who spent half a million euros plus fees to get Portuguese residency are now looking at many more years before they can naturalize as citizens. Last week, a group of 500 visa holders sued the government on the grounds of administrative unfairness.

Sadly, the biggest damage is to Portugal’s reputation. There’s nothing worse than the perception of legal instability and capricious rule changes. (I’m struggling to think of a comparable situation where existing visa holders weren’t grandfathered in.)

Of course, for people looking to retire in Portugal on a D7 visa, nothing—other than the timeline to citizenship—has changed. It’s still a great place to live, with amazing culture, food, and great property opportunities in the right places.

But for people looking to become an EU citizen, it may be time to look elsewhere. 13 countries in the EU still have a five-year timeline to naturalization. They include popular destinations such as France, Ireland, Malta, and Germany, as well as rising destinations—the Czech Republic, Poland, Bulgaria, and Latvia.

But the Portuguese case illustrates the importance of deeper intelligence. It’s not enough to know what the rules are right now; it’s critical to know how political developments might change those rules in future. It’s also important to understand how countries actually apply their rules.

For example, France offers the possibility of citizenship after five years legal residency… at least in theory. In practice, however, Paris rarely grants citizenship to people who’ve never worked or invested there. People who live as retirees on its popular long-term visitor visa, for example, are rarely approved.

In other cases, such as Poland and Bulgaria, the timeline to naturalization assumes that you’ve already become a permanent resident. In Latvia and Hungary, language issues often trip up prospective citizens. In the Netherlands and Spain, dual citizenship isn’t allowed.

Fortunately, that’s my role here at International Living. I keep tabs on countries all over the world that offer exciting residency and citizenship options. If anything changes, I’m usually one of the first to know.

So, if you’re thinking about pursuing long-term residency or a second passport, whether in Europe or other parts of the world, be sure to talk to me first.