The Golden Visa changes are not yet in force, as they still need to be approved by the Portuguese President of the Republic and, subsequently published in the “National Republic Gazette”. However, as we have analysed in this article, some of the terms and conditions of the Golden Visa will be maintained – which represents an opportunity for future investors -, as there are several solutions for individuals and investors who wish to take advantage of the wave of Portuguese economic growth and development, and obtain authorisation to establish their residence in Portugal, with all the associated benefits.
WHY PORTUGAL?
Not only for its climate, safety and beaches, but also for the investment opportunities and the tax benefits it can offer, Portugal stands as an opportunity for international migrants.
Despite the consequences of a worldwide inflation crisis, the Portuguese economy is still showing signs of a good recovery from Covid.
Thus, while average economic growth in the European Union in 2022 is 3.6% (3.5% in the Eurozone), Portuguese GDP has grown at an expressive rate of 6.7%. For 2023, the European Commission forecasts Portuguese growth of 2.4%, more than double the forecast averages for the European Union (1%) and the Eurozone (1.1%).
At the same time, in April 2023, the Portuguese unemployment rate has been set at 6.4%.
.In terms of investment opportunities, the Portuguese property market continues to grow, with new international companies and private individuals entering the market.
By 2022, property investment in Portugal had risen by 67%, with the strongest growth recorded in southern European countries (Spain, Italy and Portugal).
In addition, the possibility for people who have not been Portuguese tax residents for the last five years to apply for the non-habitual resident tax regime offers undeniable advantages in terms of income taxation.
Under this regime, earned income and income from self-employed activities with high added value are subject to a flat-rate tax of 20%, and most income received abroad is exempt in Portugal, provided certain conditions are met.
The Golden Visa is also a potential attraction for foreign investors interested in obtaining a residence permit allowing them to travel within the Schengen area and, eventually, subject to other conditions, to obtain Portuguese nationality
GOLDEN VISA RECENT LEGISLATIVE PROCESS (UPDATE)
Recently, there have been developments in the Golden Visa legislative process that will change the regime for future applications
Due to the housing difficulties faced by the average working population in Portugal, caused, among other things, by the effects of inflation on the housing market, the Portuguese government announced a legislative proposal to revoke the Golden Visa scheme.
This proposal was discussed and voted on by the Portuguese Parliament, along with other measures to deal with the consequences of the housing crisis in Portugal.
The final approved document provides for the abolition of three Golden Visa schemes but maintains five investments as eligible for future Golden Visa applications.
WHAT ARE THE TERMS AND CONDITIONS OF THE GOLD VISA THAT WILL COME TO AN END?
After 5 years of residence in Portugal, it is also possible to apply for the permanent residence and/or for the Portuguese nationality.
If the President of the Republic approves this legislation, the following Golden Visa conditions will no longer be accepted for future applications:
- The transfer of € 1,500,000.00 to a Portuguese bank account;
- The acquisition of real estate; and
- The acquisition of real estate accompanied by the execution of rehabilitation works.
The draft legislation also specifies that the abolition of these arrangements will not affect current applications, future renewals or applications for family reunification.
Which golden visa ARRANGEMENTS will be maintained?
However, the following investments will remain valid for the Portuguese Golden Visa programme:
- The creation of at least 10 jobs;
- Capital transfer of an amount equal to or greater than € 500,000.00 for investment in research activities developed by public or private scientific research institutions integrated into the Portuguese scientific or technological system;
- Capital transfer of an amount equal to or greater than € 500,000.00, for the constitution or the reinforcement of the share capital of a commercial company with head office in the Portuguese territory, in conjunction with creation or maintenance of five permanent jobs;
- Cultural donation of € 250,000.00 for projects certified by the Ministry of Culture;
- Investment of € 500,000.00 for the acquisition of shares in investment funds with a maturity of at least five years at the time of the investment and in which at least 60% of the investments are made in commercial companies with head office in the national territory (excluding real estate funds).
However, these investments will not be eligible if they are, directly or indirectly, intended for the Real Estate market or Real Estate companies.
THE RESIDENCY VISA: AN ALTERNATIVE TO THE GOLDEN VISA
Although certain terms and conditions of the Golden Visa are maintained, some people wishing to settle in Portugal may find that other residence visas (“D-Visa”) are the most appropriate solution for their particular case.
The residence visa has the advantage of not requiring investment with minimum thresholds, but does require longer minimum periods of stay on Portuguese territory.
It can be applied for at a Portuguese consulate and, once obtained, allows the applicant to apply for residence authorization from the immigration authorities in Portugal.
After 5 years’ residence in Portugal, it is also possible to apply for permanent residence and/or Portuguese nationality
Given that there are different types of residence visa, applicants will need to select the appropriate residence visa modality, depending on the activity carried out.
Below are some of the main types of residence.
PASSIVE INCOME VISA (D7)
The passive income visa, commonly known as the “D7”, is one of the most attractive residence visas.
To obtain it, applicants simply need to prove that they have income from a passive source, such as pensions, retirement, investment funds, shares or rental contracts, among others.
DIGITAL NOMAD VISA
The digital nomad visa is an innovation resulting from the latest changes to Portuguese immigration legislation.
This visa is intended for people who work remotely for non-Portuguese entities or individuals.
Applicants must provide proof of average monthly income over the last three months from employment or self-employment of at least €3,040.00 (value for 2023).
HIGHLY QUALIFIED WORKER VISA
The Highly Qualified Worker visa is a fast-track visa created to attract high value-added professionals and academics to work in Portugal.
Applicants must prove the existence of an employment contract, freelance contract or promise of contract with a Portuguese entity or individual.
This sub-modality also includes the famous ‘Tech-Visa’, which provides a fast-track procedure for expatriates employed in companies and start-ups certified by the Portuguese Agency for Competitiveness and Innovation.
In this case, the company itself can initiate the relocation procedure on behalf of the employee.
EMPLOYEMENT VISA (D1)
The Employment visa requires the Portuguese consulate to be provided with proof of the existence of an employment contract or promise of employment between the applicant and a Portuguese entity or person.
SELF-EMPLOYED WORKER OR ENTREPRENEUR VISA (D2)
The self-employed worker or entrepreneur visa is intended for people who are self-employed and already have a contract or promise of contract with a Portuguese entity or person, or for people setting up a Portuguese company.
With regard to the formation of a Portuguese company, there is no minimum threshold for share capital or investment.
FAMILY REUNIFICATION
Applicants for all types of residence visa do not need to wait until their residence in Portugal has been consolidated before bringing in their family members.
Spouses or persons with whom the applicant has been living as a couple for more than two years, minor children or step-children and economically dependent adults (such as adult children and parents) will be authorized to apply for a residence visa for family members at the same time as the main residence visa application.
CONCLUSION
Some of the terms and conditions of the Golden Visa will be maintained – which represents an opportunity for future investors – because there are various possible solutions for people and investors who wish to take advantage of the wave of growth and economic development in Portugal and obtain authorization to reside in Portugal, with all the associated benefits.
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Rogério Fernandes Ferreira
Duarte Ornelas Monteiro
Joana Marques Alves
Raquel Silva Simões
Ana Sofia Gariso
Catarina Amélia Carvela
Carlos Alcântara Neves
Nicolas Corrêa Simonini
(Private Clients Team)
Romy Alfredo Bouery
Sara Mendes Fernandes
Pedro Santos Gomes
(French Desk)
