Obtaining Portuguese Citizenship By Investment

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There are many ways to obtain Portuguese citizenship, including through parents or grandparents, through Sephardic ancestry, and through marriage. For those that aren’t lucky enough to have Portuguese relatives or a Portuguese partner, another option is to obtain residency through investment and then after five years, apply for citizenship. 

The citizenship through investment route is ideal for a number of different types of people but primarily:

  • Those that can’t or don’t want to move to Portugal but still want a pathway to Portuguese citizenship
  • Those that want to move to Portugal but want more flexibility in the number of days they have to be physically in Portugal (~7 days per year versus the 8 months typically required by other residency visas)
  • Those that want to move to Portugal but that don’t qualify for another residency visa like the D7

Obtaining Portuguese citizenship comes with a number of benefits, including the right to live, work, and study in Portugal, but also the right to live, work, and study anywhere within the European Union. And then there’s healthcare. Like most European countries, Portugal has a tax-funded public healthcare system. Under this system, you won’t get turned away for pre-existing conditions but looked after. And you won’t be handed a debt-crippling bill at the end either. 

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How much does citizenship through investment cost? It depends on the route you take, but the most popular options range from €280,000 to €500,000. 

Why the Portuguese Golden Visa is so appealing 

There are two main things: cost (there are a few affordable options, particularly around property) and speed in which you can obtain citizenship (it’s faster than other European countries). 

Here are just some of the reasons Portugal’s golden visa is so appealing:

  • You can apply for permanent residency after 5 years
  • You can apply for Portuguese citizenship after 5 years (application takes another two years or so in practice)
  • Investment options start from €250k (but €280k for most people)
  • You are only required to spend an average of 7 days per year in Portugal
  • You don’t need to move to Portugal (if you don’t want to)
  • You have the option of moving to Portugal permanent later on, even if you don’t do it initially
  • You can take advantage of the NHR tax regime, which offers preferential tax rates, if you want to 
  • You get access to the Portuguese public healthcare system 

Basically, it’s ideal for those that want to obtain an EU passport but don’t necessarily want to move to Portugal – or don’t want to move to Portugal just yet. It’s also suitable for those that want to move to Portugal but who want to be able to still travel as and when they please, rather than having to spend 8 or more months per year in Portugal (as most other residency visas require). 

The Top Investment Options

There are a lot of investment options, including investing in a charity or scientific research, but most of these won’t appeal to everybody. 

Property

For most people, the most appealing option will be to purchase a property in Portugal. This could be a second home, a main residence, or a rental property – the options are quite flexible. Properties normally need to cost €500,000 or more, but this can be reduced to €350,000 or even €280,000. 

  • €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

As many people planning to move to Portugal plan to purchase a property anyway, and often a fixer-upper in rural Portugal, the property route of the golden visa could be a very appealing option. 

Challenges of the property route 

Although this is the most popular option for most people, there are a few downsides to this particular investment route. Firstly, owning a property in another country isn’t ideal for those that want a quick path to Portuguese citizenship with as little hassle as possible – even if they decide to rent it out. Owning a property can be costly and there’s always paperwork and admin to deal with, and even more challenges if you decide to rent it out. 

But before you even get to the challenges of owning a property, actually finding a suitable property can be challenging due to supply and demand challenges, especially if you’re looking for something at the €280k or €350k price points. 

Finally, as of 2022, there are new regulations which means that properties purchased in places like Lisbon, Porto, and most of coastal Portugal (including the Algarve) can’t be used in a golden visa application. You can still purchase an eligible property in other parts of Portugal; just not in these regions. 

Commercial Property Investment Projects

An increasingly popular option is to invest in commercial property, particularly in hotels or resorts that are in the process of being built or redeveloped. It’s much more hands-off than owning a property and as investment options often start at €280,000, it’s cheaper than investing in a fund, which is another popular hands-off route.  

All of these schemes differ slightly, but most typically offer a low-price point, rental income (often paid upfront), and a buyback option after five or six years. You can also use the hotel or resort once or twice per year when you come to fulfill your residency stay requirements. 

This option is ideal for those that don’t want to move to Portugal and want to obtain Portuguese citizenship in one of the cheapest ways possible. It’s not the cheapest route – that’s investing €250k in the arts and culture sector – but it is the most practical affordable route for most people. It’s also ideal for those that are planning on moving to Portugal in the future but, for whatever reason, don’t want to buy a property just yet as it allows them to get started on the pathway to Portuguese citizenship. 

Challenges of investing in commercial property 

This option won’t suit those that want to move to Portugal semi-permanently, but it is ideal for those that want a hands-off investment with minimal costs. The main downside compared to owning a property is that your funds are tied up with a company rather than in a property that you have more control over. 

Although many of these projects offer rental income (often paid upfront) the yield is often around 3%, which may be a lower return than what you would get if you owned and rented a property or invested in a fund, not to mention there’s no possibility of capital appreciation. However, you also avoid many of the costs involved with buying, selling, and maintaining a property, all of which would eat into any investment return. 

Funds

The funds option is another option for those that want a hands-off investment. Although the minimum investment amount of €500,000 is more than the entry point for most commercial real estate projects, there is the possibility that your investment will increase more than the rental income you would obtain from a commercial real estate project. 

Challenges of investing in funds 

The first downside to this option is the cost: as of 2022, the minimum investment amount is €500,000. As real estate, including investing in commercial property, starts from €280,000, this option is now a little less appealing. 

Another challenge is deciding on a suitable fund. While there are a variety of fund options, including those that invest in property, startups, manufacturing, and agriculture, each of these funds requires a considerable amount of research before investing. 

Then there’s the investment period, which is often 7 years or more and can often be as many as 10 years. This is much more than what’s required for a hotel redevelopment project, for example, and means that your money is tied up for longer. 

For many, there is also more perceived (and perhaps actual) risk in investing in a fund versus investing in a property. Property is tangible, and even if the value of the property goes down, you still have a property that you can visit and enjoy. 

Capital Transfer

Perhaps the easiest option is the capital transfer option: simply transfer €1.5 million to a Portuguese bank account. There’s no need to look for a property, read through the terms and conditions of an investment fund, or research a particular development company. Your money is held in a bank account, which comes with a lot of perceived security, 

Downsides of the capital transfer route

The first, and very obvious downside, is the cost: €1.5 million. While many people can pull together €280,000, finding €1.5 million that you can leave in a bank account is going to be much harder. 

The second downside is growth limitations. While you may find an account that pays a better than average amount of interest, it probably won’t be as profitable as investing that money elsewhere. 

Capital Transfer & Job Creation 

Another investment option within the golden visa program is to invest €500,000 into a new or existing Portuguese company and create at least five new permanent jobs for a minimum period of three years. 

As this option involves creating five new jobs in Portugal, it has significant societal benefits – as well as potentially offer you a return on your investment while obtaining citizenship as well. 

Downsides of the capital transfer and job creation route

The first downside to this route is the cost: at €500,000, it’s more expensive than the cheaper real estate options. If you have to get involved in the running of a company, it’s also more time-intensive than the other options as well. However, if you have a business that you think would succeed in Portugal, it could be an option to consider. It could also be a hands-off investment route if you invest in an existing company in Portugal rather than personally start a new one. 

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