Over the past few years, there has been a surge in the number of Americans looking to leave the US. While many are looking to nearby Mexico or Canada, a huge number are interested in moving to Europe to take advantage of the lower cost of living, safety, and access to healthcare.
Naturally, there has been a huge interest in familiar countries like France, Germany, and Spain. However, Portugal has popped up on many American radars, primarily due to the ease of obtaining a residency permit, the lower cost of living, lower healthcare costs, and its reputation for safety.
Of the different visas available, one that is particularly appealing to Americans is the golden visa. This is an investment visa that offers residency in Portugal in return for investing in Portugal. There are a number of investment options available, which can be as simple as purchasing a property in Portugal.
There are a few reasons why the Portuguese golden visa is so appealing:
- Property investment options start from just €280,000
- This visa only requires you to spend an average of 7 days per year in Portugal – ideal for Americans with limited vacation time who want to continue living in the US
- The 7-day requirement is also ideal for those that want to move to Portugal and perhaps spend several months of the year here, but have the freedom to travel as and when they please (other residency permits typically you to spend 8+ months per year in Portugal)
- It’s possible to apply for Portuguese citizenship after just 5 years, giving you an “EU passport” and the right to move anywhere within the EU
The golden visa isn’t the only residency visa available–the d7, for example, is appealing to those with a pension–but it is the only option that allows you to maintain residency in Portugal while only spending an average of 7 days per year here. It’s also one of the best options for those with a cash lump sum that can be invested, either in a property or another form of investment.
Investing in Commercial Property
An increasingly popular option is to invest in a commercial property. These schemes are typically managed by a developer or investment company. A common example is to buy a room, apartment, or share in a hotel that’s being built or redeveloped.
For example, you might see the option to buy an apartment within a resort for €280,000 with an option for the hotel or developer to buy that apartment back from you after five or six years (once you are able to apply for Portuguese citizenship). There’s usually some form of rental income, which is often paid upfront, and many of these schemes allow you to use the hotel for 1 or 2 weeks of the year.
These programs are ideal for those that want to take part in the golden visa program but don’t want the time and money challenges that come with owning a property. As hands-off investments go, it’s at the cheaper end of the scale: while you can invest in one of these schemes from €280,000, investing in a fund or Portuguese company starts at €500,000.
Buying A Second (or main) Home
For many, the most appealing option is to purchase an eligible property in Portugal. This could be used as a main residence, a second home, or a rental property. To qualify for the golden visa, a property normally needs to cost €500k or more, but in some cases the criteria can be reduced to €350k or even €280k.
- €400k if it’s in a low population density area
- €350k if the property is at least 30 years old or in a designated urban rehabilitation area
- €280k if the property meets the criteria for the €350k price and is also in a low-density area
While there are obvious upsides to owning a property in Portugal, from having a base from which to explore Portugal to the possibility of the property increasing in value, the downsides to the property route are the work involved in finding, buying, and maintaining a property. As of January 2022, a number of areas of Portugal are excluded from the golden visa program and properties purchased here no longer qualify. Unfortunately, this includes Lisbon, Porto, and large parts of the Algarve and Silver Coast.
The golden visa program includes a number of different investment options at various price points and investing in real estate is far from the only investment option. However, for obvious reasons, this is the most popular route.
If the real estate route don’t suit, other options include:
- Investing €500k in a qualifying fund (e.g. venture capital fund)
- Transfering €1.5 million to a Portuguese bank account
- Donating €250k to the Portuguese arts, culture, and heritage sector
- Investing €500k in a Portuguese company (new or existing) and create at least 5 full-time jobs
- Investing €500k in a qualifying public of private research institute
The D7: An alternative Visa Route
The golden visa isn’t the only way that Americans can obtain residency in Portugal. Another popular route is through the D7, which is aimed at those with a regular income such as a pension, income from a property rental, or even a salary from a remote job.
For many, the downside of the D7 is that it requires you to spend the majority of the year in Portugal whereas the golden visa only requires you to spend an average of 7 days. If you plan to truly move to Portugal and have the type of income the D7 favours, it’s definitely worth considering, not least because it works out cheaper. However, if you don’t have a regular form of income and want more flexibility to travel, the golden visa may be a much better fit.