The Portuguese Golden Visa Programme has been up and running since 2012. It has contributed to boost the Portuguese economy as foreign nationals, particularly Chinese nationals, have been applying in the masses in order to secure a place on the scheme.

A major reason for the high levels of demand is the number of benefits the Portuguese Golden Visa Programme provides to Non-EEA nationals such as visa-free travel across the Schengen Region and generous tax benefits.

The Programme has seen its fair share of media spot light, with stories about its success as well as a number of corruption allegations. Earlier this summer the Programme was temporarily frozen following a corruption scandal that was alleged to run as high as the Former Interior Minister Miguel Macedo who had been suspected of playing a major role in a money-laundering scandal. The same scandal also saw implicated the former Head of Border Police. The Scheme was officially unfrozen by decree from President Aníbal Cavaco Silva on 16 July 2015.

The Changes

The Portuguese Golden Visa Programme has been twice as successful as its Spanish counterpart, with over 2,000 Golden Visas being issued to date; of the visas granted approximately 1,957 Golden Visas have been issued to Chinese national. The Programme is likely to see another boost to its figures since the Government announced that it will reduce the initial minimum investment of €500,000 to €350,000 for investment in properties located in districts designated for urban renewal (as defined by law), or houses that were built 30 years ago. The recognised value will include the property purchase value plus the investment made for refurbishment works. The move is intended to encourage more investors to buy properties in districts such as Lisbon which is part of a Government backed Regeneration Programme.

In its infancy the Portuguese Golden Visa Scheme saw large numbers of investment activity via the property route, particularly with applicants purchasing properties in the Algarve region. The decision by the Government to push for more investment in designated districts could see such areas benefit with economic development.

Another change to the Programme will see the addition of the following minimum investment categories:

  • A minimum investment of €350,000 into scientific activities;
  • A minimum investment of €350,000 into technological research activities;
  • A minimum investment of €250,000 into artistic production;
  • A minimum investment of €250,000 into maintenance of national cultural heritage; or
  • A minimum investment of €500,000 into small or medium sized businesses

The change has meant applicants have numerous investment options available to them. The Portuguese Golden Visa Programme’s original investment activities options are still a possible means of investment, these options include:

  • Investment in real estate with a minimum investment of €500,000;
  • A cash deposit of €1,000,000 in a Portuguese bank account;
  • Financial Investment through bonds or stocks with a minimum value of €1,000,000; or
  • The creation of a new company with at least 10 employment positions based in Portugal.

In an additional attempt to increase the attraction of the Portuguese Golden Visa Programme the authorities (Serviço de Estrangeiros e Fronteiras, SEF) will be attempting to cut down processing times for initial applications from 4-6 months to a 90 day target. The authorities will also be attempting to have renewal application decisions within 60 days periods.

It should be noted that the Portuguese Golden Visa Programme’s Residency and General Eligibility Requirements do remain in force and should be complied with by any Golden Visa applicant. The residency requirement of the Portuguese Golden Visa Scheme requires that during the first year, an applicant will need to reside in Portugal for at least 7 days and in the subsequent two years, applicants are required to spend at least 14 days in Portugal, totalling 35 days across a five year period. General eligibility requires applicants to be of good character, have no criminal convictions, not be on any Schengen Region alert lists and not be subject to alerts in SEF’s Information Integrated System for the purposes of non-admission into Portugal.

Impact

Despite having one of the leading European investor schemes, the Portuguese Golden Visa Programme has seen a slight drop in its figures as new investor schemes across Europe are opening up and attracting some business away from the Portuguese Scheme. Additionally the temporary freeze of the Scheme during the summer did slow down the level of demand. However, the new categories of investment will provide a new stream of investors resulting from the reduced financial burden on applicants.

Since the launch of the Scheme in October 2012 and the end of June 2015 the Portuguese Golden Visa Programme has seen €1.47 billion of investment of which €1.33 billion (90%) was made through the purchasing of real estate.

Following the recession of 2008 that saw much of the Portuguese capital, Lisbon in need of investment and development, the introduction of the scheme provided billions of euros of investment into the country, which has meant that Portugal is now growing economically and the Organisation for Economic Cooperation and Development (OECD) has predicted that:

“The [Portuguese] recovery is projected to strengthen on the back of strong external demand, a weaker euro and lower oil prices. Domestic demand has started to rise, and business investment is projected to pick up further in 2016.”

With the addition of the reduced processing times, generous tax benefits, visa-free travel across the Schengen Region and an excellent weather climate, the Portugal Golden Visa Programme provides a unique opportunity for those wanting to secure a second passport.