The Golden Visa program in Portugal
Invest in Portugal and obtain the Portugal Golden Visa for you and your family
Golden Visa Portugal: Europe's most popular 'residency by investment' program
After the start of the global crisis in 2008, the Portuguese government has quickly done its homework. Although Portugal never had to deal with a real estate bubble, the population did feel the global financial crisis. Employment declined, loans could not be paid off and an oversupply of properties in Portugal quickly arose. Because many Portuguese could no longer pay off their loan or receive a loan for the purchase of real estate, Portugal started to attract foreign investors. Retired Northern Europeans were attracted by promising them a tax-free pension. This was possible thanks to the double taxation avoidance treaties signed by Portugal with many European countries. If you stay in Portugal for more than six months a year and receive a pension (or other income) in your country of origin, the country of origin does not, in principle, ask for income tax and in Portugal there is also no tax collection on foreign income.
International business people and investors from non-EU or EEC countries were in turn attracted by the Golden Visa scheme. The Portuguese Golden Visa was the first such program in Europe and has remained the most popular and successful 'residence by investment' program in Europe to this day. Investors are attracted not only by the tantalizing benefits of this visa system and the low cost of living in Portugal, but also by the fact that Portugal is a member of the Schengen countries. This gives non-Europeans with a Portuguese residence permit access to all European Schengen countries.
The benefits of the Golden Visa program in Portugal
Choosing Portugal's Golden Visa system has many advantages over choosing another golden visa system like Spain's. Many of these benefits relate not only to the direct benefits of the scheme itself, but also to the benefits offered by Portugal as a living and investment climate.
For example, the cost of living in Portugal is much lower than in Spain or Northern Europe. Portugal has one of the lowest crime rates in Europe and offers an excellent education and health system. Portugal has 3 major international airports and is easily accessible. There are more than 300 scheduled flights per day between Portugal and the rest of the world. Portugal is a modern and cosmopolitan country with a peaceful and hospitable population.
One of the most attractive incentives of the Golden Visa in Portugal is the possibility to apply for permanent residency after 5 years and even Portuguese citizenship after 6 years. You no longer need to stay in Portugal to take advantage of the business and personal benefits of this system.
The Golden Visa of Portugal not only allows the holder to travel through Portugal, but also through all other countries of the European Schengen zone. And not only travel is possible, but also business and the provision of business services are possible without restriction within the Schengen zone.
The simplicity of the Golden Visa program in Portugal is also very attractive. Very few demands are made. A brief summary of the requirements:
- the investment must be maintained for a minimum period of 5 years.
- the funds for the investment must come from abroad.
- the applicant must have entered Portugal legally with a visa valid for the European Schengen area.
- the applicant must be able to demonstrate that he or she does not have a criminal record in the country of origin or other previous countries of residence.
- in the first year, the applicant must stay in Portugal for a minimum of 7 days. He must then reside in Portugal for at least 14 days in 2 years.
Once you have the golden visa in Portugal, you no longer need a visa to enter Portugal. One can then live in any country, while enjoying the benefits of a residence and work permit in Portugal, which is also valid for the other European Schengen countries. Even family reunification is possible and after 5 years the family is also entitled to permanent residency with the option of applying for Portuguese nationality.
The requirements for the Portugal Golden Visa
The requirements for obtaining the Golden Visa in Portugal are also well-defined and there are several possible options. The options take into account the specific incentive your investment can bring to the country.
Buying property in Portugal
If you buy property in Portugal with a value of €500,000 or more, you are eligible for the Golden Visa. If the property you are buying is older than 30 years or is located in an urban recovery area and you have your purchase renovated, an investment of €350,000 is sufficient.
The investment takes into account the total amount invested. For example, you do not have to buy one property in Portugal worth €500,000 to qualify for the Portugal Golden Visa, but you can also buy 2 apartments of €250,000 each. All types of properties are eligible.
Transfer of funds to Portugal
Another possibility to obtain the Portuguese Golden Visa is to transfer funds to Portugal. You must then transfer a minimum amount of €1,000,000 from a foreign bank to an account of a Portuguese bank that is in your name. You are completely free to choose what to do with that money and where or how to invest it. For example, you can use this money to buy shares in Portuguese companies.
Job creation in Portugal is a further option to obtain the Golden Visa in Portugal. No minimum financial investment is required for this. You must however create employment for at least ten employees registered with social security. When establishing the company or hiring staff, you are eligible for all existing tax incentives.
Property investments in Lisbon and Porto will no longer be eligible for the Golden Visa as from 2021
During the 2020 budget, the MPs of Portugal made significant changes to the Portuguese Golden Visa system. From 2021 onwards, property investments in Lisbon and Porto will no longer be eligible for the Portuguese Golden Visa. The popularity of this system has in these cities made property prices unaffordable for the local population, which in turn started to cause social problems. In addition, it is in the country's interest to stimulate investment more inland as well as the islands such as Madeira and the Azores. In the future, other regions should also be able to benefit from this successful Portuguese investment program.
So if you want to invest in Lisbon or Porto to obtain the Golden Visa of Portugal, you have to be quick. This year it is still possible, and even though the settlement due to the coronavirus crisis is expected to take effect only later on in 2021, investing in the popular major Portuguese cities or coastal areas will soon become more difficult and less attractive.
Let real estate and legal professionals advise you
If you want to invest in Portugal to qualify for the Portuguese Golden Visa, then it is important that you ask advice from professionals. We advise you to be accompanied by a lawyer during the application procedure. Most law firms also work with tax advisors, who ensure that you do not miss any tax benefits during your investment in Portuguese property.
Feel free to contact us or ask for our partner lawyers with experience and expertise in buying property by foreigners and obtaining the Golden Visa in Portugal.