Portugal excludes real estate from Golden Visa investment options

The Portuguese Parliament approved, on 19 July, the government’s ‘Mais Habitação’ (More Housing) legislative package. This contains a series of measures that are intended to ease the country’s housing crisis, including the exclusion of real estate from the investment options available under the Golden Visa scheme.

The government decided to keep the Portugal Golden Visa scheme open for investment in other sectors to test whether it can ‘survive’ without the property component. However, it has also withdrawn the option to make a capital transfer of at least €1.5 million to Portugal. The changes will not be applied retroactively and the rights of renewal for family reunification and permanent residency applications are safeguarded.

As a result, the following investment options under the Golden Visa programme will be retained for non-EU nationals:

• Establishment of a single-shareholder private limited company creating at least 10 sustainable jobs that are based in Portugal.
• Investment of at least €500,000 to an accredited public or private institution involved in qualifying scientific research that will benefit the national scientific and technological infrastructure.
• Investment of at least €250,000 to an accredited institution conducting qualifying projects to, or in support of, artistic production, or the maintenance or recovery of cultural heritage.
• Investment of at least €500,000 in an investment fund or venture capital fund for the acquisition of units with a maturity of at least five years from date of purchase. To qualify, the fund must be registered in Portugal and have at least 60% of its capital invested in Portugal.
• Investment of at least €500,000 for either the incorporation of a new company headquartered in Portugal that leads to the creation of five new job positions that are sustained for three consecutive years, or a capital injection in an existing company headquartered in Portugal that leads to the maintenance of at least 10 existing job positions.

“We wanted to preserve a core of job creation and investment in Portuguese companies that was already part of the current law,” said Eurico Brilhante Dias, parliamentary leader for the ruling Socialist Party, in June. “We need to determine if this regime can continue through investments in the productive sector, attracting foreign direct investment … and if it can exist without real estate.”

Portugal Golden Visa track record

The Golden Visa programme has attracted over €7 billion in investments from non-EU nationals since its inception in 2012, but real estate investments have accounted for more than 90% of this total. The cumulative total for real estate investments up to 31 May 2023 stood at €5.7 billion, while the cumulative total for real estate investments in renovation properties added a further €637 million.

Over the same period, the capital transfer option attracted €586 million, and the investment / venture capital fund option attracted €224 million. The business investment option, creating at least five jobs, has attracted €5.6 million, while the scientific research contribution attracted just €2.1 million.

However, the fund investment option has started to gain traction in recent years. In 2019, there were seven fund investment-based Golden Visa approvals totalling €3.1 million, but this increased to 235 in 2022, totalling €86.3 million. In the first five months of this year, there have been a further 246 approvals totalling €88.3 million.

Portugal Golden Visa roadmap now clear

“Finally, the roadmap is clear on how the Golden Visa scheme will continue to operate in Portugal,” said Shelley Wren, Sovereign’s Head of Business Development in Portugal. “The investment route, while not as straightforward as the real estate route, continues to offer a wide variety of options to non-EU investors who are keen to access a Golden Visa allowing them to reside in Portugal and work towards gaining a Portuguese passport.

“These choices allow each investor to continue to choose an asset class that fits into their own narrative and personal plan, whether that is via investment funds, cultural or scientific research or pursuing active business activities.”

“Sovereign has an in-depth knowledge of all these Golden Visa options and how they can be applied to meet the objectives of individual clients. We are delighted that the uncertainty is now over, and we can recommence working with clients to ensure that they can gain access to all the benefits of Portuguese residence,” added Wren.

The ‘Mais Habitação’ package has new been submitted to Portugal’s President. The President has a 20-day period to either approve or veto the legislation, or to request a review by the Constitutional Court.