Deal: For those that want to purchase a managed rental, Holborn Assets are selling golden visa-qualifying units starting at less than €300k. See here for details.
The Portuguese golden visa is one of the most popular golden visa schemes in the world, offering residency in Portugal in return for making an investment in the Portuguese economy. Investment sounds like a scary word, but it can be as simple as buying a property here.
Portugal isn’t the only country that has a golden visa program. Lots of other European countries, like Malta, Spain, and Greece, have one too. But although these schemes have a lot in common, the Portuguese scheme has been very popular for a number of reasons:
- Investment starts from as little as €250,000 (with property starting from €280,000)
- Both a permanent residency and a citizenship application can be made after just five years
- The minimum stay requirements (days you have to be in Portugal) average just seven days per year
- You aren’t required to become a Portuguese tax resident (although you can, and take advantage of the non-habitual residency program)
- There are lots of options, from buying a property to simply transferring money to a Portuguese bank account
But, changes are afoot! Although the scheme has been popular with investors, it has generated a lot of criticisms. One of the biggest is that many feel it has contributed to rising property costs, particularly in places like Lisbon and Porto. The Portuguese government has delayed making changes to the visa for quite some time, but those changes are finally being introduced on January 1st, 2022.
If you want to take advantage of the golden visa the way it is now, you will need to have submitted an application before the end of the year. And if you want to join the visa by buying a property, there’s an even shorter timeframe simply because of the amount of time it takes to find a suitable property.
With that in mind, here are some of the biggest changes.
Properties purchased in Lisbon, Porto, and Coastal Areas will no longer count
The most popular option in the golden visa scheme is to purchase a property. Normally the property needs to cost €500,000 or more but can cost €350,000 if it’s over 30 years old or an urban development project. If the property is in a low-density area, the price can be reduced to as little as €280,000.
However, as of January 2022, properties purchased along the coast (including the Silver Coast and Setúbal) and in Lisbon and Porto will no longer count. This will come as a bit of a blow to those who wanted to purchase a golden visa property and use it as a rental as these locations, particularly Lisbon, are incredibly popular with tourists and expats. The Portuguese government now wants to use the success of the golden visa program to drive investment to the islands (Azores and Madeira) and the interior.
Obviously, if you’d ideally like to purchase a property in one of these areas, you should do so before the end of the year. Travel is still slightly complicated, but you can speed the process up by using a buyer’s agent or even investing in a development scheme, such as this one from Holborn Assets.
It’s not all doom and gloom for investors, though. Areas like the Azores were predicting a tourism boom pre-covid and many Algarve concelhos (parishes) will still be included including Alcoutim, Aljezur, Castro Marim, Monchique, and Vila do Bispo. Madeira, the Douro Valley, and the area around Peneda-Gerês (all popular areas) will also still count. The full list of regions can be found on pages 2-4 of this document.
And for those that want to buy properties to live in, the interior parts of the country and the islands, particularly the Azores, are much less touristy and offer a more authentic slice of Portugal.
Minimum investments in funds will increase from €350k to €500k
Another popular option is to invest in a fund, such as a venture capital fund. Although this doesn’t buy you something tangible like a property, it’s a hands-off investment that’ll hopefully grow during that period and should come with fewer costs and challenges. Currently, that investment has to amount to €350,000 or more but, as of January 2022, the minimum will be €500,000.
The research and development investment option will increase from €350k to €500k
Just like the funds investment option, the option to invest in research and development will increase from €350,000 to €500,000.
The capital transfer option will increase from €1 million to €1.5 million
Similarly, the capital transfer option will increase from €1 million to €1.5 million. Currently, it’s possible to transfer €1 million to a Portuguese bank account and qualify, which is one of the quickest and easiest ways to join the scheme. That amount will, unfortunately, also increase next year.
The minimum incorporation amount for the company and job creation option will increase from €350k to €500k
For entrepreneurs, the biggest change comes from the job creation option which offers investment in return for incorporating a company with at least €350k and creating five jobs for locals. As of 2022, that amount will increase to €500k, but the number of jobs you need to create will remain at five.
The golden visa isn’t the only visa for entrepreneurs – there’s also the D2 and the startup visa – but the golden visa comes with other benefits like only having to spend a minimum of seven days in the country.
What’s not changing
Although there are some changes coming to the golden visa scheme, some things won’t change.
You can still…invest €250k in the Portuguese arts and culture sector. This hasn’t been a particularly popular option as most people want to invest in something where they’ll see a financial rather than a cultural return.
As mentioned, there are also other visas. Two other popular options include the D7 and the D2. You can read a comparison of those two visas and the golden visa here.