Investing In A Hotel For Portugal’s Golden Visa

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James Cave / Last Updated: January 20, 2023 / Posted in: Visas & Residency

While residential property is by far the most popular golden visa investment choice, investing in commercial properties such as a hotel redevelopment project is ideal for investors who are simply looking for one of the quickest and most affordable ways to obtain the golden visa and get on the path to Portuguese citizenship – all while only having to spend an average of 7 days per year in Portugal.

Portugal’s golden visa is famous for offering the right to residency in Portugal in return for making an investment in Portugal. This visa only requires you to spend an average of 7 days per year in Portugal over the 5 years, after which point you’ll be eligible to apply for both permanent residency and Portuguese citizenship. While most people buy a residential property, another option is to invest in commercial property such as a hotel redevelopment project.

This option typically means purchasing a room, apartment, or share in a hotel or resort that’s being built or renovated. Renovation projects are especially common as, due to the golden visa rules, this allows the developers to sell the rooms for cheaper: rather than having to invest the full €500,000, if the property is in need renovation and within a “low-density” region, the golden visa investment requirements could be as little as €280,000.

Who this route is likely to appeal to

If your goal is to move to Portugal straight away and spend the majority of the year here, this route may not be the best option for you. However, the commercial property route does appeal to certain people, such as:

  • Those that don’t plan to move to Portugal any time soon, or even spend a great deal of time there.
  • Those that want to obtain the Portuguese golden visa and eventually Portuguese citizenship, but don’t want the hassle of owning a property abroad (or even just finding a property abroad).
  • Those that aren’t interested in owning a residential property in the interior of Portugal, Madeira, or the Azores, all of which are areas that still qualify for the golden visa.
  • Those that want one of the cheapest possible routes to the golden visa.
  • Those that want to start the golden visa process (and in turn, the path to Portuguese citizenship) as fast as possible.

What a Typical Hotel Investment Looks Like

There are a lot of these hotel redevelopment projects and they all differ, but some common features include:

  • Entry price point of between €280,000 and €350,000 (although you will also find some around the €500,000 mark)
  • Rental income is sometimes paid upfront, thereby reducing the cost of the golden visa investment (an apartment might cost €280,000, but you’re given 15% back within two weeks of purchase, for example)
  • A buyback (often guaranteed) at the end of the 5 or 6-year period
  • Ability to stay at the hotel for 1-2 weeks of the year (allowing you to fulfill your golden visa physical stay requirements)

Investing in a Hotel Versus Buying a House

Why invest in an apartment within a hotel when you could buy a golden visa property for €280k yourself? There are a number of reasons, depending on the investor, but this option appeals to people that only want to spend a few days or weeks per year in Portugal, and want an investment that’s as easy to manage as possible.

Here are some reasons to invest in a hotel as opposed to purchase a residential property:

  • You don’t have to worry about utilities, leaky pipes, break-ins, and all of the other challenges that go with owning a property – especially one in another country.
  • You don’t have to deal with tenants or find a property management company to manage your tenants.
  • Portugal’s property market is popular, and it can sometimes be hard to find a decent residential property for €280k or even €350k.
  • €280k and €350k properties typically require renovations, which you either have to do yourself or find a contractor to handle – which means hassle.
  • It can work out more affordable. As well as the benefit of the up-front rental income payment, this option doesn’t come with the additional costs that come with buying and owning a property, which can quickly add up.
  • Your hotel or apartment could be in the sunny Algarve or trendy Lisbon as it’s a commercial property whereas residential property in these areas generally don’t qualify for the golden visa anymore.
  • You have the potential to earn an income from the property, which is sometimes paid upfront.
  • There’s usually a buyback option, making it easy to sell the property once you’ve obtained citizenship.

Of course, if you’re planning to move to Portugal rather than just spend the required number of days here, you may want to purchase a property you can live in instead. However, for many people, the appeal of the golden visa over other residency visas is not having to move to Portugal yet still having residency. 

Hotels Versus Funds

The hotel option isn’t the only hands-off approach to investing in the golden visa and another popular option is to invest in a fund. As with hotels and resorts, there are a number of investment companies that offer funds that golden visa applicants can invest in, typically in areas like startups, small business, and real estate. And, like hotels and resorts, many have a buyback option after around six or seven years. 

In 2022, the cost of investing through a fund to obtain the golden visa increased for €350,000 to €500,000. Considering you can invest in a hotel redevelopment program for €280,000 or €350,000, it isn’t surprising that this has made the fund option less attractive.

Another benefit of a hotel or resort over a fund is being able to visit the hotel and enjoy it. Most hotel investment options allow you to spend a few weeks of the year at the property, should you wish to. The golden visa requires you to spend an average of seven days per year in Portugal and, although you don’t have to spend it at the hotel, it’s nice to have somewhere to come to every year or two. 

FAQs about Investing in a Hotel for the Golden Visa

The following questions and answers were transcribed from a video interview. Small changes have been made to the transcription to improve the readability. 

Is there any difference between investing in a hotel at €280 and €350, or should I just go with the cheapest option?

There are three golden visa price points for property – €280k, €350k, and €500k – but the difference, generally, between €280,000 and €350,000 is whether the property is in a low-density area or not. 

At €280,000, the main difference is that you need less capital to obtain the golden visa. At €350,000, there are more incentives such as a higher rental income or incentives around the property taxes. The more you spend, generally, the more incentives there are. 

As of January 1st 2022, the golden visa rules changed and you can now no longer purchase residential property in the main city centre (e.g. Lisbon and Porto) and many of the seaside towns. Since then, we’re talking much more about property as a financial investment and much less as an emotional investment. 

Cost-wise, what are the differences between buying a property for €280k or €350k and investing in a golden visa hotel for the same amount?

One of the main selling points of the golden visa is that you only need to spend an average of 7 days per year in Portugal so, understandably, many people aren’t looking to own a residential property in a country where they’re only going to spend a minimal amount of time. Given that, most people want a property that’s able to generate some income, which might not be the case if they own a residential property in inland Portugal. The deciding factor isn’t necessarily which one costs the least but which route makes more sense to go down. But legally and financially, there aren’t huge differences between the two. 

What are the pros and cons of the hotel investment route versus investing in a fund? 

The fund option used to be more popular due to various factors but the main factor is that investing in a fund now requires almost twice the capital of investing in property (€500k versus €280k). The other risk of going down the fund route is that you don’t have any guarantees and you’re investing into funds that could go up or down in value. If you’re not an experienced investor, it could be nerve-wracking to see your life savings go up and down in value. However, on the plus side you can make good returns. It’s the age-old question of risk versus reward. 

Other benefits of the hotel investment route is that you often have the buyback option and you can stay in your property when you come to visit Portugal. Most people are more familiar with owning property than investing in funds and so this is usually the more comfortable option. 

What are the pros and cons of choosing a property that’s under construction or being renovated versus one that’s already operational?

The short answer is that they’re different developments at different stages of the renovation process. Some developments are literally still a plot of land whereas others are currently operational. 

What am I actually buying? Will I own the deed to a hotel room or apartment or will I own a share in the hotel?

It varies depending on the agreement. 

With a hotel share, you literally own a share of a hotel or development. With an apartment, you own a physical apartment. Another difference is that buybacks are more likely to be mandatory when it’s a share as opposed to an apartment or room. 

One of the benefits of the hotel share option is that developers often allow you to stay at any of their hotels in Portugal rather than only a specific hotel or apartment. This can allow you to visit a different part of Portugal each year, depending on where the developer has hotels. 

With apartments, there is often more room for rental returns and being able to make a profit should you wish to sell the apartment on the open market. Buybacks are more optional here, so you’re more likely to have the option of holding onto the apartment should you wish to do so. However, if properties go down in value, you often still have the security of being able to use that buyback and sell your property at a fixed rate. 

Am I better choosing a property that offers rental income or a discounted rate (e.g. paid IMT)? 

Ultimately, you need to decide which one is more profitable overall. Sometimes the choice isn’t as simple as doing the maths – you need to factor in where you’re a tax resident as well. For example, for American clients rental income will be taxable at US rates and a deduction in costs may make more sense. 

How do I do due diligence on the developers? Is my investment protected and what happens if the developer goes bust?

One of the differences between Holborn Assets and other golden visa companies is that Holborn Assets is a global wealth management company with more than $3 billion under management. We do extensive due diligence before ever suggesting a developer to a client because we not only have to protect our clients’ money but also our own reputation. Naturally, you will have a lawyer look over your contracts as well, as you would with any property purchase. And I can happily say that Holborn Assets has a 100% track record to date. 

What costs such as property taxes, VAT, and capital gains need to be factored in when investing in commercial property for the golden visa?

Property taxes are a factor, however, some developers will pay the property and transfer taxes. This is particularly common with hotel share investments. 

Management costs aren’t usually a factor during the first five years of ownership at least. If you decide to keep the property after that, you may need to pay a management company to handle the rental side of things. This is normally around 40-60% of the rental income for a fully-managed service but, again, this usually isn’t a factor during the initial five years of ownership. 

If you do sell for a profit, you can expect to pay capital gains tax. Often if you’re executing the buyback, you’re not making a profit so you won’t need to factor in capital gains tax. This might be different if you’re selling it on the open market, however. 

Rental income does need to be factored in. However, it can vary from development to development. If it’s a case that the rental income is paid upfront then it’s often a case that the tax is also paid upfront. 

Who buys the property (or share) back?

Actually, it’s not technically a “buyback” but a “forward contract” and it varies from agreement to agreement. The forward contract is normally with a property fund or group, for example, who want the properties as income generators for their portfolio. If it’s a hotel share, the contract could be with the hotel or developer. 

What’s the difference between an “optional buyback” and a “guaranteed buyback”?

To have a buyback or a forward contract is a great thing as it means in the worst case scenario you can sell the property for what you paid. A buyback is often guaranteed, however can be mandatory or it’s optional. If it’s mandatory, it means that you have to sell the share or property at the end of the period and you can’t hold onto it. An optional buyback gives you the option of selling it or keeping it. After the 4th year, the buyer must choose if they wish to execute the buyback clause at the end of the term.

If you think property prices aren’t as strong as what they were and you have the option of selling at the price you paid, that can be worthwhile. However, if prices are up you may decide to hold onto it or sell it on the open market. 

Who typically buys the property if it’s on the open market?

It’s probably unlikely to be another golden visa investor, partly because the Portuguese government has suggested they’ll end the program and In five years’ time, it’s unlikely the program will still be going. It’s much more likely to be someone looking for an investment that can earn money from Portugal’s tourism market. 



  1. One thing to be aware of is that some of these hotels only pay rental income once the hotel is running and operational. Over the past few years many hotels have had their renovations delayed due to covid and everything else. Some also have disclaimers based on having a certain number of visitors.

    Another issue is tax. Getting paid 3% or whatever is great but will you have to pay tax on that? If you're from the US or another country will you have to file a return there too? It depends on the numbers and each hotel is different but I am tempted to look at properties that offer a discount on the price rather than pay the rental income or dividends.

  2. I guess the challenge with the commercial property route and the funds route is that your money is wrapped up with a company for 5 years. I don't recognise any of those fund names. Vanguard isn't on there for example. Neither do I recognise any of the developer names although they may be big names in Portugal, I don't know. You basically have to pick a big developer and trust that they're managing their finances correctly as you're relying them for the buyback. This buyback isn't government guaranteed. It's guaranteed by that particular developer.

  3. We are interested in investing in a hotel option but don't require the use of the property for the 2 weeks they are offering as we prefer to come to Portugal and travel around. Can we "sell" those dates to the hotel?

    • As all of these schemes have slightly different terms and conditions, this is something you could discuss with the investment company or developer to see if they can offer you a slightly different deal based on your needs.

  4. So as far as I can see you basically give your money (around €300k) to a company and five or six years they give it back to you when you are able to apply for citizenship. They get an interest-free loan essentially. You probably lose out on some growth as you're getting around 3% back in rental income, but could probably get more if you bought a house and got the capital appreciation as well. But you would have a lot more costs owning a house and you would probably pay capital gains tax on any increase in the house not to mention the costs of renting it out.

    There's also less risk than the funds. I didn't see any funds I liked and there was a big possibility that they could have nose-dived whereas this doesn't have that same risk. Overall I think it's a good option and I will consider it.

  5. Does buying an entire hotel that requires renovation qualify?

    Or, only individual room/apartment within an existing hotel.


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