Portuguese (EU) Residency Program
In January 2013 the government of Portugal has simplified its Golden Residency Permit Program, known as the ‘golden visa’ to make it more attractive to foreign investors. The original scheme allowed golden visas to be granted to those conducting capital transfers of at least EUR 1,000,000, creating 30 jobs or buying real estate worth at least EUR 500,000. Capital Transfer funds can now be used to invest in all types of companies and the job creation category has been reduced from 30 to 10 jobs.
Moreover, the following amendments to the scheme have been made:
Periods of mandatory stay in Portugal for the investors have been eased and now stand at 7 days for the first year and 14 days for subsequent periods of two years.
Possibility of co-ownership, with each co-owner making an investment of at least EUR 500,000
Promissory Contracts of Purchase and Sale are now acceptable for the initial investor residency application, if a deposit of at least EUR 500,000 is paid. In this event, the actual purchase of the property needs to be effected until the time of the first renewal of the residency permit.
Opportunity to finance the purchase of property over EUR 500,000.
The properties acquired can be freely rented and let for commercial, agricultural and tourism purposes.
Permanent Residence and Citizenship in Portugal
Permanent residency (PR) is available after 5 years. Citizenship and passport are available after 5 year with legal residency status in Portugal, the same as for PR. It should be noted that in order to get Portuguese PR and/or citizenship applicant must pass a language test.
Other EU-countries that have the similar property investment immigration scheme are Spain, Latvia, Cyprus, and Bulgaria. At the same time Cyprus and Bulgaria are not members of Schengen agreement. Latvia being a member of Schengen Area does not recognize dual citizenship. Spain recognizes dual citizenship only with Spanish-speaking Latin American countries (excluding Brazil which is a former Portuguese colony).
Therefore,, we hope that the amendments to the Immigration Law will make the Portuguese Golden Visa program more attractive to international investors who wish to relocate to the European Union.
New law was published in the official gazette on June 30, 2015, introducing important changes to Portugal’s residency-by-investment program also known as Golden Visa. The alternative eligible investments are currently as follows:
- Financial assets, which may be: Either >€500,000 million in units of a fund that invests in the share capital of small or medium sized businesses or >€1 million in any other type of financial asset, including deposits and securities of any type.
- A business that creates >10 new permanent jobs (reduced to >8 if located in a low density area)
- Real estate, which may be: €350,000 in properties and their renovation (reduced to >€280,000 if located in a low density area), subject to the properties: either having been built >30 years ago or being located in designated areas of urban renovation €500,000 in any other type of real property (reduced to >€400,000 if located in a low density area)
- €350,000 in scientific research that is conducted by institutions that are part of the national scientific and technological system (reduced to >€280,000 if located in a low density area)
- €250,000 by investing in, or supporting, the artistic production or the recovery or maintenance of the national cultural heritage that is conducted by accredited institutions (reduced to >€200,000 if located in a low density area)
Low Density Areas
With the exception of investments in financial assets, the minimum investment amount that is eligible for Portugal’s Golden Visa benefit from a 20% reduction if located in a “low density area”. “Low density areas” are the NUTS 3 regions having less than 100 inhabitants per square kilometer or a per capita GDP of less than 75% of the national average. In practice, this applies to the whole of Portugal with the exception of the coastal areas south of the River Lima and north of the River Tagus. The Setubal Peninsula region, just south of Lisbon is on the borderline in terms of GDP (72.9% of the national average according to the most recent statistical data) and a rebound in its economy may quickly exclude it from the low density areas. The islands of Madeira and Azores are also excluded from the low density areas.
Questions and answers about Golden Visa Portugal:
Question: I read about the Portugal passport program online, and saw your firm also offers this country. I have a few questions about the program. I have a family of four (with two young children). What will the investment amount required be? I heard there are quite high government costs in some of these schemes, can you please tell me all the costs involved? My husband and I visited Portugal a few years ago and really enjoyed our time there. Therefore, we are interested in maybe buying property in the Algarve region. Do you have specific properties in the region? If not, can you assist with sourcing the appropriate real estate? Lastly, how long does an application take until approved?
Answer: It is not a passport program; it is residency. You will become eligible to apply for citizenship and passport after 6 years from the date initial residency permit (first golden visa) is issued. Investment amount is 200,000 – 500,000 EUR irrespective of number of applicants in the family (amount actually depends upon the type of investment and region). In addition to the investment you will be expected to pay taxes in the amount of 8,8 % from the property price: 1) Transfer tax of up to 8%, and 2) Stamp duty of 0.8%. Government processing fee (application and renewal) – 514 EUR (plus 80 EUR per family member). In addition, after the Golden visa is approved the Government charges 5,148 EUR for every visa. For a family of four it makes more than 20,000 EUR of additional expenses, and I agree with you that the Government costs are unreasonably high. Our professional fee for initial Golden visa is 15,000 EUR per family and 5,000 EUR for renewal (also per family). In case you agree to these terms let me know and I will ask my colleagues in Portugal to find properties.
Question: Please let me know if we can still invest in Portugal and gain citizenship. If so, how much does it cost and how long the process takes? Also, please, let us know your fees and charges for the whole process.
Answer: Portugal program does not lead to citizenship in a fast way. In order to apply for citizenship in Portugal you will need to show 6 years of legal residence + good command of the Portuguese language. Without physical residency requirement (or more precisely, with minimal 7 days requirement) you can count only on temporary residence permit and after 5 years – on permanent residency. If you are OK with these conditions you are expected to invest 500,000 EUR into property (for personal or commercial use) and spend 7 days per year in Portugal during 5 years (after 5 years you can get permanent residency with minimal physical residency requirement of 35 days only). For EU passport purpose the best options are Bulgaria, Malta and Cyprus but these programs are more expensive.
Question: We are looking at various aspects of acquiring Permanent Residence in EU or Schengen states. If I hold Portugal Permanent Residency, can my child study in the UK with School Fees or College Fees reduced? Any other educational benefits or medical benefits in Portugal?
Answer: The UK is not member of the Schengen agreement. It conducts a separate visa policy though UK is member of the EU. Consequently, Portuguese residency permits (irrespective temporary or permanent residency) will not allow to visit the UK or to have the reduced fees for education. In order to have special fees for education you are expected to have citizenship and passport of some EU country (including Portugal). Therefore, Portuguese passport will be ok for your purpose. At the same time, you should be aware that in order to be eligible for Portuguese citizenship you must actually reside in Portugal for 6 years and speak Portuguese language at the level of B1 (you will have to take a test or exam to prove the ability).
If you have any questions regarding investments or business immigration to Portugal, please, do not hesitate to contact us today