Portugal Golden Visa Program in 2020
Portugal will continue to offer its highly advantageous Golden Visa in 2020 and foreign investors will likely keep flocking towards it. Every parameter shows that Portugal’s Golden Visa programs are still highly profitable for both the Mediterrenean country and its many foreign investors.
Portugal Golden Visa in a Glance
It is quite straightforward to receive residency in Portugal through an investment in its real estate market, which is known as a Golden Visa program. If the foreign investor buys a Portuguese property that costs at least 350.000 Euros they will be eligible for the Golden Visa program. One can also invest 350.000 Euros to a Portuguese research fund, transfer a total of 1.000.000 Euros as capital, or create an establishment that employs at least 10 Portuguese to be eligible for the same program. Amidst all this however, real estate option seems to be the best option as thanks to the robust real estate market in the country returns on that investment are always high.
Portugal Golden Visa 2020 Changes – Updated
As of February 2020, the Portuguese Parliament will enable the Government to introduce changes in the scope of investment types to qualify for the Portuguese Golden Visa Programme. The intention is to favour the promotion of investment in low density areas, urban renovation, cultural heritage, and job creation.
Although there is still a lot of uncertainty in terms of the specific changes and the time frame they will be implemented in, we believe that the below information may shed a light on the implications of the changes on the Golden Visa rules as we know them.
Thus, we will address a few essential points regarding this matter:
- What is the proposal?
- The actual reason behind the proposal
- Timeline for any potential changes
- Is this the end of the Portugal Golden Visa Programme?
- Which investment types will no longer qualify for the Golden Visa?
- Will this affect those who already received or applied for their Golden Visa?
- Will this affect the possibility to apply for Portuguese citizenship?
What is the proposal?
The Portuguese Government submitted a draft State Budget Law for 2020, which was discussed by the Portuguese Parliament. During discussions, various political parties submitted proposals in order to amend the draft budget prior to its approval. The Socialist Party has submitted proposals to make changes to the Golden Visa rules.
This draft law (Annex 1) is not finalised, and it does not introduce any actual changes to the current Golden Visa Program. As a matter of fact, it only allows the Government to make changes to the rules, and these changes have not yet been clarified.
This means that, Parliament will give the Government an authorization to legislate changes to the Golden Visa Programme. Therefore, in case it is adopted, the final legislation will not be immediately in force. Changes to the Golden Visa rules will only take effect after complete regulation is published.
The Actual Reason behind this Proposal
In the main cities like Lisbon and Porto, the real estate prices have been increasing and this forces many Portuguese families to seek housing in the surrounding areas. The Golden Visa change proposal is merely an effort, used by some political parties to try to address this current real estate market situation.
The change to the Golden Visa rules, unfortunately, does not correctly address the root of the issue at hand.
- 242.091 real estate properties were sold in Portugal,
- 1.332 Portugal Golden Visas were granted,
- Golden Visa applicants represented 0,55%of the total Portuguese real estate market,
assuming each of these applications chose to proceed with the route of real estate investment. As fo 2020, 94% of the Portugal Golden Visa applicants used the real estate acquisition route in order to qualify for the program.
There are many other reasons behind the growth of the real estate markets in Lisbon and Porto. Growing tourism, and thus the short-term rental market, NHR tax residency program, growing start-up scene, and lifestyle choices are among these reasons. The low interest rates in the financial institutions also made capital move into higher yielding investments, such as real estate properties. The majority of real estate investors in Lisbon and Porto are EU citizens. Thus, real estate growth continues, but not necessarily fueled by the Golden Visa programs.
List of main foreign investor nationalities in Portugal:
- 21% French
- 18% UK
- 18% Brazil
- 9% Germany
- 7% China
Timeline for any potential changes
The Parliament will give the Government an authorization to legislate changes to the Golden Visa regime, and therefore, if adopted, the final legislation will not be immediately in force.
In order for a legislation proposal to become a law, it needs to be:
(1) Discussed at the Parliament
(2) Voted at the Parliament
(3) Approved by the President
(4) Published into Law
Once it is published into law, all necessary regulations need to be implemented in order for the public officials to follow it and address it.
It is not possible to forecast an exact date, though the process would potentially take a couple of months in the quickest scenario. We cannot anticipate when during the year of 2020 the Government will start the legislative procedure and approve this decree-law.
Is this the end of the Portugal Golden Visa Programme?
This is not the end of the Golden Visa Programme, the potential changes will only introduce certain changes to the scope of investment routes available to attain a Portugal Golden Visa.
Which investment types will no longer qualify for the Golden Visa?
Golden Visa will no longer be available through investment in real estate property in major cities like Lisbon and Porto. Real estate property acquisition in interior local communities and the autonomous regions of Azores and Madeira will still be a valid investment route to attain Golden Visa.
The provision does not clarify if the 350.000 Euro investment route through real estate renovation will still be available or not. It is also unclear if investment into Portuguese funds will be affected by the changes.
It is possible that the minimum amount of investment may be increased for the remaining options.
Will this affect those who already received or applied for their Golden Visa?
This will not have a retroactive effect. It will only be valid after the law being approved and published.
The existing holders of residence permits will be able to submit their renewal applications.
Will this affect the possibility to apply for Portuguese citizenship?
The potential change in the law will only have an effect on the Foreigners Act. The Portuguese Citizenship Act, on the other hand, will stay in tact; thus all criteria to apply for the Portuguese citizenship will remain as is.
What is a Portugal residency in 2020?
Portugal is a highly developed European country with state-of-the-art medical facilities and plenty of opportunities to get some of the best education on the world. It is a part of the EU thus getting residency in Portugal means being eligible to live and work in many more countries that share the Schengen area. Moreover, Portuguese passport is one of the best in the world and if you do end up acquiring it you can travel to 164 countries without a visa. Taxation system within Portugal allows your income outside Portugal not to be taxed there as well, which is always good news for avid foreign investors.
Why will Portugal Golden Visa be a good option in 2020?
Portugal is almost completely recovered from its crisis back in 2008. This means that soon enough its ever growing real estate market will come to a halt or start growing slowly. But that time has not come yet. Portuguese real estate market is still a booming one and professionals argue that it will remain so in 2020. Buying a house in Portugal for a Portuguese residency as early on as possible in the year can yield a lot of profits to its investor even at the end of the year, after a mere 12 months. It would be wise to make use of this program while it still exists and reserve your own spot in Portugal.
What is golden visa scheme?
Golden visa schemes are programs offered by many countries around the world which offer residency in exchange for substantial investment in one or several destinations designated by the government of the particular country. If the applicants manage to submit all the required documents and qualify after an evaluation process, they and potentially their dependents are granted residence permit for a limited amount of time. Some programs, as a result of successful compliance with all the rules for a period of time, may grant the right to apply for permanent residency or citizenship.
How can I get PR in Portugal?
One of the programs that offer permanent residency after a while is the Portugal Golden Visa Program. After successfully obtaining the Portuguese residence permit, the holder should renew their visa at the end of the first and the third years. After 5 years of residence, provided that all the requirements have been met by the resident, the visa holder can apply for permanent residency.
Who is eligible for a Portuguese passport?
Initially, the applicant must be over 18 years old. They must be non-EU/EEA nationals. Since the path to Golden Visa is through a residence by investment scheme, there must be an investment made in compliance with the rules and designations set by the program’s provider. The source for income, the criminal records of the applying individuals, all the financial activities must be clearly reported during the submittal of documents. After this investment is made, failing to comply with the residency requirements may result in withdrawal of the permit or the passport.
How can I get Portuguese citizenship?
Portugal Golden Visa does not grant direct citizenship. The investors must first successfully complete substantial investments in designated areas and maintain their compliance with all the rules throughout the 5 year period needed for the right to apply for naturalization. Only after 5 years of successful residency, residents can apply for Portuguese citizenship. It is best to keep in mind that the citizenship requires basic knowledge of Portuguese.
Does Portugal allow dual citizenship?
Portugal allows dual citizenship. So, residents on a path to citizenship do not have to worry about this. However, if the original country of citizenship does not allow dual citizenship, the applicant may have to resign that passport in order to be able to be granted Portuguese citizenship. It is a good idea to check this information before starting the process towards Portuguese citizenship.