Under the new rules, investors will not be allowed to make investments in Lisbon, Porto, and the coastal and resort regions of Portugal. The current investment amounts of € 350,000 (for properties more than 30 years old or located in areas of urban renovation) and €500,000 (acquisition of real estate property of any type) will remain unchanged after implementation of the new rules.
The Portugal Golden Residence Permit Program is a five-year residence-by-investment program for non-EU nationals. The residence permit gives the right to live, work, and study in Portugal and allows free circulation in Europe’s Schengen Area. To get the Portugal Golden Visa permanent residence, you must make and maintain your qualifying investment for a minimum of five years. You must also spend a minimum of seven days in Portugal for the first year, then no less than 14 days each subsequent two-year period (this is called the stay requirement). If you are simply looking to live in Portugal, this may not be the program for you. … All in all, Portugal’s Golden Visa program offers many benefits despite the significant investment required. For foreign investors looking for access to the EU and a powerful passport, the fees and cost may just be worth the trouble.
Fees. Government fees per family member for application of the Portugal golden visa are €5,336.40. Renewal fees every two years apply at 50% of those rates. In addition there is a processing fee on application and renewal of € 533.90 for the main applicant plus € 83.30 per family member. To be eligible for a Golden Visa in Portugal, you must make one of the following investments: Purchase a property worth at least €500,000. If you purchase in a low-density area, the investment amount is €400,000. Invest €350,000 in a property in a Portuguese urban regeneration area. In Portugal you can apply for permanent residency after five years of holding a temporary resident card, which can be the work permit (usually granted for one year the first time and then for two years after each renewal). Portugal is the easiest European citizenship that you can get in the EU. Their program is extremely generous as it allows citizenship after only 5 years without the need to live in the country (you only need to visit for 2 weeks a year) giving you visa-free travel to 160 countries.
It is possible to borrow funds that exceed the minimum amount for a Golden Visa. For example, for an investment of €600,000, you can take out a loan of €100,000 from a Portuguese bank). If the funds are not borrowed in Portugal, then you can use them for the full investment cost. The Residence Permit you receive via the Golden Visa is valid for two years. You can then renew it indefinitely every two years as long as you have maintained the investment (in other words, as long as you still own the property you have purchased). It is possible to buy property in Portugal and obtain citizenship after 5 years of maintained investment. In order to buy property in Portugal and get residency, you must invest in a qualifying property. Buying property in Portugal worth at least €500,000 (reduced to €400,000 if located in a low-density area).
Real estate is the most popular investment option for 90% of investors but very few investors are aware that there are eight different investment options available for securing European residency under the Portugal Golden Visa program. After 10 years of grand success, the Portuguese government is set to change the investment amount for its Golden Visa Program effective 1st January 2022. This change is being implemented to attract more investment in the fields of science & technology, business, and real estate in the remote and less populated areas of Portugal.
Change in conditions for real estate investment in Portugal:
Under the new rules, investors will not be allowed to make investments in Lisbon, Porto, and the coastal and resort regions of Portugal. The current investment amounts of € 350,000 (for properties more than 30 years old or located in areas of urban renovation) and €500,000 (acquisition of real estate property of any type) will remain unchanged after implementation of the new rules. However, after 1st January 2022, investors can make real estate investments only in Azores, Madeira, and inland regions of the country. This may result in lower rental income, and also less liquidity for investors, especially when they decide to sell the real estate. Apart from the above two real estate investment options, there are six other investment options available to investors under the old rules. The investment amount will be increasing for some of these options as of 1st January 2022.
Six different types of investments in business and financial products:
Investment amount as transferring capital (bank deposit) will increase from € 1 million to €1.5 million. Investment amount in VC and other funds, scientific research, and in a new and existing business with creation of 5 jobs will also increase from € 350,000 to €500,000. However, investment for preservation and restoration of heritage and cultural buildings and investment in business by creating ten jobs will remain unchanged. The investor has time until 31st December 2021 to avail of the advantages offered by the old rules and make an investment in Portugal. It is advisable to select the type of investment to be made and start the application process for this visa as soon as possible, advises Mr. Prashant Ajmera, founder and immigration lawyer of Ajmera Law Group, a law firm exclusively practising immigration law in India since 1993.
Real estate v/s Fund investment:
During these COVID times, investment in funds has become a more popular option than investment in real estate for obtaining the Portuguese Golden Visa as investors are unable to travel physically to Portugal. “The rules were implemented in 2017 but it was not until 2019 that the first funds became available to make an investment in compliance with immigration rules and obtain Portugal’s Golden Visa,” informs Mr. Ajmera. Investment funds are a safer option as these funds are regulated by the Portuguese Securities Market Commission, also known by its initials as “CMVM”. These funds are diversified into real estate located in Lisbon and Porto area. “Fund investment is very safe and secure. It is also beneficial to investors as they do not have to concern themselves with the renting and maintenance of the purchased real estate. In real estate investment, the closing cost can be substantial, which is not the case with fund investment,” Mr. Ajmera added.